Is the Business Model a Useful Strategic Concept? Conceptual, Theoretical, and Empirical Insights
AbstractAlthough a widely used managerial concept, the notion of a "business model" has only recently begun to receive serious attention from researchers. While disparate opinions exist regarding its nature, the business model holds promise as a focal point for the development of theory in entrepreneurship. Realizing this promise requires progress not only in how to conceptualize the business model but, also, in how to measure a firm's model and draw comparisons across model types. Utilizing a six-component framework published earlier by the authors, a methodology for measuring the business model is demonstrated with a random sample of high-growth firms. Cluster analysis indicates the existence of four generic models. Suggestions are made and implications drawn for ongoing theory development and entrepreneurial practice.
Amit, R. & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22,493-520.
Barnes-Vieyra, P. & claycomb, C. (2001). Business-to-business e-commerce: Models and managerial decisions. Business Horizons, 44(3), 13-20.
Barney, J.B. (1999). How a firm's capabilities affect boundary decisions. Sloan Management Review, 40, 19-32.
Barney, J.B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120.
Barney, J., Wright, M., & Ketchen, D. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625-641.
Boulton, R.E.S., Libert, B.D., & Samek, S.M. (2000). A business model for the new economy. The Journal of Business Strategy, 21(4), 29-35.
Caine, D. & Robson, A. (1993). Models for decision making. Management Services, 37(1), 28.
Champion, D. (2001). Mastering the value chain. Harvard Business Review, 79(6), 108-115.
Chesbrough, H. & Rosenbloom, R.S. (2000). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation's technology spinoff companies. Harvard Business School working paper.
Christensen, C.M., Raynor, M., & Verlinden, M. (2001). Skate to where the money will be. Harvard Business Review, 79(10), 72-81.
DeNoble, A., Jung, D., & Ehrlich, S.B. (1999). Entrepreneurial self-efficacy: Relationship to entrepreneurial action.In P. Reynolds et al. (Eds.),Frontiers of Entrepreneurship Research, 73-87. Babson Park, MA: Babson College.
Dubosson-Torbay, M., Osterwalder, A., and Pigneur, Y. (2001). eBusiness model design, classification and measurements. Jhunderbird International Business Review, 44(1), 5-23.
Dyer, J. & Singh, H. (1998). The relational view: cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660-679.
Eisenhardt, K.M. & SuIl, D. (2001). Strategy as simple rules. Harvard Business Review, 79(1), 107-116.
Erikson, T. (2002). Entrepreneurial capital: the emerging venture's most important asset and competitive advantage. Journal of Business Venturing, 17(3), 275-290.
Everett, B. S. (1993). Cluster Analysis. London: Edward Arnold.
Glascoff, D.W. (2001). Beyond the hype: A taxonomy of e-health business models. Marketing Health Services, 21(1), 40.
Gulati, R. & Singh, H. (1998). The architecture of cooperation: managing coordination costs and appropriation concerns in alliances. Administrative Science Quarterly, 43(4), 781-814.
Hamel, G. (2000). Leading the revolution. Boston, MA: Harvard Business School Press.
Hamel, G. & Prahalad, C.K. (1994). Competing for the future. Boston, MA: Harvard University Press.
Hill, C.W.L. & Jones, G.R. (2001). Strategic management. Boston, MA: Houghton Mifflin Co.
Jain, B. A. (2001). Predictors of performance of venture capitalist-backed organizations. Journal of Business Research, 52(3), 223-233.
Jarillo, J.C. (1995). Strategic Networks: Creating the Borderless Organization. Oxford: Butterworth-Heinemann.
Jarillo, J.C. (1988). On strategic networks. Strategic Management Journal, 9(1), 31-42.
Kleindl, B. (2000). Competitive dynamics and new business models for SME's. Journal of Developmental Entrepreneurship, 5(1), 73-85.
Levy, M. (2001). E-volve-or-die.com. Indianapolis, IN: New Riders Publishing.
Linder, J.C. & Cantrell, S. (2001). Changing business models: surveying the landscape, Accenture Institute for Strategic Change Working Paper.
Mahadevan, B. (2000). Business models for internet-based e-commerce: An anatomy. California Management Review, 42(4), 55-69.
Man, T.W.Y., Lau, T. & Chan, K.F. (2002). The competitiveness of small and medium enterprises: A conceptualization of entrepreneurial competencies. Journal of Business Venturing, 17(2), 123-142.
Markides, C. (1999). A dynamic view of strategy. Sloan Management Review. 40(3), 55-63.
Markides, C. & Charitou, C. (2004). Competing with dual models: A contingency approach. Academy of Management Executive, 18(3), 22-31.
Mayo, M.C. & Brown, O.S. (1999). Building a competitive business model. Ivey Business Journal, 63(3), 18-23.
Milligan, G. W., & Cooper, M.C. (1985). An examination of procedures for determining the number of clusters in a data set. Psychometrika, 50(2), 159-79.
Mitchell, D.W., & Bruckner-Coles, C. (2004). Establishing a continuing business model innovation process. Journal of Business Strategy, 25(3), 39-50.
Morris, M.H., Schindehutte, M., & Alien, J. (2005). The entrepreneur's business model: Toward a unified perspective. Journal of Business Research, 58(6), 726-735.
Morris, M.H. & Schindehutte, M. (2001). Understanding strategic adaptation in small firms. International Journal of Entrepreneurial Behavior & Research, 7(3), 84-107.
Osterwalder, A. & Pigneur, Y. (2002). An ebusiness model ontology for modeling e-business. Proceedings of 15th Bled Electronic Commerce Conference, Bled, Slovenia, 1-12.
Petrovic, O., Kittl, C., & Teksten, R. (2001). Developing business models for eBusiness. Proceedings of the International Conference on Electronic Commerce, October 31-November 4, 2001, Vienna, Austria.
Picken, J.C. & Dess, G.G. (1998). Right strategy - wrong problem. Organizational Dynamics, 27(1), 35-49.
Pigneur, Y. (2000). The e-business model Handbook, HEC working paper, h Lausanne, Switzerland.
Porter, M.E. (1996). What is strategy? Harvard Business Review, 74(6), 61-78.
Porter, M. (1985). Competitive advantage. New York: Free Press.
Punji, G. & Stewart, D.W. (1983). Cluster analysis in marketing research: Review and suggestions for applications. Journal of Marketing Research, 17(2), 134-48.
Rappa, M. (2001). Business models on the web. Managing the Digital Enterprise, on-line guide, North Carolina State University, http://digi talenterprise.org/ index.html.
Shafer, S., Smith, H.J., & Linder, J. (2005). The power of business models. Business Horizons, 48(3), 199-207.
Slywotzky, A.J. (1996). Value migration. Boston, MA: Harvard Business Review Press.
Slywotzky, AJ., Morrison, DJ., & Andelman, R. (1997). The profit zone - How strategic business design will lead you to tomorrow's profits, New York: Random House.
Stewart, D.W. & Zhao, Q. (2000). Internet marketing, business models, and public policy. Journal of Public Policy & Marketing, 19(2), 287296.
Timmers, P. (1998). Business models for electronic markets. Electronic Commerce in Europe, 8(2), 1-6. www.electronicmarkets.org
Viscio, AJ. & Pasternack, B.A. (1996). Toward a new business model. Strategy+Business, second Quarter, http://www.strategybusiness.com/ press/article/?art= 14172&pg=0.
Voelpel, S.C., Leipold, M., & Tekie, E. (2005). The wheel of business model reinvention: How to reshape business models to leapfrog competitors. Journal of Change Management, 4(3), 259277.
Wernerfelt, B. (1984). A resource based view of the firm. Strategic Management Journal, 5(2), 171-180.
Wise, R. & Baumgartner, P. (1999). Go downstream: The new profit imperative in manufacturing. Harvard Business Review, 77(5), 133-142.
Zollo, M. & Winter, S.G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339-351.