Choice Of Business Model Research Articles

Determinants of Business Model Choices for New Entrant in the Pharmaceutical E-commerce Environment

The COVID-19 pandemic has significantly impacted the pharmaceutical retail market, leading to rapid growth in the pharmaceutical e-commerce industry. Currently, the new entrant has three options for business models: offline pharmacy model, normal e-pharmacy model, and Direct-To-Patient (DTP) pharmacy model. To address this issue, this study constructs a dual-channel model that considers the enhancement coefficient of medication experience and incorporates a hospital that dominate the pharmaceutical retail market using the Hotelling model for each of the three models. The study utilizes dual-channel competition theory to compare and analyze optimal pricing and maximum profit of supply chain members under the different models, providing a decision-making mechanism for the new entrant. By comparing profits, the study finds that the DTP pharmacy model outperforms the traditional pharmacy and normal e-commerce models, providing the highest profit and the best medication experience for patients.

Business Model Choice for Heavy Equipment Manufacturers

Business Model Choice for Heavy Equipment Manufacturers

Impact of initial business model on the growth trajectory of new technology-based firms: a path dependency perspective

AbstractOur study explores links between the initial business model design and the post-founding development of new technology-based firms (NTBFs) through a selection of recently established NTBFs across Sweden, Finland, and France (481 firms). The trajectory of these firms’ performance has been observed and analyzed over the span of five years. The study examines the long-term effects of NTBFs’ initial business model design on their development and the path dependency of these designs on future firm performance. Our results indicate that high-growth and stable NTBFs have distinct initial designs, implying that new firms’ founders and their business design decisions have important consequences for subsequent NTBF development. Specifically, our study examines how business model characteristics impact the growth trajectory of NTBFs by empirically differentiating between the foundational characteristics of high-growth and stable NTBFs. We find that maintaining stable activity is linked to a low level of uniqueness, less demanding business objectives, and a lack of risk while high-growth is related to a larger early access to resources. We propose an explanation using path dependency literature, arguing how early business model choices predetermine long-term growth paths. Our research also provides valuable insights for stakeholders in designing targeted strategies for sustainable development.

Doing good while making profits: A typology of business models for social ventures

AbstractResearch SummaryBuilding on business model research and the social entrepreneurship literature, we conceptually develop a set of business model choices for social ventures. These choices specify the scope of venture beneficiaries, the extent that customers and beneficiaries overlap, and how social meaning is attached to the venture's value proposition. Concurrent configurations of these choices give rise to four types of social business models: (1) Social Stimulators, (2) Social Providers, (3) Social Producers, and (4) Social Intermediaries. We illustrate this typology using data from seven social ventures and formulate propositions about the implications these business model choices have for a venture's value creation and value capture potential. We then discuss contributions to the literature on social ventures and social entrepreneurship, and the literature on business models.Managerial SummaryIn this article, we propose a framework outlining key business model choices for social ventures. These choices include the scope of target beneficiaries of the venture, the degree of overlap between customers and beneficiaries, and how the venture communicates its social mission through its value proposition. By combining these choices in different ways, we identify four distinct types of social business models which we call Social Stimulators, Social Providers, Social Producers, and Social Intermediaries. To bring this framework to life, we have examined data from seven real‐world social ventures, offering concrete examples to illustrate each type. For each of these four types of social business models, we have also formulated propositions about how the business model choices impact a venture's value creation and value capture potential.

Do the Prevalent Entrepreneurial Ecosystem Factors Drive the Choice of Business Models? A Mixed-methods Study Involving Social Entrepreneurs in India

While social entrepreneurship scholars in the past have focused much on the building blocks of robust social entrepreneurship business models and sustainability factors including supportive ecosystem elements, it is not clear ‘what’ categories of the interactive ecosystem in which social entrepreneurs are located influence the choice of business models even before they operationalize their social ventures. Accordingly, this study espouses a mixed-method research design to address this issue. The authors collected data from 24 and 112 social entrepreneurs in two study phases, respectively. Four support factors—business, market, financial and policy were considered important by social entrepreneurs in India that they believe influenced their choice of business models. While policy and financial support factors were considered most important by social entrepreneurs with a pure social mission/impact orientation, market and business support were considered significant influential factors by social entrepreneurs with a profit orientation. Social entrepreneurs who sought a balance between social and economic missions, however, considered the presence of financial and market support to be crucial for choosing a relevant business model. To the best of our knowledge, this is the first study that investigates the inherent priori influence of prevalent ecosystem factors on social business model selection. It uniquely brings out an empirical association between ecosystem factors and business model preferences, affirming that factors pivotal to choice also underpin sustainability. Moreover, this study also unveils an interactive framework encompassing entrepreneur traits and their orientations, ecosystem factors, feedback and performance. Offering multiple actionable implications, this study offers key insights for policy decision-makers and practitioners.

Impacts of Online Reviews on Brick-and-Mortar Stores’ Omnichannel Retail Strategy

Adding an online channel by cooperating with an online intermediary not only allows a brick-and-mortar (B&M) retailer to reach a larger potential market, but it also allows the B&M retailer to collect online consumer reviews (OCRs) from the online intermediary. OCRs can provide additional information for consumers to mitigate their uncertainty about product valuation. In this article, we develop a game-theoretic model to investigate how OCRs affect the B&M retailer's channel strategy and business model choice. Consumers may be self-evaluating or reviews-referenced, depending on whether they use OCRs to update their product valuation. We show that negative OCRs will deter the B&M retailer from adding an online channel by cooperating with the intermediary. Counterintuitively, the B&M retailer can still benefit from cooperating with the intermediary if the information disclosed by OCRs is only slightly negative. We also show that the B&M retailer's optimal strategy varies with the commission rate, the increase in market size achieved by cooperating with the intermediary, the proportion of reviews-referenced (self-evaluating) consumers, and the information disclosed by OCRs. Interestingly, when the commission rate is not too high and the increase in market size achieved by cooperating with the intermediary is moderate, more review-referenced customers and more positive information disclosed by OCRs will shift the B&M retailer's optimal business model from the agency model to the reselling model, then back to the agency model. This article reveals the importance of OCRs, and provides physical stores with valuable knowledge of their online expansion strategies and business model choices under various sets of market conditions.

InsurTech in the United States and Germany—What are the drivers behind the different business models?

AbstractComparing the InsurTech ecosystems of the United States and Germany (Europe), there are significant regional differences in the choice of business models. While many InsurTechs in the United States have opted for the business model of a fully licensed insurer, this business model is much less common in Europe. In Europe, many InsurTechs seem to shy away from applying for a license as an insurer and limit themselves to the business model of a broker or a managing general agent. This paper analyzes the factors that influence an InsurTech's choice of business model when deciding whether or not to apply for an insurance license. It examines the impact of different local market environments on these decisions, as well as the role that access to venture capital plays in business model decisions and how regulators and their actions influence the decision‐making process.

Alternative Business Model of CCS Projects Unlocks High-CO2 Fields

_ This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 214359, “Business Model of Carbon Capture and Storage (CCS) Projects for High-CO2 Fields,” by Hasnor Lot, SPE, Andrew Yeow, SPE, and Anuar Buang Mahmood, SPE, Petronas, et al. The paper has not been peer reviewed. _ High-CO2 gas fields present a problem to host governments wanting to both ensure security of supply and achieve net-zero aspirations. While carbon capture and storage (CCS) technology holds the promise of technical feasibility to unlock these fields, its commercial success ultimately hinges on the choice of an appropriate business model. This study compares the economics of the traditional business model [i.e., CCS as part of the upstream petroleum operation dedicated to a production sharing contract (PSC)] vs. the alternative business model [i.e., a regional CCS hub separately managed by a special-purpose vehicle (SPV)]. For simplicity, this paper uses the term CCS throughout, although the discussions apply equally well to carbon capture, usage, and storage projects. Background Gas Value Chain and the Cost of Gas (COG). With its higher development, transportation, and processing costs; longer and flatter production profile; and needs for network infrastructure, the economics of gas development is often less robust than that of oil. Therefore, gas development requires not only the establishment of long-term contracts and a complex value chain but also active government support in the form of friendly fiscal and tax regimes and a fair gas-pricing policy. In addition to its role as the upstream regulator, a national oil company (NOC) may also participate in the gas market as an aggregator. Effectively, the NOC signs an upstream gas-sales agreement (UGSA) with upstream contractors committing to buy gas at a volume and price palatable to them. The aggregator then sells the gas it now owns to downstream users. The margin between the buying and selling prices makes up the aggregator’s profit. In return, the aggregator takes on the intermediary roles of matching supply to demand, coordinating fair nomination and curtailment mechanisms, and ensuring that the gas chain as a whole is flexibly robust against operational disruptions. An NOC enjoys the dual roles of operating as a national corporation and acting as the upstream regulator. In its regulatory role, the NOC is cognizant of the need to allocate the risks and rewards of a CCS investment in a fair and efficient manner between participating parties. The business model must improve the overall economic return for both the upstream contractor and the SPV while enhancing the NOC’s integrated value. The business model so designed must also achieve the NOC’s longer-term goal of unlocking resource opportunities and monetizing stranded gas fields.

Repurposing End-of-Life Coal Mines with Business Models Based on Renewable Energy and Circular Economy Technologies

This paper presents a methodology to select the most exciting business models based on renewable energy and circular economy technologies within end-of-life coal mines to help develop a renewable-based energy sector, promote sustainable local economic growth, and maximise the number of green and quality jobs. To achieve this goal, first, a structural analysis was developed to select the technical variables that better identify this complex system. Second, a morphological analysis allowed the construction of the scenario space. Third, a multicriteria assessment was developed to achieve this goal, based on the previously assessed relevant scenarios, considering the European Green Deal policies, technical variables that characterise end-of-life coal mine environments, technology readiness level, the European taxonomy, synergistic potentials, contributions to the circular economy, and sector coupling. Finally, result indicators were selected to analyse the alternative options derived from the justification approach, considering the targets set by the European Green Deal and related taxonomy and the regional policy indicators for the Just Transition Fund. The results show that eco-industrial parks with virtual power plants represent the most appropriate business model choice, according to the scoring given to the different aspects. They may be complemented by a hydrogen production plant, provided that specific economic subventions are obtained to achieve balanced financial results.

Artificial intelligence and new business models in agriculture: the “ZERO” case study

PurposeThis study aims to investigate the use of Artificial Intelligence (AI) applied to vertical farms to evaluate whether disrupting technology supports sustainability and increases strategic business model choices in the agricultural sector. The study responds through empirical analysis to the gap on the subject of AI-driven business models present in the growing sector literature.Design/methodology/approachThe paper analyzes the case of “ZERO”, a company linked to the strategy innovation ecosystem of the Ca’ Foscari University of Venice, Italy. The empirical data were collected through a semi-structured questionnaire, interviews and the analysis of public news on the business model available in the analyzed case study. The research is empirical and uses exploratory, descriptive analysis to interpret the findings. The article focuses on the evaluation of AI impact on the agricultural sector and its potential to create new business models.FindingsThe study identified how AI can support the decision-making process leading to an increase in productivity, efficiency, product quality and cost reduction. AI helps increase these parameters through a continuous learning process and local production, and the possible decrease in prices directed toward the goal of zero km food with fresh products. AI is a winning technology to support the key elements of the vertical farm business model. However, it must be coupled with other devices, such as robots, sensors and drones, to collect enough data to enable continuous learning and improvement.Research limitations/implicationsThe research supports new research trends in AI applied to agriculture. The major implication is the construction of ecosystems between farms, technology providers, policymakers, universities, research centers and local consumer communities.Practical implicationsThe ZERO case study underlines the potential of AI as a destructive technology that, especially in vertical farms, eliminates external conditions by increasing productivity, reducing costs and responding to production needs with adequate consumption of raw materials, boosting both environmental and social sustainability.Originality/valueThe study is original, as the current literature presents few empirical case studies on AI-supporting business models in agriculture. The study also favors valuable strategic implications for the policies to be adopted in favor of new business models in agriculture.

DIGITAL TECHNOLOGY BASED BUSINESS MODEL DESIGN ANALYSIS

This research investigates how digital technology aid in the development of new business models in the creative industries. A holistic business model framework was built through a thorough literature study, which was then utilized to assess empirical evidence from the creative industries. According to the findings, digital technology have permitted widespread changes in company structures, and several noteworthy patterns have emerged. However, the redesigned business models are frequently not 'new' in the sense of being unprecedented. Business model innovation primarily manifests itself in the use of digital technology to enable the deployment of a broader choice of business models than was previously available to a corporation. The increasing adoption of numerous business models as a portfolio inside one corporation is a key rising trend. This occurs in enterprises of all sizes when a single firm employs numerous business models to service distinct market groups, offer different products, or engage in multi-sided markets, or employs changing business models over time. A recursive learning process refines and extends the holistic business model framework, which can serve as a cognitive instrument for comprehending business models as well as a planning tool for business model improvements. The study advances our understanding of business model theory and how digital technologies enable business model innovation in the creative industries. Three new study topics for the future are emphasized.

A case study of corporate diversification and vertical integration in Africa

Africa is home to some of the world’s most original, resilient, and remarkable companies. The singular challenges and opportunities of the continent’s economic environment have given rise to idiosyncratic strategies and business models. However, there is a notable absence of studies on African companies. While there are numerous noteworthy companies in Africa, there are few as relevant, successful, and influential as the Dangote Group. This paper aims to add to the limited literature in the area by analyzing the business model and strategic choices of Dangote Cement, the Group’s flagship business and one of Africa’s industrial giants. In particular, it explores its corporate diversification and vertical integration strategies, which are at the core of its success. This article is based on 7 interviews with internal and external Dangote stakeholders and a detailed questionnaire completed by the Strategy Department of the firm, together with public data of the company. While the topics of diversification and integration have been studied in multiple contexts, this article provides an original perspective by applying existing research and management thinking to the specific business environment of Africa. This paper explores how and why Dangote Cement diversifies and how it identifies and integrates the advantages and disadvantages of its strategic choices. We believe it provides an original perspective that furthers our limited collective understanding of and research on strategic practices in Africa, the world’s last business academic frontier.

Economic diversity of Maine's American lobster fishery

Maine's coastal communities critically depend on the American lobster fishery, which is now exposed to ocean warming. There is uncertainty about the future robustness of the stock and the economic performance of the fleet appears vulnerable. This research characterizes economic heterogeneity in Maine's fishing fleet using latent class stochastic profit frontier analysis. We explore the diversity of business models and examine how they are associated with the economic performance of the fleet in the prewarming period. The study uses unique firm-level data that capture the operational and economic information of the harvesters in the year 2010, the year before the reported environmental change in the Gulf of Maine. Our findings indicate that economic efficiencies differ based on their choice of business models and it was found that technical upgrades generally contribute to improved economic performance in the prewarming period. Reported societal benefits associated with employment levels have characterized the lobster production environment over firm-level efficiency. This research establishes a critically important baseline for future comparison and quantification of policy reforms within the US lobster fishery.

The Impact of the Business Model on the Size of Investments Received by a Startup at the Series A Stage in the US Market

Numerous studies have been devoted to the factors influencing the market success of startups. However, at early stages of startup development, obtaining investments is a priority. Nevertheless, the topic of the influence of various factors, specifically the choice of business model, on the amount of investment received by a startup remains underexplored. Therefore, the aim of this research is to assess the impact of the business model on the amount of investment received by a startup at the Series A stage. The hypothesis being put forward is that the business model patterns utilized by the startup impact the amount of investment received at the Series A stage. To achieve this goal and test the hypothesis, Student's t-test and Mann-Whitney test were applied to a sample of 2313. As a result of the study, the influence of the business model for different industries was revealed. Considering that different business models have varying effects on the amount of investment, models leading to an increase or decrease in investment size were identified for startup founders. The results of this article enable startups to compare their chosen model with those that allow for larger investments and to adjust their chosen strategy. Additionally, this study stands out due to the uniqueness of the methods applied within the scope of the issues covered in the article and the unique sample size in assessing the impact of the business model factor. The findings of this research serve as a catalyst for incorporating the business model factor into further studies dedicated to a comprehensive assessment of a startup's investment attractiveness and the creation of a machine learning model to predict the success of obtaining investments and the amount of investment a startup can expect.

Disrupt Framework як основа побудови бізнес-моделі підприємства на засадах підривних інновацій в умовах сталого розвитку

The results of research in the field of designing a business model of an enterprise in conditions of sustainable development through the introduction of innovations are presented. The role of disruptive innovations in business process reengineering is highlighted. The concept of 4P innovations is presented, the classification of innovations according to the level of technological novelty and impact on the market is carried out. The main types of circular business models are described (cyclical, extending, intensifying, dematerialising). The basic characteristics of the DISRUPT framework for enterprises creating products/services for the circular economy are outlined. The European Commission aims to ensure coherence between industrial, environmental, climate and energy policies to create an optimal business environment for sustainable growth, job creation and innovation. The Commission has developed an ambitious program to transform the EU economy into a circular economy, where the value of products and materials is preserved for as long as possible, which brings great economic benefits. For businesses, working together to create a basis for sustainable products opens up new opportunities in the EU and beyond, including and for Ukraine In fact, we are talking about business reorganization, changing the business model, taking into account values and innovations. Circular business model is an umbrella term for completely different business models that seek to use fewer materials and resources to produce products and services, and to extend the life of existing products and services through repair and restoration, recycling and reuse. Thus, innovative business models of the circular economy arise and develop, first of all, in an urbanized and environmentally responsible environment and are aimed at reducing dependence on material resources, increasing efficiency and increasing profits Innovation is a continuous process that involves delivering innovation as a service to customers by bringing together the right people, processes and tools. Disruptive innovations are innovations that change the relationship of values in the market environment. At the same time, the existing products become uncompetitive simply because the parameters on the basis of which the competition used to take place become less important. Such innovative technologies, which eliminate or reduce dependence on non-renewable natural resources, significantly increase the quality of life or provide a technological transition in the use of a certain product (service). The main criteria are: high potential need of humanity or a large number of users; high availability for everyone; relatively low cost. And this approach can actually change those industries that need to be rebooted and function in conditions of sustainable development. The circular economy involves the construction of dynamic structures (often combining enterprises of different industries) and actually stimulates the process of transformations at each link of business processes. Therefore, for the implementation of the product strategy, enterprises in the context of sustainable development can use such tools as DISRUPT framework. Obviously, the choice of a circular business model should be situational, based on research of the market environment and an adequate assessment of the company, and only then will it be possible to achieve goals and strategic advantages.

Servitization for the Environment? The Impact of Data-Centric Product-Service Models

ABSTRACT Recent developments in data-centric technologies (e.g., big data, Internet of Things, cloud computing) have given rise to the data-centric models, such as servitization. Servitization here refers to firms selling a product as a service instead of selling product ownership, which has been viewed as a green business model that can benefit the environment. Despite the potential environmental superiority of servitization, previous studies and empirical observations have shown that the servitization model may generate lower profits than the conventional product sales model, which poses challenges for firms to choose their business models. However, the existing literature has not considered the role of data-centric technologies that are increasingly embedded in the servitization model, in which firms can co-create value with consumers by leveraging product usage data to improve service offerings. In this study, we build an analytical model to scrutinize the economic and environmental performance of the data-centric servitization model compared to the product model. We find that the data-centric servitization model is more profitable than the product model only when a firm’s service improvement capability is relatively high. Unfortunately, a high service improvement capability may exacerbate the negative environmental impact, resulting in the servitization model being less environmentally friendly than the product model. We discuss the circumstances under which using the servitization model can yield win-win outcomes in terms of profitability and environmental impact. The findings can help managers and policymakers reconcile the tension between firm profitability and environmental damage and make judicious decisions on business model choices and the application of emerging data-centric technologies.

Organising family and business: Affective value prioritisation amongst older entrepreneurs

This paper explores the entrepreneurial motivations of older entrepreneurs, specifically the importance of affective motivations and the influence of family and personal wellbeing on older entrepreneurs’ decisions to start-up and their subsequent business model choices. Departing from the extant literature examining the effects of family on firm and vice versa, the focus here is on the influence of family outside the boundary of the firm. Drawing on socioemotional selectivity theory (SST), the paper reports a study of older entrepreneurs who report motivations that prioritise family-based affective value external to the enterprise itself. As such, the paper contributes new knowledge on motivations for entrepreneurship and the embedded nature of family and business, particularly for older entrepreneurs.

Reselling or agency model under markdown pricing policy in the presence of strategic customers

This paper establishes a game‐theoretic model to investigate the effect of strategic customers on the business model choice between the reselling and the agency models under a markdown pricing policy. We find that the supplier always prefers the agency model whereas the retailer's preference depends on the commission rate, the proportion of strategic customers, and the supplier's inventory level. Results also reveal that regardless of the business model, the proportion of strategic customers, the patience level of strategic customers, and the supplier's inventory level are three driving forces in the markdown pricing policy. Finally, different from the conventional wisdom that suggests the centralized decisions always outperform the decentralized decisions, we find that the decentralized decisions under the agency model can achieve the same performance as the centralized decisions when the supplier has a relatively small inventory level. Surprisingly, when the supplier has a relatively large inventory level, the agency model outperforms the centralized model since the former leads to lower prices and stimulates more demand.

Sharing Platform Ontology Development: Proof-of-Concept

A sharing platform is a digital platform that facilitates access to underutilized goods by renting or lending them to others. Users become less dependent on ownership which improves efficiency, sustainability, and the sense of community. The Sharing Economy (SE) is considered a complex domain because value co-creation can occur between multiple types of platform users. Developing platform software that offers the right functionality for the intended digital platform is therefore challenging. To address this complexity, an ontology can be utilized, which is an explicit specification of a conceptualization that provides a controlled vocabulary and shared meaning regarding a domain. The use of a sharing platform ontology allows for more effective communication and knowledge sharing amongst stakeholders in platform development and eventually drives the platform software development process. However, currently, it is not known how to develop such an ontology. In previous research, we developed the Digital Platform Ontology (DPO) and an extension of the DPO for describing platform business model choices. The DPO describes the digital platform domain in terms of digital platform types, including sharing platforms. However, a method to use the DPO and its business model extension for developing an organization-specific ontology that describes the functionality and business model of a specific existing or intended sharing platform was lacking. In this paper, we develop such a method using the Design Science Research Methodology (DSRM) and demonstrate it using a proof-of-concept based on the BlaBlaCar and Couchsurfing platforms.

Single- or multi-sided business models: how does time perception influence business model choice

Various cognitive factors can influence managerial decisions about business models; in particular, this article reveals how time representation affects entrepreneurs' business model choices over time. By studying four start-ups pursuing emerging internet of things applications in real-life contexts, this article reveals that when the entrepreneurs perceive time urgency, they rely on information and knowledge from their personal backgrounds and adopt single-sided business models. Conversely, when no perceived time urgency exists, entrepreneurs devote more time to exploring their environments and can develop alternative business model configurations. This research contributes to debates about the relationship between technology and business models and reveals that the type of technology affects an entrepreneur's time perception, which influences business model choice. The findings then can help entrepreneurs select a business model by acknowledging how their unconscious mental representation of time influences their choice.