Business model archetypes

How familiar are you with different business model archetypes or patterns, such as the 'free' model? Do you always start with a blank sheet when designing a new canvas or would/should you reuse existing models? Or when you analyse an exiting model, would/should you look at what is unique or what it has in common with other models?

Whatever your approach, it is good to be familiar with the individual archetypes that have been identified so far and the classifications (in the form of lists or typologies) used to describe multiple archetypes. Most of this started with trying to describe and understand different e-business models, for example Timmers (1998), Rappa (2000) and Weill & Vitale (2001). Later the specific focus on e-business models became less, although many of the newer models are still associated with the Internet as driver or enabler. Osterwalder & Pigneur (2010) and Johnson (2010) are examples of newer lists that are not e-business focussed.

Next to presenting different lists or typologies and their underlying criteria, some authors also address the application of business model archetypes for business model design and management via, for example,business model composition (Weill & Vitale, 2001), business model decision-making (Morris et al.,2005) and business model maturity (Chesbrough, 2006).

For a more detailed description and discussion see the whitepaper ‘Understanding business models.'

The impact of software-as-a-service on business models of leading software vendors

One of the prominent topics in Business Service Management is business models for (new) services. Business models are useful for service management and engineering as they provide a broader and more holistic perspective on services. Business models are particularly relevant for service innovation as this requires paying attention to the business models that make new services viable and business model innovation can drive the innovation of new and established services. Before we can have a look at business models for services, we first need to understand what business models are. This is not straight-forward as business models are still not well comprehended and the knowledge about business models is fragmented over different disciplines, such as information systems, strategy, innovation, and entrepreneurship. This whitepaper, ‘Understanding business models,’ introduces readers to business models.

This whitepaper contributes to enhancing the understanding of business models, in particular the conceptualisation of business models by discussing and integrating business model definitions, frameworks and archetypes from different disciplines. After reading this whitepaper, the reader will have a well-developed understanding about what business models are and how the concept is sometimes interpreted and used in different ways. It will help the reader in assessing their own understanding of business models and that and of others. This will contribute to a better and more beneficial use of business models, an increase in shared understanding, and making it easier to work with business model techniques and tools.

See here for more information.

A business model approach for moving tele-monitoring and tele-treatment from promise to practice

The availability of new information and communication technologies creates opportunities for new, mobile tele-health services. While many promising tele-health projects deliver working R&D prototypes, they often do not result in actual deployment. We aim to identify critical issues than can increase our understanding and enhance the viability of the mobile tele-health services beyond the R&D phase by developing a business model. The present study describes the systematic development and evaluation of a service-oriented business model for tele-monitoring and -treatment of chronic lower back pain patients based on a mobile technology prototype. We address challenges of multi-sector collaboration and disruptive innovation.

See here for more information.

Business model frameworks

How familiar are you with different business model frameworks? What framework will suit your needs best?

Selecting the right framework may depend upon, amongst others, the purpose (e.g. communication, brainstorming, business plan, system development), the setting (e.g. start-up or established company, organization or network, social or technical) and the type of support required (e.g. modelling language, visualisation, templates, tool support, etc.).

Below you find a list of some of the more well-known and published frameworks:

• The Business Model Canvas (Osterwalder & Pigneur)
• The Four-Box Business Model (Johnson)
• The STOF model (Bouwman, De Vos & Haaker)
• Business Model Schematics (Weill & Vitale)
• Technology/market mediation (Chesbrough & Rosenbloom)
• Entrepreneur’s business model (Morris, Schindehutte & Allen)
• e3-value (Gordijn & Akkerman)

For a more detailed description and discussion see the whitepaper ‘Understanding business models.'.

A business model definition

A business model describes the value logic of an organization in terms of how it creates and captures customer value (Fielt, 2011).

The definition is related to Osterwalder and Pigneur (2010), but with 'customer' value and without 'delivering' value. The definition is well aligned with Chesbrough (2006), Johnson (2010), and Teece (2010).

While most authors are not very explicit about what they mean with value, most definitions seem to refer to mean 'customer value' (i.e. value for the customer). We excluded 'delivering' value from the definition as we see delivering value as part of creating value. Customer value implies use value, which cannot be created without being delivered.

We see the identification of the different elements of a business model, such as the value proposition, resources or revenues, not as part of the business model definition, but as part of the business model framework. A framework operationalizes the definition and makes it more concrete and specific. This creates some flexibility as there can be multiple, different specific frameworks while adhering to a single, generic definition. This caters for the use of the concept for multiple purposes and in different contexts, and the development of the concept over time.

While the business model has a specific organization as its focus, we want to make explicit that often this focal organization operates in an organizational network and that the organizational network can play a prominent role in creating and capturing value. If this is the case then the network will be included in the business model. However, the network will still be from the perspective of the focal organization.

An organization can have multiple business models, either in time (sequentially) or at the same time (simultaneously). While outside the scope of the current discussion, this requires understanding of synergies and conflicts between business models and creates a need for business model portfolio management and business model lifecycle management.

We also leave open the possibility that the organization is a profit or non-profit organization. Capturing value will often be about financial revenue models that contribute to the monetary bottom-line of the organization. However, we do not want to exclude a broader perspective than profitability including also social responsibility and environmental sustainability.

See the 'Understanding business models' whitepaper (pdf here) for more information.

References

Chesbrough, H. (2006). Open business models: How to thrive in the new innovation landscape. Boston, MA: Harvard Business School Press.
Fielt, E. (2011). Understanding business models (Business Service Management whitepaper volume 3). Brisbane, Australia: Smart Services CRC. Available via: http://eprints.qut.edu.au/41609/
Johnson, M. W. (2010). Seizing the white space: Business model innovation for growth and renewal. Boston, MA: Harvard Business Press.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers: (self-published).
Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning, 43(2-3), 172-194.

Alternative Business Model Canvas templates – The two-sided business model

I have been exploring the use of the BMG Business Model Canvas and possible alternative canvas templates that do not change the core concepts or the language of Business Model Generation (BMG) (Osterwalder and Pigneur, 2010). A first experiment with respect to co-creation can he found here and a second experiment with (service) bundling can be found here.

One of the patterns in the BMG book is the multi-sided platform, The core idea is that there are distinct types of customers, e.g. eBay has buyers and sellers. Note that this should not be confused with differentiating between different customer segments. Because the value proposition, channels, relationships and customer segments can be quite different per group, it may sometimes be useful to use a canvas that more explicitly differentiated between different groups. This is most easily for two-sided markets (a specific type of multi-sided platform), like eBay, where there will be two different customers groups. Two examples of an alternative canvas templates are provided below.




See here for more information on different approaches to business models.

What do we mean with business model?

While the growing attention for business models and business model innovation is a positive development, it also stresses the need for better understanding what we mean with the business model concept. This is not straight-forward as business models are still not well comprehended and the knowledge about business models is fragmented over different disciplines, such as information systems, strategy, innovation, and entrepreneurship. We need to further develop our conceptualisation of business models by discussing and synthesising business model definitions, frameworks and archetypes from different disciplines.

I tried to contribute to this development by the whitepaper ‘Understanding business models.' After reading this whitepaper, the reader will have a well-developed understanding about what business models are and how the concept is sometimes interpreted and used in different ways. It will help the reader in assessing their own understanding of business models and that and of others. This will contribute to a better and more beneficial use of business models, an increase in shared understanding, and making it easier to work with business model techniques and tools.