Showing papers on "Business model published in 2007"

Business model innovation: it's not just about technology anymore

Abstract: Purpose – To innovate the company business model, executives must first understand what it is, and then examine what paths exist for them to improve on it. This article aims to examine this issue.Design/methodology/approach – The article provides a practical definition of business models and offers a Business Model Framework (BMF) that illuminates the opportunities for business model innovation.Findings – The article finds that BMF sequences possible business models from very basic (and not very valuable) models to far more advanced (and very valuable) models. Using the BMF, companies can assess where their current business model stands in relation to its potential and then define appropriate next steps for the further advancement of it.Practical implications – An organization must give a senior manager the resources and authority to define and launch business‐model experiments.Originality/value – The article provides a cogent model for assessing the potential for new business model innovation, a framewor...

What Is Web 2.0: Design Patterns and Business Models for the Next Generation of Software

Abstract: This paper was the first initiative to try to define Web2.0 and understand its implications for the next generation of software, looking at both design patterns and business modes. Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.

Open Innovation and Strategy

Abstract: The increasing adoption of more open approaches to innovation fits uneasily with current theories of business strategy Traditional business strategy has guided firms to develop defensible positions against the forces of competition and power in the value chain, implying the importance of constructing barriers rather than promoting value creation through openness Recently, however, firms and even whole industries, such as the software industry, are experimenting with novel business models based on harnessing collective creativity through open innovation The apparent success of some of these experiments challenges prevailing views of strategy At the same time, many of these experimenters now are grappling with issues related to value capture and sustainability of their business models, as well as issues of corporate influence and the potential co-option of open initiatives These issues bring us back to traditional business strategy, which can offer important insights To make strategic sense of innovation communities, ecosystems, networks, and their implications for competitive advantage, a new approach to strategy—open strategy—is needed Open strategy balances the tenets of traditional business strategy with the promise of open innovation

Business Model Design and the Performance of Entrepreneurial Firms

Abstract: 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.

Why Companies Should Have Open Business Models

Abstract: Because of two trends ? rising R&D costs and decreased product revenues (due to shorter product life cycles) ? companies are finding it increasingly difficult to justify investments in innovation. Business models that embrace open innovation address both issues. The development costs of innovation are reduced by the greater use of external technology in a firm?s own R&D process. This saves time, as well as money. And the firm no longer restricts itself to the markets it serves directly. Now it participates in other segments through licensing fees, joint ventures and spinoffs, among other means. These different streams of income create more overall revenue from the innovation. To partake more fully in the benefits of open innovation, companies need to develop the ability to experiment with their business models, finding ways to open them up. Building that capability requires the creation of processes for conducting experiments and for assessing their results. Although that might seem obvious, many companies simply do not have such processes in place. In most organizations, no single person short of the CEO bears responsibility for the business model. Instead, business unit managers (who are usually posted to their jobs for just two to three years) tend to take the business model for granted. To understand how an organization can open its business model, the author provides case examples of IBM, P&G and Air Products, three companies that operate in different industries with vastly different technologies and products. Each used to function with a very internally focused, closed business model. And each has since migrated to a business model that is substantially more open.

Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View

Abstract: Executive Overview The bottom of the pyramid (BOP) in the global distribution of income has been promoted as a significant opportunity for companies to grow profitably. Under the BOP approach, poor people are identified as potential customers who can be served if companies learn to fundamentally rethink their existing strategies and business models. This involves acquiring and building new resources and capabilities and forging a multitude of local partnerships. However, current BOP literature remains relatively silent about how to actually implement such a step into the unknown. We use two BOP cases to illustrate a strategic framework that reduces managerial complexity. In our view, existing capabilities and existing local BOP models can be leveraged to build new markets that include the poor and generate sufficient financial returns for companies to justify investments.

Managing Business Complexity: Discovering Strategic Solutions with Agent-Based Modeling and Simulation

Abstract: Agent-based modeling and simulation (ABMS), a way to simulate a large number of choices by individual actors, is one of the most exciting practical developments in business modeling since the invention of relational databases. It represents a new way to understand data and generate information that has never been available before-a way for businesses to view the future and to understand and anticipate the likely effects of their decisions on their markets and industries. It thus promises to have far-reaching effects on the way that businesses in many areas use computers to support practical decision-making. Managing Business Complexity is the first complete business-oriented agent-based modeling and simulation resource. It has three purposes: first, to teach readers how to think about ABMS, that is, about agents and their interactions; second, to teach readers how to explain the features and advantages of ABMS to other people and third, to teach readers how to actually implement ABMS by building agent-based simulations. It is intended to be a complete ABMS resource, accessible to readers who haven't had any previous experience in building agent-based simulations, or any other kinds of models, for that matter. It is also a collection of ABMS business applications resources, all assembled in one place for the first time. In short, Managing Business Complexity addresses who needs ABMS and why, where and when ABMS can be applied to the everyday business problems that surround us, and how specifically to build these powerful agent-based models.

Innovation as a Learning Process: Embedding Design Thinking:

Abstract: There is a generic innovation process, grounded in models of how people learn, that can be applied across multiple sectors. It can be applied to the design and development of both hardware and software products, to the design of business models and services, to the design of organizations and how they work, and to the design of the buildings and spaces in which work takes place, or within which companies interact with their customers. This article describes such a model of innovation, grounding it in learning models and developing its implications for understanding, implementing, and engaging in the innovation process. The article focuses on the value and functions of multifaceted innovation teams. It notes the difficulties inherent in innovation efforts, shows where some of the pitfalls are for organizations attempting to innovate, and emphasizes the need to be flexible and adaptive in using the innovation process.

Participative Web And User-Created Content: Web 2.0 Wikis and Social Networking

Abstract: The Internet is becoming increasingly embedded in everyday life Drawing on an expanding array of intelligent web services and applications, a growing number of people are creating, distributing and exploiting user-created content (UCC) and being part of the wider participative web This study describes the rapid growth of UCC and its increasing role in worldwide communication, and draws out implications for policy Questions addressed include: What is user-created content? What are its key drivers, its scope and different forms? What are the new value chains and business models? What are the extent and form of social, cultural and economic opportunities and impacts? What are the associated challenges? Is there a government role, and what form could it take?

A Process model of strategic business exit: Implications for an evolutionary perspective on strategy

Abstract: The process model of strategic business exit (SBE) maps the activities of different levels of management onto the business and corporate levels of strategy making involved in Intel Corporation's exit from its core dynamic random access memory (DRAM) business. The SBE process model contributes to the development of an evolutionary process theory of strategy making by conceptualizing the pattern of managerial activities through which resources and corporate competencies are internally redirected toward more viable business opportunities, and the strategic context of a core business dissolves. The SBE process model corroborates the usefulness of the Bower-Burgelman process model for conceptualizing strategy making in complex organizations.

Measuring the Quality of E-Banking Portals - an Empirical Investigation

Abstract: Purpose - In the internet economy, the business model of web portals has spread rapidly over the last few years. Despite this, there have been very few scholarly investigations into the services and characteristics that transform a web site into a portal as well as into the dimensions that determine the customer's evaluation of the portal's service quality. Design/methodology/approach - Based on an empirical study in the field of e-banking, the authors validate a measurement model for the construct of web portal quality based on the following dimensions: security and trust, basic services quality, cross-buying services quality, added value, transaction support and responsiveness. Findings - The identified dimensions can reasonably be classified into three service categories: core services, additional services, and problem-solving services. Originality/value - The knowledge of these dimensions as major determinants of consumer's quality perception in the internet provides banks a promising starting point for establishing an effective quality management for their e-businesses.

Innovation networks: From technological development to business model reconfiguration

Abstract: This case study presents an example of how a technological innovation network provides the necessary resources to change the business model, in order to achieve global competitiveness. It describes the R&D investments of a family-operated business that supplies the aluminum industry with metals and non-ferrous metal alloys. Seven years ago, when the company was facing a severe financial crisis, it ignited a “re-birth” process through research activities, which developed a product known as “aluminum tablets”. The company established changes and brought product innovations by introducing tablets from steel scraps with aluminum alloys through “water atomization” technology. The impact of this innovation was not limited to the new product's technological aspect, but it also changed the company's operational and commercial activities, which ultimately resulted in a more comprehensive customer base focused in foreign trade. The present work appraises the evolution and development of this product, supported by a theoretical reference focused on innovation networks and business models.

A BPMN Extension for the Modeling of Security Requirements in Business Processes

Abstract: Business Processes are considered a crucial issue by many enterprises because they are the key to maintain competitiveness. Moreover, business processes are important for software developers, since they can capture from them the necessary requirements for software design and creation. Besides, business process modeling is the center for conducting and improving how the business is operated. Security is important for business performance, but traditionally, it is considered after the business processes definition. Empirical studies show that, at the business process level, customers, end users, and business analysts are able to express their security needs. In this work, we will present a proposal aimed at integrating security requirements through business process modeling. We will summarize our Business Process Modeling Notation extension for modeling secure business process through Business Process Diagrams, and we will apply this approach to a typical health-care business process.

Three ways to successfully innovate your business model

Abstract: Purpose – The purpose of this paper is to find out what exactly the term business model innovation encompasses and what type yields the best results.Design/methodology/approach – IBM Consulting researchers first identified the main types of business model innovation, which can be used alone or in combination. They then compared these three types of business model innovation across 35 best practice cases.Findings – The study found that all new business models can be classified into three types: innovations in industry models; in revenue models and in enterprise models. A key finding was that each type of business model innovation, with the right strategy and strong execution can generate success.Practical implications – Researchers found that while network plays are being used by diverse companies in different industries and regions and of varying age, size and other characteristics, this tactic has been a particularly useful strategy for older companies.Originality/value – The study found that best busine...

Ecopreneurship – a new approach to managing the triple bottom line

Abstract: Purpose – The purpose of this paper is to extend research into social and ecological entrepreneurship. It aims to examine how ecopreneurs can create an economically viable business whilst retaining their core environmental and social values.Design/methodology/approach – An exploratory approach within the phenomenological research paradigm. Single case study of Green‐Works triangulating data collection – semi structured interviews, micro‐ethnography and document analysis. Inductive approach.Findings – A strong link is identified between entrepreneurialism and environmentalism. The entrepreneurial flair of the CEO enables the pursuit of environmental, social and economic goals. The success of the Green‐Works business model stems from the business's symbiotic relationships: firstly with large corporate bodies, which are keen to quantify their CSR efforts; secondly, with the community and social partners, who provide employment and training for disadvantaged people and a route to relatively risk free growth; ...

Evaluating the business value of RFID: Evidence from five case studies

Abstract: This paper presents an in-depth analysis toward understanding the business value components an organization can derive from adopting radio frequency identification (RFID). Although this subject is currently a hot topic, many organizations are slow in warming up to the idea of using RFID to conduct more effective and efficient business processes. We propose a framework for evaluating the business value of RFID technology, hoping that a better understanding of the business value of RFID will encourage more organizations to implement it. Emphasis is on delivering business value through refining business processes and expanding the business model. We illustrate these concepts drawing on the experience of five early adopters from the Taiwan healthcare industry and formulate this framework as a set of propositions based on relevant literature, cases from pioneers in the field and our intuition. These propositions will need to be validated through empirical evidence. r 2007 Elsevier B.V. All rights reserved.

Cocreating business's new social compact.

Abstract: Moving beyond decades of mutual distrust and animosity, corporations and nongovernmental organizations (NGOs) are learning to cooperate with each other. Realizing that their interests are converging, the two sides are working together to create innovative business models that are helping to grow new markets and accelerate the eradication of poverty. The path to convergence has proceeded in three stages. In the initial be-responsible stage, companies and NGOs, realizing that they had to coexist, started to look for ways to influence each other through joint social responsibility projects. This experience paved the way for the get-into-business stage, in which NGOs and companies sought to serve the poor by setting up successful businesses. In the process, NGOs learned business discipline from the private sector, while corporations gained an appreciation for the local knowledge, low-cost business models, and community-based marketing techniques that the NGOs have mastered. Increased success on both sides has laid the foundation for the cocreate-business stage, in which companies and NGOs become key parts of each other's capacity to deliver value. When BP sought to market a duel-fuel portable stove in India, it set up one such cocreation system with three Indian NGOs. The system allowed BP to bring the innovative stove to a geographically dispersed market through myriad local distributors without incurring distribution costs so high that the product would become unaffordable. The company sold its stoves profitably, the NGOs gained access to a lucrative revenue stream that could fund other projects, and consumers got more than the ability to sit down to a hot meal-they got the opportunity to earn incomes as the local distributors and thus to gain economic and social influence.

Putting the Resource-Based View of Strategy and Distinctive Competencies to Work in Public Organizations

Abstract: A key to the success of public organizations is their ability to identify and build capacity, particularly their distinctive competencies, in order to produce the greatest value for key stakeholders. This article grounds this proposition in the resource-based view of organizations and presents a method for identifying and making use of distinctive competencies in the form of a "livelihood scheme"-a business model appropriate for the public sector-that links distinctive competencies to organizational aspirations and goals. The case of a major public sector training and consultancy unit that is part of the United Kingdom's National Health Service is used as illustration. A number of conclusions are offered in the form of a set of propositions tied to the resource-based view and related research issues. The results contribute to both public strategic management theory and practice.

Open Innovation – The Dutch Treat: Challenges in Thinking in Business Models

Abstract: This article covers the subject of the practical application of the principles of open innovation in Dutch industry. Open innovation is considered to be the third stage in evolving systems for innovation management. The results of the study showed that innovative Dutch companies have successfully adopted the principles of open innovation regarding open innovation culture and importing mechanisms. Some challenges are found in the use of exporting mechanisms; but the biggest challenges for innovative Dutch companies lie in the flexible and open way of handling their business models.

Finding, Forming, and Performing: Creating Networks for Discontinuous Innovation

Abstract: Many industries today face a fast pace of technological and market change where the shifts are not just more-of-the-same. Instead, they are characterized by periods of discontinuous change in which the companies that emerge as the new winners often have competencies, backgrounds, and networks of relationships that are very different from the previous incumbents. Lego used to compete head-tohead with Mattel and Hasbro in brick sets and action figures; now it has to come to grips with the latest digital device or online offering from Sony, Nintendo, and Electronic Arts. GSK used to see Merck, Novartis, and Pfizer as its principal competitors; now it is equally worried about the proliferation of new drug compounds from biotechnology companies. While discontinuous changes of this type have occurred throughout history, there is evidence that they are becoming more frequent and more severe. 1 The implication for many firms—and particularly those in fast-moving, high-technology industries—is that they need to increase their capacity for discontinuous innovation, i.e., the implementation of new technologies, products, or business models that represent a dramatic departure from the current state of the art in the industry. 2 This article examines how firms create new networks (with customers, suppliers or other partners) as one part of this capacity for discontinuous innovation.

Business owners' action planning and its relationship to business success in three African countries

Abstract: A model of business success was developed with motivational resources (locus of control, self-efficacy, achievement motivation, and self-reported personal initiative) and cognitive resources (cognitive ability and human capital) as independent variables, business owners' elaborate and proactive planning as a mediator, and business size and growth as dependent variables. Three studies with a total of 408 African micro and small-scale business owners were conducted in South Africa, Zimbabwe, and Namibia. Structural equation analyses partially supported the hypotheses on the importance of psychological planning by the business owners. Elaborate and proactive planning was substantially related to business size and to an external evaluation of business success and was a (partial) mediator for the relationship between cognitive resources and business success. The model carries important implications for selection, training, and coaching of business owners.

Business Modelling Revisited: The Configuration of Control and Value

Abstract: This paper provides a theoretically grounded framework for designing and analysing business models for (mobile) ICT services and systems. It reviews the most topical literature on business modelling, as well as general strategic management, industrial economics and network economics literature, constructing a new integrated framework. Business model design is interpreted as the (re)configuration of control parameters on the one hand, and value parameters on the other hand within a particular innovation system.

Applying Grey Relational Analysis and Grey Decision-Making to evaluate the relationship between company attributes and its financial performance-A case study of venture capital enterprises in Taiwan

Abstract: For the study on the financial performance, there are many limitations in using traditional statistic methods. The grey system theory proposed by the study is to supplement the limitations of using traditional statistic methods and it's more suitable to evaluate the financial performance of business. This study used six financial indicators to classify twenty items of financial ratios as research variables through the Globalization Grey Relational Analysis (GRA), to find the significant financial ratio variables and other financial indicators affecting the financial performance of venture capital enterprises in Taiwan, and it applied Grey Decision-Making (GDM) to arrange the total performances of the sample venture capital enterprises in order. Finally, this study uses GM(0, N) model to analyze the six variables of firm attributes and the differences between using different firms' attribute variables and financial performance of venture capital enterprises as the result.