Designing your future business model: An activity system perspective

Building on the received literature, we conceptualize a firm's business model as a system of interdependent activities that transcends the focal firm and spans its boundaries. The activity system enables the firm to create value in concert with its partners but also to appropriate a share of the value created. Anchored on theoretical and empirical research, we suggest two sets of parameters that activity systems designers need to consider: design elements - content, structure and governance - that describe the architecture of an activity system; and design themes - novelty, lock-in, complementarities and efficiency - that describe the sources of the activity system's value creation.Business model; activity system; design;

Business model innovation: Creating value in times of change

We highlight business model innovation as a way for general managers and entrepreneurs to create and appropriate value, especially in times of economic change. Business model innovation, which involves designing a modified or new activity system, relies on recombining the existing resources of a firm and its partners, and it does not require significant investments in R&D. We offer managers and researchers a conceptual primer on business model innovation emphasizing the importance of system-level thinking.Business model; innovation; activity system; design; value creation;

The business model: Theoretical roots, recent developments, and future research

The paper provides a broad and multifaceted review of the received literature on business models, in which we attempt to explore the origin of the construct and to examine the business model concept through multiple disciplinary and subject-matter lenses. The review reveals that scholars do not agree on what a business model is, and that the literature is developing largely in silos, according to the phenomena of interest to the respective researchers. However, we also found some emerging common ground among students of business models. Specifically, i) the business model is emerging as a new unit of analysis; ii) business models emphasize a system-level, holistic approach towards explaining how firms do business; iii) organizational activities play an important role in the various conceptualizations of business models that have been proposed, and iv) business models seek not only to explain the ways in which value is captured but also how it is created. These emerging themes could serve as important catalysts towards a more unified study of business models.Business model; strategy; technology management; innovation; literature review;

Business Model Innovation: Toward a Process Perspective

Business model innovation matters to managers, entrepreneurs, and academic researchers because it represents an often underutilized source of value and, as such, could translate into sustainable performance advantage. Yet, despite the importance of the topic and the increasing attention it has received from researchers, relatively little is known about the process of business model innovation. To address this gap, this chapter draws on the design literature to derive a generalizable and normative model of the business model innovation process. This contribution links creativity at the individual and firm levels with innovation at the business model level of analysis and thus acknowledges explicitlt the multilevel nature of innovation

Business Model Design and the Performance of Entrepreneurial Firms

We focus on the design of an organization’s set of boundary-spanning transactions—business model design—and ask how business model design affects the performance of entrepreneurial firms. By extending and integrating theoretical perspectives that inform the study of boundary-spanning organization design, we propose hypotheses about the impact of efficiency-centered and novelty-centered business model design on the performance of entrepreneurial firms. To test these hypotheses, we developed and analyzed a unique data set of 190 entrepreneurial firms that were publicly listed on U.S. and European stock exchanges. The empirical results show that novelty-centered business model design matters to the performance of entrepreneurial firms. Our analysis also shows that this positive relationship is remarkably stable across time, even under varying environmental regimes. Additionally, we find indications of potential diseconomies of scope in design; that is, entrepreneurs’ attempts to incorporate both efficiency- and novelty-centered design elements into their business models may be counterproductive

Global Equity Capital Markets for Emerging Growth Firms: Patterns, Drivers, and Implications for the Globalizing Entrepreneur

The expansion and development of global financial markets has led to a rapid rise in foreign IPOs and listings. As the opportunities for financing ventures have increased significantly, so has the complexity of decisions facing entrepreneurs and others who need to tap into these markets. When equity can be sourced virtually anywhere in the world, how do managers make decisions about listing a German firm on the Neuer Markt, Nasdaq, or both? The authors draw upon academic literature and their own research on foreign IPOs on US and German exchanges, as well as interviews with senior executives at firms that chose to list on a foreign exchange. This chapter summarizes some of the key benefits that attract companies to list on foreign exchanges, including gaining access to capital, offering liquidity to existing investors, enhancing the company\u27s reputation at home and abroad, providing currency for acquisitions in the foreign country, offering exit opportunities, dispersing ownership geographically, and achieving a higher valuation. Against these benefits, they present a set of costs, including underpricing and dilution, direct costs of the IPO, reporting requirements, and recurring costs. By weighing these costs and benefits entrepreneurs can develop informed strategies for taking advantage of globalizing equity markets

Strategies for Value Creation in E-Commerce:: Best Practice in Europe

This paper investigates strategies for value creation of e-commerce companies. Our main assumption is that e-commerce fundamentally affects the way business is conducted across many industries. To support this insight, we discuss the unique characteristics of `virtual markets\u27 brought on by the Internet. Based on a survey of 30 European e-commerce companies, we then identify two main strategies for value creation in e-commerce — the efficiency that e-commerce business models exhibit, and the degree to which they create `stickiness.\u27 To illustrate these two strategies, we give examples of European companies that can be considered `best practice\u27 companies

The Business Model: A Theoretically Anchored Robust Construct for Strategic Analysis

Anchored in our research on business models, we delineate in this article a future research agenda. We establish that the theoretical and empirical advancements in business model research provide solid conceptual and empirical foundations on which scholars can build in order to explore a range of important, yet unanswered research questions. We draw inspiration on the direction of the business model research agenda by briefly reviewing several distinct bodies of literature adjacent to the business model literature including new organizational forms, ecosystems, activity systems, and value chain. In doing so, we also distinguish the business model concept from seemingly similar concepts that have been proposed by researchers

The Fit Between Product Market Strategy and Business Model: Implications for Firm Performance

We examine the fit between a firm\u27s product market strategy and its business model. We develop a formal model in order to analyze the contingent effects of product market strategy and business model choices on firm performance. We investigate a unique, manually collected dataset, and find that novelty-centered business models—coupled with product market strategies that emphasize differentiation, cost leadership, or early market entry—can enhance firm performance. Our data suggest that business model and product market strategy are complements, not substitutes

A Proposal of Business Model Design Parameters for Future Internet Carriers

Future Internet evolution requires innovative strategic stances and the design of original business models from actors involved in the ecosystem. The study focuses on Internet Carriers, recently striving to make their business sustainable, and proposes to enclose in a single reference framework all the critical levers, either consolidated or innovative, such actors can employ in order to design their value proposition, value network integration, and financial configuration. The framework grounds its findings on multiple case studies, and, by presenting an insightful list of business model parameters for Carriers, sheds light on key emerging strategic and tactical trends in the Internet interconnections market