Business Model Configurations Research Articles

Business models, intangibles and firm performance: evidence on corporate entrepreneurship from Italian manufacturing SMEs

This paper examines the factors that affect firm performance in a sample of 376 small- and medium-sized Italian enterprises over the period 2000–2010. It looks in particular at changes in business models and investments in intangibles. We compared firms that continued to be managed through an existing business model with matched firms that changed their business model over the period. We found that a modification of the business model has a positive effect on the ability of the firm to perform well. There was also a positive complementary effect on performance of business model change and intangibles. These results are even more evident when business model changes were categorised by their degree of innovation, suggesting that business model innovation is core to firm performance and that intangibles are positive moderators. They play a crucial role in shaping the firm’s competences, which favour the success of an innovative business model configuration.

A Qualitative Comparative Analysis of Business Model Configurations and Performance in Formula 1

The relationship between business models and firm performance is only partially understood, especially when firms use multiple business models simultaneously (i.e., adopt configurations of business models). In this paper, we investigate the relationship between business model configurations and firm performance in a technology-based environment by conducting a multiple case study and a qualitative comparative analysis on Formula 1 (2005-2013). We find that configurations that combine two types of business models—one focused on selling technology to competitors and the other one focused on developing and trading human capital—are associated with higher firm performance. In addition, we explore the mechanisms that underlie these associations, and we find that these two business models are linked by knowledge-based complementarity such that implementing one business model increases the knowledge generated by adopting the other business model in isolation, and vice versa. We discuss the implications of the findings for theory and practice in technology-based industries such as the automotive industry.

From Ownership to Service-oriented Business Models: A Survey in Capital Goods Companies and a PSS Typology

The evolution of capital goods companies towards a “service-oriented” business model is challenging and requires fundamental changes in the company. Main aims of this study, that is a part of a large research project, are to understand how business models of companies that operate in capital goods sector are configured and to identify different PSS types that can help companies to better understand the shifting toward a service-oriented business model. To achieve these results, we developed a framework, based on the Canvas model and carried out an exploratory survey among 95 European companies to understand the relevant issues that characterize business model configuration in servitization context.

Development of a PSS-oriented Business Model for Customized Production in Healthcare

In recent years Mass Customization has been considered as a proper strategy to provide customers with individualized products with a reasonable price. Meanwhile, the trends of aging population and rapid technological evolution have initiated the interest of healthcare sector to production of customized medical devices. Pursuit of such a strategy can result in introduction of manufacturing operations of customized medical devices inside the hospitals. To this end, an innovative business model is required to facilitate and support such a shift by focusing on both product and service perspectives and hence taking into account an integrated product-service system approach. This paper aims at introducing a PSS-oriented business model to support customized production by hospitals. Moreover, a qualitative analysis of pros and cons of each business model configuration is presented in the paper. Eventually, considering each configuration along with its benefits and challenges, the hospital selects the most proper business model base on its strategy and long-term oriented objectives.

Making business models

Well-established companies are currently struggling to secure profits due to the pressure from new players' business models as they take advantage of communication technology and new business-model configurations. Because of this, the business model research field flourishes currently; however, the modelling approaches proposed still rely on linear, rational conceptions and causal reasoning. Through six business cases we argue that participatory design has a role to play, and indeed, can lead the way into another approach to business modelling, which we call business model making. The paper illustrates how the application of participatory business model design toolsets can open up discussions on alternative scenarios through improvisation, mock-up making and design game playing, before qualitative judgment on the most promising scenario is carried out.

Experimental and Structural Adaptation Mechanisms of New Ventures in Nascent Markets

A growing body of research devotes attention to new venture evolution in uncertain and ambiguous environments. However, while the entrepreneurship literature typically suggests new ventures show high degrees of adaptability to unfolding market opportunities, the organization theory literature highlights relatively high levels of inertia, even in new ventures. Building on an ethnographic study of a new venture’s development process, we address this tension between both literature streams by aiming to provide a more complete understanding of the venture evolution process. Our approach enables us to identify that this evolution involves fundamentally different processes of adaptation of both business model and resource configuration over time. We introduce the concept of a “legitimate venture archetype” as an important contingency to distinguish between experimental processes of archetype adaptation, typically advanced in the entrepreneurship literature, and structural adaptation processes, in line with orga...

Business models: A challenging agenda

Most research on business models lies in the literature on strategy and competitive advantage and focuses on their role as descriptors of actual phenomenon, often by reference to taxonomic categories. In this article, we explore how business models can be seen as a set of cognitive configurations that can be manipulable in the minds of managers (and academics). By proposing a typology of business models that emphasizes the connecting of traditional value chain descriptors with how customers are identified and satisfied, and how the firm monetizes its value, we explore how business model configurations can extend current work on cognitive categorization and open up new possibilities for organization research.

Innovation Process Model of the Meaning of a Service - A Case Study in Home Automation

Instead of a market-pull and technology-push dichotomy, applying one of the Six Senses posited by Pink (2006), the ‘Meaning’ in product innovation, this study proposes an Service Innovation Process Model based on the Design Driven innovation (DDI) process advocated by Verganti (2009), and business model configuration depicted by Battistella et al., (2012). The latter is already an extension of the former; this study further extends the model to a service design, value co-creation with stakeholders, market penetration, and market feedback as a complete cycle. The objective is to bring in radical service innovation with minimum possible risk. Repertory Grid technique had been employed to explore the affordance of the proposed new applications in the DDI process in a case study of Home Automation. It was found that the findings in the Repertory Grid were quite aligned with those in the DDI process. The case study illustrated stakeholders’ involvement throughout the process is required in order to achieve the objective. It also reveals a real life example in designing the detail workflow/process/user experience of a new service after the DDI process. Product-focused had to be complemented with service-focused innovation in order to be sustainable. Although there is no one-size-fits all Innovation process model, this study demonstrates a practical way to explore the ‘Meaning’ of a Service in a holistic practical approach.

From On-Premise Software to Cloud Services: The Impact of Cloud Computing on Enterprise Software Vendors´ Business Models

Cloud computing is an emerging paradigm that allows users to conveniently access computing resources as pay-per-use services. Whereas cloud offerings such as Amazon's Elastic Compute Cloud and Google Apps are rapidly gaining a large user base, enterprise software's migration towards the cloud is still in its infancy. For software vendors the move towardscloud solutions implies profound changes in their value-creation logic. Not only are they forced to deliver fully web-enabled solutions and to replace their license model with service fees, they also need to build the competencies to host and manage business-critical applications for their customers. This motivates our research, which investigates cloud computing's implications for enterprise software vendors' business models. From multiple case studies covering traditional and pure cloud providers, we find that moving from on-premise software to cloud services affects all business model components, that is, the customer value proposition, resource base, value configuration, and financial flows. It thus underpins cloud computing's disruptive nature in the enterprise software domain. By deriving two alternative business model configurations, SaaS and SaaS+PaaS, our research synthesizes the strategic choices for enterprise software vendors and provides guidelines for designing viable business models.

On the applicability of the configurational approach to business model theory with fs/QCA

In this paper we aim at demonstrating that business model literature would benefit from the adoption of a configurational approach both for theoretical and empirical developments. While the business model literature is asking for a more robust, comprehensive approach able to capture the multi-dimensionality of the concept, almost no empirical study has tried to prove it empirically. In this paper we apply a configurational approach to business model configuration through the use of fuzzy set qualitative comparative analysis method (fs/QCA). The configurational logic of fs/QCA explains complementarity effects in business model components and gives insights on equifinal configurations and substitution effects. Drawing upon the business model literature, we distinguished between two main types of business model (i.e. the integrated business model and the layer player business model) and tested our model on a sample of 419 manufacturing firms in order to explain the elements of a business model causally associated with high performing configurations both in terms of growth and economic performance. Our results showed consistent configurations for performance and (partially) for growth. We discussed the core and peripheral elements of diverse business models and how elements interact via complementarity or substitution effects. Overall, our study offers a new lens for further advancing the business model literature, and empirical evidence to common theoretical recommendations.

3PL factories or lernstatts? Value‐creation models for 3PL service providers

PurposeThe purpose of this paper is to identify and systematically discuss generic forms of contract logistics services and their distinct underlying approaches for fulfilling their respective value propositions. A general frame of reference is developed that addresses the value proposition, as well as the value creation architecture that leads to generic business model configurations for contract logistics services. The framework is built upon the basic notions of service theory, competence research and the resource based view.Design/methodology/approachThe paper combines service theory with work of organizational theory and develops an analytical framework based on conceptual considerations. First empirical results are additionally used to support and illustrate the key outcomes.FindingsCombining the dimensions of integration power and intangible knowledge creation, the authors are able to specify generic types of contract logistics services. Thereby the authors deducted for every type the distinct requirements for service fulfilment and present this in a specific frame of reference.Research limitations/implicationsThe illustrated empirical results are still limited due to a limited sample size for the interviews. Additional empirical work on the whole third party logistics (3PL) market is suggested.Practical implicationsThe paper provides generic types of 3PL services and a characterization of properties and architectures of respective business models. Combined with first empirical results, the paper's results offer insights for practitioners to rethink their value propositions and potentially redesign their service architectures.Originality/valueThe paper delivers a set of distinct business models for 3PL services reflecting the customer's, as well as the service provider's point of view. It addresses specific aspects of the generation/production of required services that are so far mostly neglected.

Empirical classification of resources in a business model concept

The concept of the business model has been designed for aiding exploitation of the business potential of an innovation. This exploitation inevitably involves new activities in the organisational context and generates a need to select and arrange the resources of the firm in these new activities. A business model encompasses those resources that a firm has access to and aids in a firm’s effort to create a superior ‘innovation capability’. Selecting and arranging resources to utilise innovations requires resource allocation decisions on multiple fronts as well as poses significant challenges for management of innovations. Although current business model conceptualisations elucidate resources, explicit considerations for the composition and the structures of the resource compositions have remained ambiguous. As a result, current business model conceptualisations fail in their core purpose in assisting the decision-making that must consider the resource allocation in exploiting business opportunities. This paper contributes to the existing discussion regarding the representation of resources as components in the business model concept. The categorized list of resources in business models is validated empirically, using two samples of managers in different positions in several industries. The results indicate that most of the theoretically derived resource items have their equivalents in the business language and concepts used by managers. Thus, the categorisation of the resource components enables further development of the business model concept as well as improves daily communication between managers and their subordinates. Future research could be targeted on linking these components of a business model with each other in order to gain a model to assess the performance of different business model configurations. Furthermore, different applications for the developed resource configuration may be envisioned.