Abstract
This chapter describes the concept of a business model from the network perspective and examines the different types of business models. The author mentions the characteristics of a successful business model with the threats to a business model's success. A lean start-up process is explained, with an emphasis on the business model canvas technique. An organization's business model does not necessarily have to continue in perpetuity once it is launched. Accordingly, the business model change, characteristics of a transformative business model, and directions for future research are addressed. In this context, the chapter discusses the past, present, and future of e-business models.
TopThe Concept Of A Business Model
All businesses, either explicitly or implicitly employ a particular business model. (Teece, 2010, p. 191). Desperately seeking definition: Identity crisis of the business model. (Shafer, Smith, & Linder, 2005, p. 200)
The foundations of network approach to business models and the conceptualization perspectives to the business model are discussed in this part.
Key Terms in this Chapter
Platform: A comprehensive type of business model (e.g., marketplaces, freemiums, and multisided platforms) that integrates owner, provider, producer, and consumer.
Ecosystem: Interrelated parts, dimensions, and organizations acting as a unit.
Pipeline Business Model: The traditional value chain structure consists of suppliers, producers, intermediaries, and customers, and is characterized by a hierarchy and unequal distribution of power among the participants.
Lean Start-Up: To develop an agile business model focusing on the quick response of the consumers and associated partners without the necessity of a long-term business plan.
Business model: An interdependent system and network of operations and decisions for the purpose of creating and capturing value, which may require change or transformation over time.
Portal: A business model which is a point of entry into a content, communication, and/or commerce channel.
Business Model Change: To make an incremental difference in a business model.
Business Model Canvas: One page summary of a business model which is a part of the lean start-up. It includes the headings of value propositions, key partners, key activities, key resources, customer relationships, customer segments, channels, cost structure, and revenue streams.
Multisided Platforms: Connect two or more independent but mutually dependent client segments. To generate value, the platform must appeal to and serve all groups concurrently.
Transformative Business Model: A crucial and lasting change in a business model.
Value: A concept that can be defined and expressed in a variety of ways. Value can be established through cost-benefit analysis, or it can be obtained primarily from product quality, low price, assortment, convenience, customer service, and ethical judgments. Value can be created in the factory, by the consumer, or through the company's collaboration with the client (co-creation).