Develop your understanding of the Business Model as a Concept and how a theoretical understanding of business models can be used to explain value creation, value appropriation and/or the innovation process at firms in real-life.
The aim of the topic is to discuss the concepts of the Business model such as e- business model archetypes, business model as an activity system and Business model as cost/revenue architecture. These concepts are being utilized by the company to address any kinds of static problems taking place in the working circle of the organization (DaSilva & Trkman, 2014). There are numerous ways which can be taken into consideration while making an approach to the problems through the use of an effective model of a business. Therefore, the importance of the company business model should be taken into account in order to approach the problems and changes that have been brought to an organization by following a better business model.
The business model provides a clearer concept about how the company is running and how it is operating. The Management team would be able to discuss to the employees that how an organization manages to create deliver and capture the value. A business model consists of the nine building basic blocks and they are (Amit & Zott, 2012; Wirtz et al., 2016).
For whom the company is creating a value? Who are the most important customers?What are the values that are being delivered to the customers? Which are the problems of the customers that are being needed to solve? Who are the customers who need are being satisfied by the company? What are the important bundles of services and products are being offered to each segment of the customer? Which are the channels are needed to be taken into consideration to reach the customer segments? How the company is approaching them? How the integration of these channels happen? (Amit & Zott, 2012; Schaltegger, Lüdeke & Hansen, 2012).
The meaning of the term e business indicates the means of doing business automatically. It includes e-markets, e-commerce and the business supported by the internet. The recent advances in the field of communication and technologies for example the entry of the swift internet process and at the same time a rapid decline is being predicted in the communication and computing costs. This entire change has given a new change to the forms of the organization (Zott, Amit & Massa, 2011).
Several scholars have made an attempt to make a classification of e-business through the description of their types. E-business is actually an area for research about the models of business and the roles that firms function in their own ecosystems. To address this, the scholars framed out different business models, also developed the taxonomies and typologies. The scholars have appeared to be less concerned about the empirical based testing. Their contribution to descriptive analyzation varied degree (Zott, Amit & Massa, 2011).The notion of value incorporates customer value, value system and proposition of value. The financial aspects include cost structures and revenue streams and also the aspects which are related to the architecture of the network exist between the partners of exchange and their firms. As for example Internet, logistic streams, infrastructure and delivery channels. The antecedents of business model of e commerce are New information and communication technologies (Zott, Amit & Massa, 2011).
The activity system is considered to be a set of organizational activities which are interdependent and they are centered around the focal firm, which includes those which are conducted by the focal firms, their partners, customers, vendors and many others (Zott, Amit & Massa, 2011; Wirtz et al., 2016). While explaining the creation of value, the business model’s concept has been used from the perspective of the digital economy. The business in order to survive the age of revolution companies tends to develop the innovative business models which incorporate the partners, channels of distributions. The antecedents of business models include unique propositions of value, the process of distribution of the bargaining power (Zott, Amit & Massa, 2011).
Cost revenue Architecture: Revenue Architecture to align with the business architecture for the sustainable predictable growth of revenue. It is important to align the go to market strategy with the model of business.
Important to enable the sales to integrate channels, people and process (Baden & Haefliger, 2013).Engagement programs’ buyer across the sales and marketing. It is also important to understand the process the technology is converted into the outcomes of market. It is important to understand the new modes of innovative technologies and the mechanism can be built by connecting the customers with the technologies. This mechanism is giving power to firm to commercialize the innovations of technology (Zott, Amit & Massa, 2011; Wirtz et al., 2016).
The three concepts of these emerging themes of the business model, they are the concepts based on system levels which are surrounded by the activities which are more or less focused on the value which act as catalysts to focus on the study of the models of business. The more researches are needed to be done to study the models of business so that these concepts can be developed when the scholars would feel to throw light on the conceptual differences from the other similar concepts which includes the activity systems, ecosystems or the value networks (Zott, Amit & Massa, 2011). However these concepts are interrelated and this would be further used for redesigning the models of business.
Meaning of business context means where the vocabulary which are specialized in nature are employed and this includes an individual organization, a community of a larger business or particular projects (Beringe & Tarlin,2012). It also frames out the needs and agreements. The needs and the capability of the design must focus on the purposes in the context of business (Zott, Amit & Massa, 2011; Wirtz et al., 2016).
The change is an inevitable concept. The organization or the companies go through the phases of change. The change in organization happens when the strategies of business or the major parts of any organization are changed. This term is also known by the name restructuring, reorganization or the turnarounds (Ben, Dunphy & Griffiths, 2014). For example: The Germany Diary Sector faced significant changes. The number of the farmers and also the processors of diaries have gone down in the last few years. Due to the coming of the powerful agents at the steps of the diary industry, the strategic interactions waged along with the value chain have become significant (Chen, Chinag & Storey, 2012). With the increase of the retailer’s buying power in the recent years raised concerns. There are no existences of the workhouse model where there is no imperfect competition. The gap would be closed by developing a model that allows the industry to wage negotiations between the retailers, farmers and food processors. The business model would be framed in such a way that the project of the research is divided into the two work packages which would determine the two issues and try to solve them in the value chains of agriculture. In the first work package, if the products are conventional as well as strategic, the bargaining position between the retailers can get softened. It also focuses on the model of econometric and the development of the market structure at the level of processor. It is known as empirical business model (Chen, Chinag & Storey, 2012; Glover et al., 2014).
In the second work package, the competition between the forms of organization is known as cooperatives and the firms which are not profit at the level of processor. It is here important to understand the differences in the ownership which might affect the outcomes of the negotiations in the vertical relations (Glover et al., 2014). The business model would impact the performances of the model which would combine the work packages and help them to develop accordingly.
This in turn impacted the organization by going through the changes of value analysis, the change in the internal module has become relevant with the fact that it might impact the negotiations in the vertical relations as mentioned before. It is also the duty of the managers to go through this change of the business model and make the teams work on the decision changes of the organization. The managers needs to look through the further implementation of the new business model which would bring effectiveness in the working of the organization.
On a concluding note it could be stated that the business model would help to develop the business more systematically. The three concepts are needed to be utilized properly so that the researches are can frame out the model of business in a more systematic manner. Finally the notion of the change in inevitable and the company name German Diary industry must take note of new business model which should be rather taken into account in order to bring changes in the organization.
References
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41.
Baden-Fuller, C., & Haefliger, S. (2013). Business models and technological innovation. Long range planning, 46(6), 419-426.
Benn, S., Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate sustainability. Routledge.
Beringer, J., & Tarlin, E. (2012). “Business context data companion tool.” U.S. Patent No. 8,250,169. Washington, DC: U.S. Patent and Trademark Office.
Chen, H., Chiang, R. H., & Storey, V. C. (2012). Business intelligence and analytics: From big data to big impact. MIS quarterly, 36(4).
DaSilva, C. M., & Trkman, P. (2014). Business model: what it is and what it is not. Long range planning, 47(6), 379-389.
Glover, J. L., Champion, D., Daniels, K. J., & Dainty, A. J. D. (2014). An Institutional Theory perspective on sustainable practices across the dairy supply chain. International Journal of Production Economics, 152, 102-111.
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119.
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long Range Planning, 49(1), 36-54.
Zott, C., Amit, R., & Massa, L. (2011). The business model: recent developments and future research. Journal of management, 37(4), 1019-1042.
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