Business Model Dimensions Research Articles

Responding to open business models

PurposeThe purpose of this paper is to provide guidelines for practitioners in choosing the right response to potential threats by open business models.Design/methodology/approachThe study focuses on identifying the dimensions of open business models. It consisted of 32 interviews with experts on open business models complemented by panel discussions with a selection of experts to validate the findings.FindingsFive dimensions of open business models are identified: motivation, object, community, action and governance. Based on those dimensions, three responding strategies are proposed.Practical implicationsThis paper offers insights for strategists and entrepreneurs who consider developing open business models or are attacked by competitors or other market players with open business models.Originality/valueComplementing previous research, this paper highlights how the five dimensions of open business model can serve as a tool to design appropriate strategies when confronted with new forms of competition.

Suggesting a service research agenda in sports tourism: working experience(s) into business models

PurposeBusiness models describe how value is delivered to customers/consumers. When considering sport tourism, the focus on delivering value shifts to the sport experiences being offered in a destination. The purpose of this paper is to fulfil a void that links concept of business models to the area of sport tourism management by integrating notions of experience.Design/methodology/approachTo merge these areas, a review of literature identifies key approaches and missing links. This paper determines research gaps to propose a new holistic research agenda for sport services – specifically relevant to sport tourism.FindingsThis paper addresses types of sport experiences, economic dimensions of experiences and business models to determine capabilities of delivering different types of experiences. These inter-related fields of analysis represent a platform for both academic and business stakeholders to shape the future of delivering sport tourism experiences based on seeking a wider range of motivations in a specific spatial and activity context.Originality/valueA series of research questions and proposals are identified to support the need for future research. Extending understandings of experience in relation to consumer demand has the potential to result in practical elements of sought after experiences being incorporated into business models – aimed at delivering service value.

Technological innovation mediated by business model innovation: app developers moving into health

Numerous technology firms are moving into health, and with their entry they bring innovation in technologies and in business models. The impact of both types of innovation in the health industry is still emerging. To investigate innovation in business models, we held technological innovation relatively constant by drawing data from one technology - the most downloaded apps in iTunes' health and fitness category - and coding the business model dimensions of the firms that developed them. This study examines the differences between incumbents and newcomers in health in four business model dimensions: identifying customers, engaging with customers, monetisation processes, and logistics and governance of the firms. When compared to incumbents, newcomers to health are more often displayed innovation in business model dimensions. Our data suggest that newcomers bring new strategies for customer engagement, customer identity, and monetisation of services, which ultimately lead to altered relationships among actors in health.

How Can Blockchain Technology Disrupt the Existing Business Models?

Objective: The main purpose of the paper is to show that blockchain technology may disrupt the existing business models and to explore how this may occur. Research Design & Methods: This is a theory development paper which relies on a literature review and desk re-search. The discussion of the reviewed sources leads to the formulation of three re-search propositions. Findings: The paper provides a short overview of key literature on business models and business model innovation, indicating, among others, that new technologies may be one of the drivers of business model innovation. This study also provides an overview of blockchain technology and a range of its business applications showing how it can disrupt business models. It is shown that blockchain technology may affect many dimensions of business models. We propose that there are three crucial ways in which blockchain technology can affect and disrupt business models: by authenticating traded goods, via disintermediation and via lowering transaction costs. Implications & Recommendations: This study shows that blockchain technology may affect diverse dimensions of business models in diverse industries. It is recommended that mangers should follow developments in this field in order to prepare for possible disruptions in their industries. Contribution & Value Added: This study provides an analysis of the possible impact of blockchain technology on business model innovation. Blockchain technology is gaining momentum with more and more diverse applications, as well as increasing numbers of actors involved in its applications. This paper contributes to our understanding of the possible applications of blockchain technology to businesses, and in particular to its impact on business models.

Understanding the service infusion process as a business model reconfiguration

This study conceptualizes service infusion as a business model reconfiguration by using a process perspective. Service infusion is therefore understood as a process affecting the business model dimensions of transaction content, structure, and governance. The service-related reconfiguration of the business model is explained by underlying knowledge conversion mechanisms, which provide insights into the development of reconfiguration capacities as important enablers for business model change. Furthermore, this study introduces the concept of service defusion as an important counterpart to service infusion. Both concepts together are found to fully capture firms' strategic options with respect to their service offering components (transaction content), their engagement with, and disengagement from, important business partners (transaction structure), and also their interactions with these important business partners (transaction governance). The conceptually derived understanding of the service infusion process and mechanisms are exemplified via a multi-actor longitudinal illustrative case study. A conceptual grounding for understanding service infusion processes for further theory and concept development is provided, and managers gain an understanding of how to effectively manage the processes underlying service-related business model reconfigurations.

Business model innovativeness: designing a formative measure for business model innovation

Business model innovation is attracting increasing attention in corporate practice and academia. Despite strong interest in the phenomenon, no common understanding of the concept’s meaning has yet been established, hindering dialogue and progress in this research field. This study seeks to build a definition of business model innovation, and to provide a measurement index for the extent of innovativeness of a firm’s changed business model. Based on the business model, business model innovation and product innovation literatures, conceptualise business model innovation as a ‘new-to-the firm’ change that affects at least one out of three business model dimensions: value offering, value creation architecture and revenue model logic. Based on a study among 200 German firms, this study further offers an empirically validated measurement model for business model innovativeness comprising three dimensions and nine indicators. We also emphasise the opportunity-centric potentials of business model innovation as well as the potentials of integrating findings from related research streams into business model innovation research.

Business models for product-oriented house-building companies – experience from two Swedish case studies

Purpose– The purpose of this study is to describe and analyse the business model of product-oriented house-building companies and, hence, bridging the gap of knowledge on this topic. Product-orientation implies an alternative approach to house-building, requiring new knowledge about business models and its characteristics. The balance and fit between the main business model dimensions is specifically focused on to emphasise the importance of a holistic approach.Design/methodology/approach– This study is based on a case study with two leading Swedish, product-oriented house-building companies. Semi-structured interviews with company executives, document studies, site and factory visits, along with seminars at the companies are the main data sources. Theories on business models and product orientation form the theoretical foundation for the study.Findings– The case studies describe two successful companies that used end-customer knowledge to identify a target segment, develop an offering and sequentially increase control over the production and supply chain, with limited investments. This indicates that a market-based outside-in perspective is a successful approach to establish viable house-building concepts with a balance between the business model’s dimensions.Practical implications– The knowledge brought forward in this study is beneficial for practitioners that can learn about product-oriented house-building and how this must be reflected in the company’s business model to be successfully applied.Social implications– The study brings forward knowledge about house-building business models that can contribute to increased house-building targeted on certain customer segments. This can be beneficial in terms of decreased costs and increased volumes of new-built, high-quality homes for a variety of customers on the market.Originality/value– Business models for product-oriented house-building companies are a scarcely covered topic in previous research, and hence, this study provides knowledge of interest for both researchers and practitioners. The case studies reveal unique information of how two companies developed their successful concepts.

Understanding the Gestalt Nature of Business Models: A Business Model Review

As business model centered research has grown significantly over the last decade, the focus has primarily been on establishing an initial understanding of the construct. Much of the existing research has focused on defining business models, yet recent research continues to highlight the lack of common understanding of the nature of business models. In this study, I examine the theoretical foundations of business models and the extent to which each contribution is found within current research through an in-depth analysis of current business model research. Four dimensions of business models are identified and found to present in business model research over 70% of the time. However, recent reviews continue to highlight the continued lack of understanding of the construct alluding to the notion that there is more to business models than the four commonly cited dimensions of structure, value creation, value capture and value networks. Employing the framework of gestalt theory, I propose an additional dimension of business models, opportunity alignment which helps explain how the four foundational dimensions work together to establish clearer understanding of the nature of business models.

Method to Create Proposals for PSS Business Models

Different authors of the product-service bundle literature agree on the fact that business models are central to implement PSS successfully. However, most of the studies about PSS business models mention its importance but do not explore which content should compose such models. Furthermore, PSS business models are explored taking into account a partial view of business model dimensions. Finally, actions that lead to the creation of a new business for PSS or the adaptation of a current one are not distinguished. The goal of this study is to present a guideline to support the creation of PSS business models. Through systematic literature review and consulting with experts, the content of such models were developed. This content is organized in steps that encompass tasks, which must be performed in order to create a PSS business model. The method was already improved after application through a case study and currently is being utilized to generate a PSS business model for a bicycle sharing system. Final considerations include the weak and strong points of the method and further steps to enhance it.

Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions

Research on open innovation suggests that companies benefit differentially from adopting open innovation strategies; however, it is unclear why this is so. One possible explanation is that companies' business models are not attuned to open strategies. Accordingly, we propose a contingency model of open business models by systematically linking open innovation strategies to core business model dimensions, notably the content, structure, and governance of transactions. We further illustrate a continuum of open innovativeness, differentiating between four types of open business models. We contribute to the open innovation literature by specifying the conditions under which business models are conducive to the success of open innovation strategies.

The next digital transformation: from an individual-centered to an everyone-to-everyone economy

Purpose – Based on extensive interviews and analysis, the article aims to explain how the next digital transformation, which is already underway, will result in a paradigm shift from one that is customer-centricity to an everyone-to-everyone (E2E) economy. Design/methodology/approach – For the 2013 IBM Digital Reinvention Study that this article is based on, IBM researchers surveyed approximately 1,100 business and government executives and 5,000 consumers across 15 countries. Thirty leading futurists were also interviewed. Of those interviewed for the executive study, 42 percent are C-level executives, with Chief Executive Officers comprising 10 percent of that group. More than three-fourths of the consumer study participants are university graduates, with 68 percent between the ages of 25 and 54. Findings – E2E is characterized by hyper-connectedness and collaboration of consumers and organizations across the gamut of value chain activities: co-design, co-creation, co-production, co-marketing, co-distribution and co-funding. Prospering in an E2E setting demands disruptive innovation that challenges established norms and blurs organizational boundaries. Practical implications – In the future, organizations will operate in ecosystems of converging products, services and industries. Originality/value – The four key dimensions of the new E2E business models are: connectivity, interactivity, awareness and intelligence.

Business Models for Open Innovation: Matching Heterogenous Open Innovation Strategies with Business Model Dimensions

Business Models for Open Innovation: Matching Heterogenous Open Innovation Strategies with Business Model Dimensions

Constituents of radical innovation—exploring the role of strategic orientations and market uncertainty

Radical innovations are those that provide the biggest boost to the firm's competitive edge in terms of technology, market position, and customer value in general. There is continuing debate concerning the organizational conditions and capabilities that promote or prevent the emergence of different types of radical innovation. The aim in this study is to provide further insights into this issue through an empirical investigation covering the role that two firm-specific strategic orientations—namely technology orientation and customer relationship orientation—play in the process. We examine their effect on three different dimensions of radicalness: the technology, the market and the business model, and also consider the moderating effects of market uncertainty on these relationships. Our findings from an empirical cross-industrial study among 209 Finnish companies suggest that a technology orientation enhances all dimensions of innovation radicalness, whereas a customer relationship orientation positively affects the technological and business model dimensions. The analysis also reveals interesting interaction effects in that market uncertainty negatively moderates the effect of a technology orientation on technological and market radicalness. Overall, the results of the study provide novel evidence concerning the constituents of different types of radical innovation and the environmental contingencies that affect their achievement.

Design Choices Underlying the Software as a Service (SaaS) Business Model from the User Perspective: Exploring the Fourth Wave of Outsourcing

Software as a Service (SaaS) can be viewed as the fourth wave of outsourcing. SaaS is a relatively new type of service delivery model in which a service provider delivers its services over the web to many users on a pay per use or period basis. In the scarce literature available, the SaaS business model is almost always analyzed from the perspective of the service provider perspective, and rarely from the user organization. Using the unified business model conceptual framework, two case studies are investigated to understand the design choices underlying the SaaS business model from the user organization perspective. The analyses on the business model dimensions provided insight into the differences between the case studies and helped to identify eight discriminating design choices that are important when designing SaaS business models. These include the (1) SaaS service characteristics, (2) SaaS value source, (3) SaaS user target group, (4) data architecture configuration and tenancy model, (5) SaaS governance and demand/supply management core competencies, (6) cloud deployment model, (7) SaaS integration and provider strategy and the (8) SaaS pricing structure. An appeal is made for more research into the impact of cloud business models.

Social Applications: Revenue Models, Delivery Channels, and Critical Success Factors - An Exploratory Study and Evidence from the Spanish-Speaking Market

In the context of growing interest in both Mobile-Internet convergence and Web 2.0 social technologies, this article investigates the business opportunities derived from offering Social Applications in the convergent scenario, particularly regarding Social Network and Content Sharing services. Given the business model structural deficiencies identified in literature for this type of convergent services, the investigation is oriented towards the role of the technology delivery channels (either Internet and/or Mobile) and revenue appropriation strategies. A mixed-methods research strategy was employed consisting of a cross-sectional survey of 124 Social Application services offered in Spanish language and seven case studies with representative Social Network and Content Sharing services. While the aim of the survey was to map and identify the overall main characteristics and business model dimensions of Social Applications, the case studies' objective was to understand the strategic reasoning behind business model design and evolution. The research offered a detailed view on the dynamics of Social Network and Content Sharing services, showing how the revenue strategies are tightly linked to the technological delivery channel. Finally, six critical success factors for business models of Content Sharing and Social Network services were identified.

Developing a unified framework of the business model concept

Recent rapid advances in Information and Communication Technologies (ICTs) have highlighted the rising importance of the Business Model (BM) concept in the field of Information Systems (IS). Despite agreement on its importance to an organization's success, the concept is still fuzzy and vague, and there is little consensus regarding its compositional facets. Identifying the fundamental concepts, modeling principles, practical functions, and reach of the BM relevant to IS and other business concepts is by no means complete. This paper, following a comprehensive review of the literature, principally employs the content analysis method and utilizes a deductive reasoning approach to provide a hierarchical taxonomy of the BM concepts from which to develop a more comprehensive framework. This framework comprises four fundamental aspects. First, it identifies four primary BM dimensions along with their constituent elements forming a complete ontological structure of the concept. Second, it cohesively organizes the BM modeling principles, that is, guidelines and features. Third, it explains the reach of the concept showing its interactions and intersections with strategy, business processes, and IS so as to place the BM within the world of digital business. Finally, the framework explores three major functions of BMs within digital organizations to shed light on the practical significance of the concept. Hence, this paper links the BM facets in a novel manner offering an intact definition. In doing so, this paper provides a unified conceptual framework for the BM concept that we argue is comprehensive and appropriate to the complex nature of businesses today. This leads to fruitful implications for theory and practice and also enables us to suggest a research agenda using our conceptual framework.

Developing E-Business Dynamic Capabilities: An Analysis of E-Commerce Innovation from I-, M-, to U-Commerce

This study uses an electronic commerce (E-commerce) innovation model to analyze the differences in technological knowledge, business model, and dynamic capability aspects used in Internet-enabled commerce (I-commerce) versus mobile commerce (M-commerce) versus ubiquitous commerce (U-commerce). The results indicate that the innovation from I-commerce to M-commerce is radical, leading to drastic changes in the business model. However, from M-commerce to U-commerce, disruptive changes occur in both technological and business model dimensions. A set of critical dynamic capabilities for each innovation is identified. These results provide great insight for practitioners and scholars for enhancing their understanding of E-commerce innovation, and provide guidelines to help practitioners adapt from one type of innovation to another.