Business Model Concepts and Research
Added on 2020-03-04
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Concept of a business modelA business model is referred to the clear and concise way of showing how exactly thebusiness is operated. In an organization, the management team is expected to explain thebusiness model in few sentences (Fey & Trimble, 1993). All the companies in present timetry to strive to offer the value to customers. The stronger the value proposition, especiallywhen it is compared with the competitors, the most likely many customers will buy throughthe company. The business model is considered as the way of translating the concept of thevalue proposition in the potential for having profitability and rapid revenue growth (Fey &Trimble, 1993). The business model explains the various methods, which can be used by companies ingenerating revenue. It can include charging the fees for subscription, selling the products orservices, selling the service contract over the item for creating the revenue opportunities. Themodel also depicts the factors related to the business operation that leads to profitability. Theorganization might hold high margin, as compared to competitors, due to the low-costsources associated with supply (Fey & Trimble, 1993). A business that attains advantagethrough word of mouth suggestions through present customers towards prospective customerscan become profitable, as this type of marketing is less costly than others like advertising. Explain what is involved when referring to the notion of an e-business archetype,business model as an activity system AND a business model as a cost-revenuearchitecture. The business model is the integral part of economic and trading behaviour in this pre-classical period. In the mid-1990’s the concept of business model has become more prevalentthrough the coming of the internet, as it has helped in collecting momentum, since that time.From that period, ideas around this concept are resonated with business practitioners and1
scholars, as mentioned by various publications, which also include book chapters, articles inthe scientific journals and business press (Fey & Trimble, 1993). The research stream that isdevoted towards the business model focuses on e-business. It implies doing the businesselectronically. It includes e-markets, e-commerce, as well as internet based business, andinvolves the companies that undertake commercial transactions with the buyers and businesspartners on the internet (Forrester, 1994). Only companies that rarely make use of websitesfor displaying the product/service information are excluded. Current advancement in the information and communication technologies, like theswift and emergence of internet and this lead to rapid reduction in the communication andcomputing cost, which has permitted towards the development of different ways of creatingand delivering the value, that has also offered scope for creating the unconventionalmechanism of exchange and transaction architectures (Keating, 1998). The same hasaccentuated the expectation for designing new boundaries of organizational forms. Indeed, all these developments have opened the doors for business model designthrough enabling the companies to bring change in primary ways for organizing and engagingin the economic exchange in inside and across the boundaries of the industry. As per Keating(1998), it includes the ways, through which companies quickly communicate with bothcustomers and suppliers. The companies conceptualize the business model like the system of interdependentactivities, which transcend the focal companies and span around the boundaries (Vennix,1992). The system of activity try to enable the company to create value in relation withpartners, but also relevant to value creation share (Keating, 1998). As per empirical research,it is recommended that there are two sets related with parameters, on which activity systemdesigners expect to consider, structure and governance, design components, that explain the2
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