Understanding Business Models

This assignment delves into the concept of business models, examining various definitions provided by researchers like Timmers, Mahadevan, Amit & Zott, Moris, Shafer, and more. It outlines different business model archetypes, discusses the business model canvas and contextual model frameworks, and analyzes value creation and appropriation within business models.

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A

Business Models - Definitions
Definition Researcher
an architecture used for product, service and information flows Timmers (1998)
a blend of three value streams in business including business partners and
buyer’s value stream, logistics steam and revenue stream
Mahadevan (2000)
Competitive advantages are created for a firm through business model
differences
Amit and Zott
(2001)
strategy, architecture and economics are decision variables for model
designing
Moris (2005)
Business model represents logical and strategic value creation Shafer (2005)
A business is a textual, graphical or conceptual representation of the core financial,
operational, and architectural arrangements of an organization.
E-business model archetypes
Business Model as activity system

Business model as cost/revenue architecture
The Open Group Architecture Framework is an architecture development model that can be used for
defining business models by integrating business inputs, business steps, and business objectives in the
architecture. Alexander Osterwalder identifies 9 building blocks that form a business model -Business
Canvas.
Content
activities
Structure
link between
activities
Governance
who would
perform
Design
elements
Novelty
new activities, new ways of
linking and new ways of
governance
Efficiency
system design to achieve greater
efficiencies and reduce
transactional costs
Complimentary
bundles of products and
services
Lock-in
third parties as model
participants
Design
themes

Business Model problems
 Audience base may not be sufficient - beta testing to gather feedbacks and identify target
market (Osterwalder & Pigneur., 2016).
 Weak revenue modelling - efficient and effective revenue model (Cliffe, 2011).
Business context Model
Figure 1: contextual business model framework(Luoma, 2014)
Value creation and appropriation
Value creation Value Appropriation
 exchange of resources
 realized utility or a monetary gain
 protecting appropriation streams like
isolation mechanisms and bargaining

 new methods, technologies or new raw
materials
 innovative input into a new output
 gives superior performance
power
 building resources that cannot be
replicated
 extraction of profits through innovation
 develop sustainable advantages
Conclusions
 7 major archetypes of business models
 Effective designing models such as business model canvas and business context model.
References
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Models open to Innovation Communities: the Case of a Crowdsourcing Platform. M@n@gement ,
318 - 340.
Cliffe, S. (2011). When Your Business Model Is in Trouble. Harvard Business Review.
D’Souza, A., Wortmann, H., Huitema, G., & Velthuijsen, H. (2015). A business model design
framework for viability; a business ecosystem approach. Journal of Business Models , 1-29.
Fielt, E. (2013). Conceptualising Business Models: Definitions, Frameworks and Classifications.
Journal of Business Models , 1 (1), 85-105.
Gregorio, D. D. (2015). Value Creation and Value Appropriation: An Integrative, Multi-Level
Framework. University of New Mexico.
Iacob, M. E., Meertens, L. O., D, H. J., Quartel, A. C., Nieuwenhuis, L. J., & Sinderen, M. J. (2012).
From enterprise architecture to business models and back. Springer-Verlag Berlin Heidelberg .
Luoma, O. (2014). A CONTEXTUAL BUSINESS MODEL FRAMEWORK. University of Tampere.
Memili, E., Fang, H. C., & Welsh., D. H. (2015). Value Creation and Value Appropriation in
Innovation Process in Publicly-Traded Family Firms. LIBRES.
Nielsen, C., & Lund, M. (2013). The Concept of Business Model Scalability. DUN.
Osterwalder, A., & Pigneur., Y. (2016). How Design Thinking Will Reshape Business Model
Innovation. Strategyzer.
Zott, C., & Amit, R. (2007). Business Model Design and the Performance of Entrepreneurial Firms.
University of Pennsylvania.
Zott, C., & Amit, R. (2010). Business Model Design: An Activity System Perspective. Long Range
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Zott, C., & Amit, R. (2009). Designnig your Future Business Model: An activity System Perspective.
University of Navarra.