Business model portfolio expansion through structural separation – Adding a new digital business model

The aim of the article is to define the information technology impact nature on the transformation of enterprises the digital business model; to determine features of developing enterprise digital business model; to substantiate the importance of studying the dependence of digital key elements and digital focus areas, which is the basis for identification the digital-value-drivers matrix concept. The results of the analysis. It is determined that the emergence of the digital economy has unlocked new opportunities, leading to the creation of innovations in data driven industries. New digital business models have disrupted the existing business models of established industries. While the digital economy initially stemmed from the technology sector, digital business models have begun to permeate large and small companies in a variety of sectors. The features of the development of the digital business model including the identification of the main digital elements (people, businesses, things, data, and cloud) are studied. It is explained how the effects of the paradigm shift go through the entire digital business model. The digital focus areas are described. In addition, it is graphically demonstrated the digital focus areas, which associated with components of the digital business model canvas. It is justified that in the context of digital business model design, it is important to understand how digital capabilities have specific value-generating effects that come along with digital key elements in a business context. The digital-value-drivers matrix concept, which contributes to the effective operation of the enterprise in the digital environment, is presented and visualized. In this way, value drivers associate with certain components of the digital business model canvas and, as a result, in the article it is presented a matrix that has components of the digital business model canvas as one dimension and the digital key elements as the other dimension while digital value drivers appear in the matrix elements. It is determined that the digital business model should be transient to ensure the sustainable development of the enterprise in the market. It is explained that the transition of the digital business model will not happen overnight. If the old and the new are designed to coexist, they will need to carefully manage potential conflicts and resource allocation between the two. Conclusions and direction for further research. It is determined that the digital business model needs to become a core capability for companies, with knowledge and the best practice. The five practical steps that companies can follow to rethink their digital business model are investigated. It is justified that companies need to use a continuous evaluation approach in order to devise a successful digital business model design Key words: information technology, digital business model, digital technologies, digital key elements, digital focus areas. DOI: 10.15276/mdt.1.1.2017.4 Celaya, J., Vаzquez, J., Rojas, М. (2014). How the new business models in the digital age have evolved, Kindle Edition, 96 р. Digital Business Models [Electronic resource]. – Retrieved from https://www.digital-mr.com/blog/view/digital-business-models. Understanding Digital Business Models Event – 25 & 26 Feb 2016 [Electronic resource]. – Retrieved from https://robllewellyn.com/digital-business-models. Nguyen, G. (2014). Exploring collaborative consumption business models – case peer-to-peer digital platforms, Aalto University, 90 p. McQuivey, J. (2013). 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It is argued in most academic literature that Business Model (BM) is a general model for how any business runs or should be run, it is the "blueprint of the business". Conversely we argue that no business has just one BM, one model on which it runs all its business or intends to run its business. In other words the BM can be used for "as-is" and the "to-be" businesses. However our research, in contrast to the other BM frameworks, indicates that businesses have more BMs - both "as-is" and "to-be" BMs - the multi business model approach. This was already theoretically indicated by Markides and Charitou in 2004, and again in the Casadesus-Masanell and Ricart model of 2010, but sadly no one in the BM community has followed up on this since then. It could have made a breakthrough in our understanding of BMs, Business Model Innovation (BMI) and Strategic BMI. The Multi Business Model Innovation Approach addresses the concerns in the BM community and in BMI practice to just focus on the ideation and conceptualization of BMs. "BM canvassing", innovating BM building blocks or BM dimensions when carrying out BMI, so-called "blind business model innovation", is not sufficient to run and understand a business today. BMs and BMI must address all the different levels in a business. All BMs are objects to BMI and should be used to maximize the performance and sustainability of the business. The core business and all levels BMs, such as BM dimension components, BM dimensions, BM portfolio, and Business Model Ecosystem (BMES), should all be considered for BMI. The book addresses and documents a gap in BM research and the BM community - but also proposes a generic definition and language of a BM and BMI layers. The significance and importance of this work is related to significant and unexplored possibilities that BMI offers today, and can offer tomorrow. When we thoroughly understand all levels, dimensions and components of the business and its business models, and we are able to communicate, work and innovate with business models at all levels together, then a next step in BM and BMI research and practice can be taken. It is proposed that any BMs are related to seven dimensions- value proposition, user and/or customer, value chain functions (internal), competence, network, relations and value formulae. It is further proposed that seven different levels of a BMI from the most detailed level - the BM dimension component - to the BM dimension, BM, BM portfolio, business, and the vertical and horizontal business model ecosystem layer - and these can be objects to BMI. Conceptually, the Business Model Cube was formed using the seven dimensions which could be used both in a 2D and a 3D version.

Conceptualizing digital business models (DBM): Framing the interplay between digitalization and business models

В статті досліджено трансформацію бізнес-моделей компаній в контексті сучасних викликів та перспектив у цифровій економіці, коли впровадження та використання цифрових технологій стає необхідною умовою їх функціонування. Аналізується вплив цифрової трансформації на бізнес-процеси, описується зміна підходів у створенні, розвитку та оцінці бізнес-моделей у цифровому середовищі. Висвітлено підходи вітчизняних та зарубіжних дослідників до цієї тематики, включаючи таких науковців як О. Остервальдер, І. Піньєр, Х. Туччі, М. Портер, Г. Хамел та ін. Проаналізовано вплив цифрових технологій на розмір ринкової капіталізації компаній. Наведено приклади цифрових (платформних) бізнес-моделей, які успішно впроваджуються та дозволяють компаніям досягати конкурентних переваг. Проведено порівняльний аналіз традиційних бізнес-моделей і нових цифрових підходів, зокрема платформних моделей та визначено, що основна мета платформної бізнес-моделі - об'єднати різні учасників на одній платформі, де вони можуть здійснювати обмін товарів, послуг, інформації, або співпрацювати один з одним. Зроблено висновок щодо важливості активної трансформації бізнес-моделей суб'єктів економічних відносин у контексті цифрової економіки для забезпечення стійкого розвитку та успішного функціонування в сучасному бізнес-середовищі.

Digital nudges as conversion enhancers in profit-oriented and non-profit oriented digital business models

This chapter explores how digital business models come into being and how they develop over time. A focus on how digital business models form is important for theory and practice because managers and entrepreneurs cannot stop at identifying a particular digital business model design but must inevitably deliver digital strategy by creating and constantly developing digital business models. The chapter opens with a review of the two principal ways to design digital business models identified in prior literature: business model innovation and imitation. Both business model innovation and imitation are viable ways to form business models in the digital economy, and they are not mutually exclusive. Rather, they may be conceived as two ends of a continuum along which real-world strategies to design digital business models lie. This chapter integrates emerging and established research to develop this notion and explores strategies along the spectrum. These include pioneer, architect, blender, adapter, and copycat. The chapter also discusses some basic principles and underlying mechanisms behind these strategies. Finally, an agenda for future research on strategies to design digital business models is proposed.

Due to increasing digitalization, most companies have added online retail as a new business model (BM) separate from their initial physical BM, requiring them to manage a portfolio of BMs. The literature points out that companies choose between a separation or integration strategy to manage their multiple BMs. However, business cases show that companies adopting a separation strategy may then plan for a possible integration strategy. Despite the growing knowledge in the BM portfolio literature, scholars and practitioners still lack a comprehensive understanding of the integration process of two BMs that were initially managed separately. This qualitative research draws on a cumulative multiple case study of five retailers to analyze how incumbent firms with different BMs manage their integration. We show that these firms pivoted the management of their BM portfolio. The notion of pivoting has been studied from the perspective of a single BM. In this research, we demonstrate that the process of pivoting also applies to the management of several BMs. Our results provide a generic model of the BM integration process that underlines barriers and enabling pivoting factors. Finally, by considering pivoting at this corporate level, our research adds to the ongoing discussion in strategic management regarding the way companies manage the dynamics of their BM portfolio.

The business model portfolio as a strategic tool for value creation and business performance

The advent of 5G networks represents a transformative leap in cellular technology, promising to revolutionize digital communications and business operations. This study investigates the role of 5G in enabling new digital business models across various sectors of the economy. A mixed-methods approach was employed, combining quantitative analysis of data from 500 companies across 10 industries over a 5-year period (2019-2023) with qualitative case studies. Econometric techniques, including fixed-effects panel data models, difference-in-differences analysis, and instrumental variable approaches, were utilized to examine the relationships between 5G adoption, business model innovation, and firm performance. The study found a strong positive correlation between 5G adoption rates and the introduction of new digital business models. A 10 percentage point increase in 5G adoption was associated with an average increase of 0.7 new digital business models. High-tech sectors experienced significantly larger increases in new digital business models post-5G introduction compared to traditional sectors. The analysis also revealed a positive relationship between 5G investment and revenue growth, though this varied across industries. The findings highlight the transformative potential of 5G technology in driving business model innovation and economic growth. The study provides empirical evidence for the catalytic role of 5G in enabling new digital business models, particularly in high-tech sectors. These insights have important implications for business strategy, policy-making, and future research on technological innovation and digital transformation.

Dynamic aspects of intended company change can be related to the development and management of a portfolio of business models with regard to competence deployment and to performance. A portfolio of business models is seen as a reflection of the realized strategy of a company, and the dynamics aspects of company change are connected to internal and external critical strategic incidents. The business model elements considered in this research are market position, offering, and operational platform enabling a differentiation between strategic and operational effectiveness. The evolution of a Swedish supplier of building components and systems during a 15-year period is examined. The process data consists of temporal phases where a shift of phase is defined as a change of a specific portfolio of business models. The concept of a portfolio of business models helped to discover new and conflicting standardized or customized business models that were not always intended by the company. The findings indicate that unawareness of intended actions led to unintended allocation of resources or integration mechanisms that negatively affected company performance. On the other hand gains can be achieved if a strategy is deliberately managed as a portfolio of business models which then also can be a tool for managing change in a company.

The feasibility of digital transformation of business models is proven in the article. It is determined that the process of digital transformation covers all spheres of life: from interaction between people to industrial production, everyone is a consumer of digital technologies - the state, business, citizens. The development of Ukraine’s digital economy involves the creation of market incentives, motivations, formation of demand and needs for the digital technologies use. Digital transformation of business models is considered as optimization of resources using digital technologies. The most popular digital business models, as well as the essence and main advantages of using the digital platform are discussed in the article. Digital platform is the basis of the sharing economy, which is designed mainly for small and medium-sized business and is defined as a combination of horizontal business links and IT platform, where users exchange assets without the participation of major players or corporations. In Ukraine, the sharing economy is represented in several sectors among which transportation, financial sector and the medicine are the main ones. Sharing platforms are essentially the basis for such business models as Access-Over-ownership and On-demand. Access-Over-ownership one is focused on sharing physical things (housing, cars, machinery, equipment). The On-demand model is focused on the consumption of digital content. The e-commerce model, which is one-sided, is highlighted separately. The main types of business models in electronic business are considered, such as: affiliate marketing (clear distribution of responsibilities between the parties for the creation of the product and its advertising); Affinity club (cooperation with associated members and interest groups); Blockchain-based business models (business models based on blockchain technologies); Brokerage (mediation in the implementation of sales operations) etc. The distinctive features of business ecosystems and the main ways of monetizing digital business models are discussed. It is determined that modern digital business models are rarely found in pure form, to improve efficiency and competitiveness companies mostly use combined and modified models. Factors contributing to optimization and transformation of existing and developing new business models ubder digital transformation are identified as well as fundamental differences between traditional business models and digital platforms.

Over the last years, the German energy transition has led to diversification and decentralization of the electricity market. Today, digitalization forms a key driver for innovation. Several established electricity suppliers and emerging start-ups have responded by offering novel business models (BMs) in “Digital Energy Communities” creating an intertwining network of actors. This analysis discusses the emergence of novel BMs and the end-users’ role in this market segment with regard to participation opportunities and provides a definition of digital energy community BMs. Out of the 106 relevant BMs in the German context, the authors selected 26 BMs with regard to actuality and representativeness. They were mapped against criteria that influence citizen engagement. Our findings suggest that 14 BMs represent emerging companies, while 12 BMs are products of established market players. Many of the novel BMs focus on providing online marketplaces. Surprisingly, only one of them allows citizens to participate in the BM financially. The findings suggest that while the digital energy community BMs provide opportunities for citizen participation in the energy transition, roles and responsibilities must be more clearly defined. Digital energy community BMs can only minorly contribute to citizen participation as citizen engagement is not fundamentally inherent in their value proposition.

We study the impact on performance when incumbents operate multiple business models in a business model portfolio. Drawing upon data from the global airline industry we conduct QCA analysis and document conflicts as well as complementarities between distinct business models over time. Our results suggest that aligning monetization mechanisms across business models can actually mitigate classic stuck-in-the-middle dilemmas that occur when a firm operates a price leader and differentiated business model at the same time. In contrast to conventional views we also find that sharing resources across a firm’s business models does not unlock synergies per se but may actually lead to negative performance consequences. We match our findings to settings in other industries and discuss theoretical and managerial implications for business model innovation and diversification of business model portfolios

Incumbent firms typically operate a portfolio of business models. However, we still know little about how business model portfolios emerge and develop over time. We build on longitudinal data from a multiple-case study to explore how the evolution and dynamics of business model portfolios impact firm growth. Our findings suggest that business model portfolios emerge and develop in three phases: initiation and scale-up, diversification and transformation. A firm’s first viable business model strongly impacts the evolution of its business model portfolio and growth. New business models in the portfolio contribute to firm growth when they are synergistically interrelated with this core business model and specifically generate demand-side synergies. In a transforming portfolio, a new business model replaces the old core business model of a firm.

Purpose Business models are a key to success. This paper aims to identify the characteristics of the Now Economy, discuss the components of an effective business model, examine numerous e-commerce business models and provide an application of online learning. Design/methodology/approach The literature on business models is reviewed. E-commerce models are explored as a means for building competitive advantage in the Now Economy. An in-depth case study of remote learning in universities illustrates the development of a sound digital business model. Findings Business models explain where and how an organization competes and the financial feasibility of its strategy. Digital business models create market differentiation or disruption. This paper explains 20 e-commerce business models and offers an in-depth view of the opportunities and challenges in the online learning sector. Research limitations/implications Building on the literature, this work is conceptual and presents a case study. It is not an empirical study. A three-point agenda for scholars includes research on speed and service in business models, assessing the impact of customer value and examining the market power of Big Tech. Practical implications The digital component of the economy is growing annually. Business practitioners must respond by developing winning business models. The remote learning application is particularly relevant given today’s changing educational market. Originality/value While there has been considerable research on business models, there has been limited work on digital business models, which is the focus of this article.