Discuss about the Business Model Innovation and Business Concept.
The concept of the business model is known as the value that is offered by an organization to its consumers, to the firm’s architecture with this to the partner’s network for marketing, creating and delivering such value in order for generating the sustainable and the profitable streams of revenue. The business model concept also includes the description of how to make a profit and the way in which business performs (Holgado, Macchi and Fumagalli, 2015). The management quality is an important solution because this determines the business model success through the capabilities, acquiring the ability, utilizing and combining the valuable resources in the way to deliver the valuable proposition to the consumers. It was the Allen and the Schindehutte who designed the framework for defining the core competencies of the business model from the perspective of an entrepreneur (Holgado, Macchi and Fumagalli, 2015).
According to the literature, there is a different perspective on the business model; it is believed by some authors, the business models as the holistic description that how a company performs the business and the other articulates how the business model in the company will convert the capabilities and the resources into the economic value (Holgado, Macchi and Fumagalli, 2015). Hence, the business model is the financial and the organizational architecture of the business which also includes the implicit assumptions related to the consumer behavior and needs of cost, revenue, and competition.
It is argued that the business model arranges the execution of the conceptual strategy and also the strategies alignment for the business processes. Business model helps in providing the logical insight about the procedures and the measures that the company uses for creating value for its consumers. The business model strategies help the managers of an organization by providing them with the deep analysis of the processes related to the business (Clemons et al., 2013). Such processes are implied by the organization for ordering the work and to observe the working activities in a systematic manner.
In scheming the business models, the managers of the organization opt for some of the latest advances related to the communication and the information technologies. This processing of the business models contributes to shifting in the emplacement of the aggressive advantage from the innovative endeavor and internal stakeholders such as the shareholders, management, and the employees to the business ecosystem; this also includes the exterior stakeholders who are the partners, customers, and vendors (Giessmann and Legner, 2016). Certainly, progress in the digital technologies opened the new opportunities related to the plan of exchanging boundary-spanning relationships among the partners, customers, and firms. This also resulted in the business to become the possible sources for the creation of the value (Giessmann and Legner, 2016).
The business model is the process which results in illustrating the structure, content, and supremacy of transactions planned to generate value through the exploitation of business opportunities. The content of the transactions refers to the information or the goods with the aim of getting exchanged, and to the capabilities and resources that are obligatory for facilitating the exchange (Kuk and Janssen, 2012). In the business model transaction structure refers to the parties which are participating in the exchange and that participate in the exchange and the conduct through which the parties are linked and includes the exchanges sequencing and the adopted mechanisms of exchange (Kuk and Janssen, 2012). Transaction governance in the conceptualization of the business model attributes the ways in which flows of information, resources, and goods are restricted by the pertinent parties and includes the organization legal form and the exchange participant’s incentives (Kuk and Janssen, 2012).
Hence, the conceptualization related to the business model encloses the efficiency of the transaction, originality in the content of transaction, governance and structure complementariness among the capabilities, resources and network effects (Kurovs and Wa?ci?ski, 2016). The business model conceptualization also helps to integrate the vital strategic and the entrepreneurship theories, and consequently potentially heightens one’s understanding towards the complex mechanics and processes that resulted in the creation of the wealth.
The projected construct in the business model is economical, different from the competitive business-level strategies and can be measured and operational. Test and develop the hypotheses related to the collision of the production model design on the creation of wealth by the entrepreneurial firms (Kurovs and Wa?ci?ski, 2016). The satisfied examination of the firm’s prospectuses clears that the business model with the novelty-centered design matter in a great way to the value of equity created by such firms (Kuk and Janssen, 2012). This also results in the probable discrepancy effect of the themes of the business model design under the different resources of philanthropy regimes, and also potentially diseconomies the design scope. Consequently, the business model holds the promise for advancing the research in an organization in both ways either empirically and theoretically (Ziukov, 2015).
The business model in a fair way is recognized to deliver the environmental and the social sustainability in the business world. The sustainable business development helps in the creation of the competitive advantage by providing the superior services to the consumers and also by contributing to the sustainable development of the society and the company. Business models for resolving the dynamic and the static issues contribute to the typology of defensive, proactive and accommodating, business model (Kurovs and Wa?ci?ski, 2016). The defensive strategies in the business model adjusts to protect the present business model by focusing on the cost and the risk reduction which is often driven by the compliance need; accommodating strategies of integration and improvement are the changes in the internal processes and also includes the deliberation of the social and environmental, whereas the practical strategies concerns the spruce up of the foundation business logic for the sustainable development (Kurovs and Wa?ci?ski, 2016).
The business model is such a conceptualized system that consists of the components, correlation between the dynamics and components. The factors related to the business model are the customer segments, customer value, services and product scope, revenue sources, pricing, implementation, connected activities, sustainability, and capabilities. Similarly, the business model is facilitated as the construct that is a mediator between economic outputs and technological inputs (Seppanen and Makinen, 2007). The business model functions are to be articulated in the proposition of the value, identifying the market with the mechanism of the revenue generation for the firm; defining the value chain structure; estimating the profit potential and the cost structure; describing the firm position within the network of the consumers, suppliers, competitors, compliments and for formulating the Competitive strategy (Seppanen and Makinen, 2007).
The experimental research on the business model measurement designs planned to detain all the lines of a company’s business that have revenue potential holds great promise to enhance our understanding of business models (Souto, 2015). Exploring the business model dynamic evolution, how they are shaped, emerged and adapted with the passage of time, with this also evolving the business model organization design and strategies that reflects the significant research program substantially solidifying the business model as an analysis for understanding the creation of the wealth.
Innovation in the business process significantly created the positive impact with the reduction of the negative impact on the society and the environment. The changes which the companies and the value network create capture and deliver value that is to create the economic value or changing the propositions value (Souto, 2015). The categorizations that are based on the innovation processes proves to be effective to understand the underlying mechanism with the innovations in the business models that leads to the preliminary classifications of the services, products, network, processes and the social innovation (Souto, 2015).
To decide about the partners in the organization it is significant to sure that for both the parties the models of the business is complementary. It is vital for identifying the potential value drivers for the partners by analyzing the concerned business models and if this is beneficial for finding the firm’s partners that help in understanding the major aspects of the company’s business model (Weiblen, 2016).
The largest or the vital constituent of the framework is related to the value creation. The company Starbucks is creating the unique value through the interactive service and the immense consumer experiences. The company is utilizing the technology in a good way with the extreme use of the internet capabilities, marketing, social network and many other innovative processes which speed up the company sale with the increasing orders and payments (Clemons et al., 2013). The other competitive advantageous of the company is based on the specialized expertise and skills and the valuable alliances. The organization Starbucks is having such sets of skills which introduce and creates the innovative products in the market. Such skills give the company a competitive advantage in the market and to become the innovative leader and are essential for the company to differ itself from its rivals in the coffee industry (Clemons et al., 2013). The organization is having a plentiful liberated cash flow and the physical assets for driving and funding the strategic initiatives.
References
Clemons, E., Hedman, J., Sarker, S. and Veit, D. (2013). Information Systems Journal Special Issue on the ‘Digitisation in business models and entrepreneurship’. Information Systems Journal, 23(3), pp.277-279.
Giessmann, A. and Legner, C. (2016). Designing business models for cloud platforms. Information Systems Journal, 26(5), pp.551-579.
Holgado, M., Macchi, M. and Fumagalli, L. (2015). Maintenance business model: a concept for driving performance improvement. International Journal of Strategic Engineering Asset Management, 2(2), p.159.
Kuk, G. and Janssen, M. (2012). Assembling infrastructures and business models for service design and innovation. Information Systems Journal, 23(5), pp.445-469.
Kurovs, J. and Wa?ci?ski, T. (2016). The Concept of Social Responsibility in the Business Model of a Company. Foundations of Management, 8(1).
Seppanen, M. and Makinen, S. (2007). Towards a classification of resources for the business model concept. International Journal of Management Concepts and Philosophy, 2(4), p.389.
Souto, J. (2015). Business model innovation and business concept innovation as the context of incremental innovation and radical innovation. Tourism Management, 51, pp.142-155.
Weiblen, T. (2016). The Open Business Model: Understanding an Emerging Concept. Journal of Multi Business Model Innovation and Technology, 2(1), pp.35-66.
Ziukov, S. (2015). A literature review on models of inventory management under uncertainty. Business Systems & Economics, 5(1), p.26.
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