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Business model | ||
The term business model is relatively recent. Though it appeared for the first time in the 1950s it rose to prominence and reached the mainstream only in the 1990s. Thus far, the definitions have mostly come from the popular literature. These authors define business model in terms of what they think it should cover. For example, a definition from Osterwalder, Pigneur and Tucci (2005) is that a business model is: “A conceptual tool that contains a set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.†More recently, researchers build definitions based on economic and organizational theories and show that the definitions are econometrically sound. For example, Malone, et al. (2006) at MIT propose an operational definition of business model, based on theories such as those from transaction cost economics. Zott and Amit (2002) from INSEAD and Wharton based their definition on boundary-spanning transactions. Components of a business modelMany different conceptualizations of business models exist (Chesbrough and Rosenbloom 2000; Hamel 2000; Linder and Cantrell 2000; Petrovic, Kittl et al.; Weill and Vitale 2001; Gordijn 2002; Afuah and Tucci 2003; Osterwalder 2004; Fetscherin & Knolmayer 2005). They all have various degrees of resemblance or difference. The model proposed by Osterwalder (2004) synthesises the different conceptualizations into a single reference model based on the similarities of a large range of models. The author's conceptualization describes a business model as consisting of nine related business model building blocks. Thus, a business model describes a company's business: * Value propositions: The company's offers which bundle products and services into value for the customer. A value proposition creates utility for the customer. * Target customer segments: The customer segments a company wants to offer value to. This describes the groups of people with common characteristics for which the company creates value. The process of defining customer segments is referred to as market segmentation. * Distribution channels: The various means of the company to get in touch with its customers. This describes how a company goes to market. It refers to the company's marketing and distribution strategy. * Customer relationships: The links a company establishes between itself and its different customer segments. The process of managing customer relationships is referred to as customer relationship management. * Value configurations: The configuration of activities and resources. * Core capabilities: The capabilities and competencies necessary to execute the company's business model. * Partner network: The network of cooperative agreements with other companies necessary to efficiently offer and commercialize value. This describes the company's range of business alliances. * Cost structure: The monetary consequences of the means employed in the business model. * Revenue model: The way a company makes money through a variety of revenue flows. These 9 business model building blocks constitute a business model design template which allows companies to describe their business model. Related ConceptsThe process of business model design is part of business strategy. The implementation of a company's business model into organizational structures (e.g. organigrams, workflows, human resources) and systems (e.g. information technology architecture, production lines) is part of a company's business operations. It is important to understand that business modeling commonly refers to business process design at the operational level, whereas business models and business model design refer to defining the business logic of a company at the strategic level. Copyright 2008 - France BtoB from Wikipédia
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