Performance analysis and design of competitive business models

Abstract

In this paper, we define the business model of a company and its eight main components which are the customer value proposition, profit formula, partner network, the other four business model pillars include supply/service chain processes; key resources; delivery mechanisms and institutional and social constraints and finally the operational governance. The business model achieves the objective of making money by producing the products/services using the resources following the social and institutional constraints and delivering to various customer segments the products and services using all the sales opportunities including to the primary, secondary customers and cross-sales. We call this framework as the business model ecosystem. Then, we map the unified ecosystem for a unified company and illustrate using several examples. Our business model ecosystem is a generalised version of the business models published in the literature. We then present the GRIP (Governance, Risk, Innovation and Performance) framework. We present some of the example both established and new to illustrate our framework. We compare the traditional retail and e-retail in terms of their business models and discuss the issues involved in business model change. The takeaways from this paper are opportunities for both research and start-ups.