Business Model and Value Chain Integration
Added on 2020-03-13
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Running head: BUSINESS MODELBusiness Model Name of the StudentName of the University Author note
1BUSINESS MODELIntroductionWith the growing developments in the contemporary economy, the conventionalbalance between the supplier and customers has changed to a great extent. With the newcomputing technology, the customers now have more options. Therefore the businesses haveturned into more client-centric, especially in terms of providing solutions to the customersand providing products at lower cost (Bocken et al., 2014). Within this changed environment,the companies require to address the needs of the customers more specifically while theycapture the value by providing service and products. Therefore, without a well designedbusiness model, it is nearly impossible for the businesses to capture the value frominnovations, especially for the IT companies that create the revenue streams from theconceptualizations of the business model (Frankenberger et al., 2013). This essay addressesthe concept of the business models and the related notions in respect to the renowned ITCompany, IBM, which has a huge impact of the rise of big data in its business model. Concept of Business Model The business model is the method which has been applied by the company in order togenerate more revenue and make more profit from the operations of the company. Thebusiness model defines the rationale of how the organization acts and captures the requiredvalue (Carayannis, Sindakis & Walter, 2015). The business model is also a part of thebusiness strategy within the social, economic and cultural context. Within both the theoreticaland practical field, the business model is utilized for different informal and formaldescriptions for representing the basic aspects for the entire business including the businessprocess, purpose of the business, target client base, infrastructure, customers, organizationalstructures, organizational structures and the other operational processes. The business modelcan also be defined as the abstract representation of the whole business. It can be textual,
2BUSINESS MODELconceptual, graphical, even it can be architectural. According to Saebi and Foss. (2015), thevalue architecture, value proposition, value network and the value finance which articulatedthe main dimensions or the constructs of the business are called the business model. In thecontemporary business practice, the business practice mostly depends on the technologicalpractices of the organization. E-business Archetype The primary purpose of the business model is to define all thefunctions of the business in a concise way. Within this model, the E-business archetypesmodel was developed by Carl Jung. This concept is related to the basic personalities of thebusiness and it produces a structural base which is related with the identification of thespectrum of the potential templates. Within this model, there are two kinds of activities,primary and secondary. Within the primary activities, there are three kinds of fundamentalactivities or interests; product, service and trade, while on the other hand, within thesecondary archetypes, there are four kinds of interests, brokerage, market place, subscriptionand the ecosystem (Lambert & Davidson, 2013). Within the primary archetypes, the productdenotes the one time purchasing of any artifact; the service signifies the manual service whilecharging a basic charge for that and the trade indicates the connection of the sellers and thebuyers for commercial purpose. Within the secondary archetypes, the brokerage denotesproviding the trade as the service, the subscription signifies the semi automation andproductizing the service, the market place indicates the self service place where the trade canbe productized and the ecosystem is the place where the businesses are build (Carayannis,Sindakis & Walter, 2015).
3BUSINESS MODELFigure 1: Business model archetypesSource: Bocken et al., 2014Business Model as an activity system The business model exploits the business opportunities by thecreation of the value for all the involved stakeholders. Therefore the organization requiresfulfilling all the requirements of the customers by creating the customer surplus andgenerating the profit for all the stakeholders. An activity within the business model of anyfirm can be generally viewed as an engagement of the physical, human and the capitalresources of any of the stakeholders within the business model (Kindström & Kowalkowski,2014). As the activity system, the business model serves the particular purpose of fulfillingthe all the aim and objectives of the organization. Therefore, it can also be said that thebusiness model as the activity system is a set of internally dependent organizational activitiesthat is centered on a specific organization. This activity system includes the particular
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