This chapter explores the concept and components of business models and particularly, the technological innovation of predominant business models in the fashion industry associated with the phenomenon of convergence. The main inquiry revolves around how business models in the fashion industry are handling the ongoing challenges and changes of new technologies. This multiple-case study validates that technological convergence is the key to accomplishing business model innovation in the fashion industry. Limitations and further research are considered relevant because of the dynamic and complex extension of this topic and the current lack of published material.
TopBusiness Models
The advent of the Internet and new technologies appears to drive companies to further acknowledge the importance of their values to stakeholders and to develop sharper business models (Demil, Lecocq, Ricart & Zott, 2015). There are multiple views and discussions about how the elements and specific structure of a business model are defined (Morris et al., 2005; Hacklin, Battistini & Von Krogh, 2013; Hacklin & Wallnöfer, 2012; Bertels, Koen & Elsum, 2015; Gustafsson & Schwartz, 2013; Osterwalder, Pigneur& Tucci, 2005). Business models are discussed in the context of many different disciplines (Gustafsson & Schwarz, 2013; Teece, 2010), generating distinct interpretations in the existing literature and management applications. So, what is a business model? One plain answer defines it primarily as “the firm’s economic model” (Morris et al., 2005, p. 726). Yet, the concept of business model involves many more components, such as “revenue sources, pricing methodologies, cost structures, margins, and expected volumes” (Morris et al., 2005, p. 727). Business models appear to directly answer the following questions: “Who is the customer? What does the customer value? How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost?” (Magretta, 2002, p. 4).