Innovation And Sustainable Development For Dynamic Problems

Concept and Frameworks of Business Model

Discuss about the Innovation and Sustainable Development for Dynamic Problems.

The aim of the following essay is to make a profound evaluation of varied concept and frameworks of business model and its effectiveness in solving static and dynamic problems, understanding the need for strategic alliance as well as the procedure of business innovation. The objective is therefore to unfold the varied roles a business model performs for a particular organization. In order to address the aforementioned purpose of the essay, the present paper would evaluate some of the key perspectives shown in three particular articles regarding business model and numerous significant aspects related to it.

The fundamental concept of business model says that business model is a coherent and concise way of drawing the functions of a business. In other words, the role of a business model is to utilize the opportunities of a business organization properly by the way of generating value for each of the involved stakeholders of an organization (Itami & Nishino, 2010). Therefore, it is understandable that by the way of designing, creating and implementing a particular business model, a business firm addresses and fulfills the needs of its target market as well as establish customer surplus along with meeting expected profit margin. On the other hand, it has been also understood that a business model is an integration of a profit model and a particular business system. A business model plays the role of a system of works that includes production and delivery system (Lanzolla & Markides, 2015). Henceforth, it is designed by an organization both within and beyond of the enterprise’s individual boundaries for having a smooth delivery of products or services.

From the aforementioned concepts of business model, it can be said that design of a specific business model of an organization is determined by the individual goal and objectives of a business organization. Therefore, it can be also put forward that there could not be one particular business model as different business organizations procure different business model based on their business objectives (Zott & Amit, 2010). Nevertheless, it is to say that in time of conceptualizing business model as system of business, elements those are necessary for integration are value proposition, economic dimension of an organization, target market or customer type and the structure of an organization. Therefore, understandably, components belonging to profit margin and business system are required. It is necessary to keep in mind that one of the fundamental aims of business model is to generate value for business partners and to produce high profit by fruitfully attaining customer needs (Morris et al., 2015). Henceforth, it is understandable that the most essential aspects which are essential to consider in time of conceptualizing a perfect model for business are a set of strategies or activities for making profit and successfully delivering service to the target market. Further, it is to add that proposed value for each stakeholder, corporate governance and investments are also taken into consideration when conceptualizing a business model.

Addressing Static and Dynamic Issues through Business Model

However, it is interesting to denote in this respect that business models are responsible for addressing static as well as dynamic issues. Dynamic issues of a business organization are meant to be the problems related to the dynamic aspects like market, customer and supplier’s demand and bargaining power (DaSilva & Trkman, 2014). On the other hand, in terms of static issues, an organization may face issues in the field of organizational structure, culture and internal stakeholders. It is therefore indicative of the fact that an organization’s both static and dynamic aspects are interrelated with the organization’s business model. Business model essentially integrates a set of activities for creating values for stakeholders and at the same time for generating profits, which mean both static and dynamic facets are considered in time of conceptualizing the model (Carayannis et al., 2015). Hence, it can be asserted that an organization individual business model and its static and dynamic business aspects are interrelated. Thus, without the use of business model, it is difficult to solve static or dynamic issues. For example, if an organization suddenly encounters emergence of an organization in the same field, it would attempt make change in its marketing, production, and product modification and customer satisfaction strategies. It means the organization would particular bring significant change or modification in its business model (Kindström & Kowalkowski, 2014).

On the other hand, business models are used for understanding the needs of business strategic alliances. It has been mentioned above that a business model as a system looks forward to generate profit and create value for stakeholders. A profit model, which is one of the essential elements of a business model, is an aspect of strategic intents of an organization (Zott & Amit, 2010). On the other hand, the need for business partnership or strategic alliance in an organization are supposed to be dividing risks of business or minimizing its impact, enhancing competitiveness, generating new trends and penetrating into a foreign market. It can be thus articulated that business models helps an organization in understanding the needs of individual strategic intents. Each of the above mentioned reasons for making business partnership or strategic alliance involves similar components, which the business models fundamentally owns (Bonakdar, 2015).

Most significantly, the relationship between business innovation and business model could not be ignored. Business organizations generally look forward to bring innovative idea in a business, when they encounter issues in business operations and in the profit acquisition. Moreover, an idea for business innovation is implemented through business models. As per business models focus on the strategic intents of an organization, performances level of the business models indicate and determine whether an organization is in need of modifying its business system and process or not (Lambert & Davidson, 2013). Understandably, through the utilization and performance of a business model, an organization understands the particular ways of implementing the business innovation tactics. At the same time, the performance of the business model indicates whether the procedures of innovation are working as per the estimated outcomes or not.

Understanding the Needs of Business Strategic Alliances through Business Model

From the articles of Kodama (2009), Zott and Amit (2010), and Itami and Nishino (2010) it has been understood that types of business model vary upon individual business objectives, strategic goals and business structure. More precisely, from the article – “Business Model Design: An Activity System Perspective” by Christoph Zott and Raphael Amit, it has been found that business models are designed based on individual business activity systems, which are characterized by varied business themes. The authors have asserted that business models designs are determined by novelty centered activity system, lock in based activity system, complementarities and efficiency based activity systems. On the other side, in “Killing Two Birds with One Stone”, the authors – Hiroyuki Itami and Kazumi Nishino have focused on the efficiency of the basic business model, that is integrated through the profit model and the systems of business. The aforementioned authors have claimed that for a business model, the profit model should be considered as the most crucial element in a business model though the authors have mentioned it too that without the accompaniment of business system, accomplishment of profit model is not possible.

However, the most interesting article has been found to be Mitsuru Kodama’s “Boundaries Innovation and Knowledge Integration in the Japanese Firm” as the author has focused on the innovative and different business models of Japanese business sector. It has been understood from the article that in the Japanese organizations, creativity and technology are given priority for building corporate level dominance, which they believe is an essential part of the business model (Kodama, 2009). However, the author has initially concentrated on the theoretical business model framework of knowledge integration model, which is integrated by the heterogeneous data inside and outside an organization. These knowledge are derived from the dynamic changes those take place in both horizontal and vertical organizational boundaries. The vertical side of the model is used highly in the Japanese business firms, which launch new products or new business models. The article has been considered most interesting as it has established a new understanding regarding the importance and varied criterion for designing business models (Kodama, 2009).

Finally, it is to conclude that from the above discourse it is understandable that business model works as a multi performer as it serves for solving static and dynamic issues, need for strategic alliance and the need and process of business innovation. The findings will help in future to understand how business models can be modified or utilized for varied issues in an organization.

Reference

Bonakdar, A. (2015). Business model innovation (Doctoral dissertation, University of St. Gallen).

Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever oforganizational sustainability.The Journal of Technology Transfer   , 40 (1), 85-104.

DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long range planning, 47(6), 379-389.

Itami, H., & Nishino, K. (2010). Killing two birds with one stone: profit for now and learning for the future. Long Range Planning, 43(2), 364-369.

Kindström, D., & Kowalkowski, C. (2014). Service innovation in product-centric firms: A multidimensional business model perspective. Journal of Business & Industrial Marketing, 29(2), 96-111.

Kodama, M. (2009). Boundaries innovation and knowledge integration in the Japanese firm. Long Range Planning, 42(4), 463-494.

Lambert, S. C., & Davidson, R. A. (2013). Applications of the business model in studies of enterprise success, innovation and classification: An analysis of empirical research from 1996 to 2010. European Management Journal, 31(6), 668-681.              

Lanzolla, G., & Markides, C. (2015). Does the strategy field need the business model concept. London Business School Working Paper No. LBS SE WP 22.

Morris, M., Schindehutte, M., Richardson, J., & Allen, J. (2015). Is the business model a useful strategic concept? Conceptual, theoretical, and empirical insights. Journal of Small Business Strategy, 17(1), 27-50.

Zott, C., & Amit, R. (2010). Business model design: an activity system perspective. Long range planning, 43(2), 216-226.