Business Model Evolution and Magento
Added on 2020-02-24
7 Pages1810 Words140 Views
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Running head: ESSAYInnovation and Sustainable Business DevelopmentName of the StudentName of the UniversityAuthor’s Note
1ESSAYThe concept of business model is recently gaining attraction, but the concept is still in afuzzy zone. It is often confused with business plan or even business structure. Various scholarshave identified and defined business model in various aspects. It has started in the recent decade,only from 1990s and gained its importance in the early 2000. Various important works has comeup from then to the present time which will be discussed with special preference giving to Zott,Amit and Massa (Fielt, 2013). A brief explanation of business archetypes, activity system andrevenue architecture will be highlighted with proper example from the real world. The idea ofbusiness context and changes in business model is provided in the final part of the essay drawingexample from an Australian ecommerce company named Magento. Changes that occurred intothe company due to the change in value chain is discussed and analyzed briefly in the discussion.Demil and Lecocq (2010) in their definition described the concept as an articulationbetween various business models that is suppose to propose how to generate value for both theorganization and the customers. Zott and Amit (2010) on the other hand, conceptualized it astemplate that can provide the idea to conduct the business, to deliver value to the stakeholdersand link the products market with the factors. They added that the activity system is build toassess all these vital issues. Teece (2010) describes it as the mechanism to create and delivervalue to customers and convert the received payments into profit, where revenue architecturecomes into action.Different industry uses different business model that can be explained and summed up inseven high level abstractions. They are all together referred as business archetypes. The businessarchetypes are mainly divided into two subsections that are primary and secondary. Primarycategory is comprised of Trade, Product and Service, whereas, secondary section consistsSubscription, Brokerage, Marketplace and Ecosystem. Selling of tangible goods that are sold on
2ESSAYone time basis in the market is categorized under the first primary archetype that is Product. Theprototypes under this category for e businesses are software and content. The second primaryarchetype is the trade which connects the buyers and sellers. The job descriptions of the trademodel are sourcing the product in the field by packaging and make it available in the market. Aportion of the profit is earned by the company using this model for their business. EBay is aperfect example for is category. The industries under this category are e-commerce and leadgeneration. The purpose of the service archetypes is to deliver intangible solutions for the clientsand the customers. Different service platform and service agencies are marked under thisarchetype (Zott, Amit & Massa, 2011).Secondary archetypes are the combinations of various primary archetypes in particularorder. Subscription is an important secondary archetype which is a combination of product andservice. Instead of selling a particular product for one time cash, this model offers the customersto use in for a minimal charge via their portal for a particular period of time. Common examplesof this archetype are the industries provide software as service and content as service. Thebrokerage archetype is a combination of service and trade. Here the organization sells theproduct for their client as service. The organizations using this model are the ad agencies. Thevalue proposition for this archetype is the efficient commodity procurement. Marketplacearchetype model in the other hand is used by the companies provide a platform for the buyersand seller for trading, but it performs its task via self-service that is a product itself. The productsunder this category can be the online technology platform which takes care of the paymentprocess and statistical reporting. The platform on which this archetype model creates their valueis the destination shopping. Final secondary archetype and the most complicated of all is theecosystem model. Business using this model has to deal with all the three primary archetypes.
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