Business Model Innovation and its Impact
Added on 2020-03-01
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Running head: BUSINESS MODELSBusiness Models Name of the StudentName of the UniversityAuthor’s note
1BUSINESS MODELSThe concept of Business modelsA business model is a frequently used jargon that means the process by which a companyruns the day to day operations of so that they can maximize the profit or sales. Pricing and costare the two variables of a business model. It is the visual or an analytical explanation about theday to day working of a business organization. There are several steps that are undertaken by anorganization to create a business model (DaSilva & Trkman, 2014).Customer segmentation: creating a profile about the customers who are going to end uppaying for the product or the service that the organization offers is very crucial. It is the first stepto creating a model (Casadesus‐Masanell & Zhu, 2013). It also depends upon setting objectives or short term goals that will help the organizationmove towards the larger aim (Martins, Rindova & Greenbaum, 2015). Assessing the business environments is another important step in building the businessmodel. All internal and external environmental factors have to be considered as it directly orindirectly affects the daily operations of the organization (Markides, 2013). Value proposition of the organization is the way to get a return on the products orservices that are being sold. Strategizing the revenue of the product or service which essentiallymeans pricing strategies is an integral part of building the business model (Zott & Amit, 2013). Another significant part of a business organization model is to focus on the resourcesavailable and ways and means to use it optimally for the betterment and the benefit of theorganization (Bocken et al., 2014).
2BUSINESS MODELSAccording to Zott, Amit and Massa (2011), there are at least three concepts that mightwarrant distinct consideration: (1) e-business model archetypes, (2) business model as activitysystem, and (3) business model as cost/revenue architecture. E-business model archetypesWhen business is being done electronically it is called as e- business. It comprises of e-commerce, e-markets, and Internet-based business organizations and refers to organizations thathave the uses internet to have commercial transactions with their customers and other businessassociates.E-business does not refer to those organizations that just have the description of theirproducts or services on the internet for the knowledge of the potential customers. As we can see that internet plays a vital role in this kind of business and this type oforganization has evolved and increased in the recent past with the advancement of moderninformation and communication technology along with the decreased cost of internet usage allover the world. There have been monumental changes in the operations of many businessorganizations due to the above stated reasons (Barnes & Hunt, 2013). The e-business model is just like any other business model but the point of difference is thatthese businesses are electronically based and has a significant presence online. Any businessmodels are based on the participants, the resources and the flow of value. For an e-businessmodel the steps that are kept in mind while creating a business model are:Value proposition: It is the fulfillment of the requirement of the customers through the product orservice that the company has to offer. Because the buying and selling of the product or service is
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