A business model is a concise and distinct way of picturing the way in which a business operates. It should be possible for the management to describe their business model in a few sentences. It is the aim of every company to provide their customers with value. The stronger the value they provide, especially if compared with their competitors, the more probable it is that the company would have a large number of people purchasing from them. The business model is just a mean of translating the value proposition provided to customers into a potential for swift revenue growth. All the processes and policies of the business are a part of the business model. According to management expert, Peter Drucker (2017) a business model provides answers to the following questions: Who is the customer? What does the customer value? How value is delivered at an appropriate cost?
With research streams contributing extensively to the business model concept, the stream that has contributed the greatest attention to business models is e-business. E-business implies doing business electronically. It contains of e-markets, internet-based business, and e-commerce. It takes into consideration hose business that are carried out exclusively over the internet as a form of business that makes use of the potential present in the internet as a form of complement to a business’s existing operations. Only those business that are into commercial transactions with their customers and business partners are considered as e-businesses, not counting those who just use websites for displaying their products and services that they are selling in the physical world. The recent advancements in communication and information techniques, like the advent and rapid development of the web and the swift degeneration in the communication and computing costs, have made it possible for the development of new and innovative ways of creating and delivering value, which have provided scope for the generation of traditional exchange mechanism and transaction architectures (Fielt, 2013).
The overall aim of the business model of a focal firm is exploiting any business opportunity in creating value for the involved parties. This aim is reflected in the consumer value proposition and is characterized as a value creating insight that turns any firm. In these type of firms an activity in a business model is regarded as human engagement, physical and/or material assets of any of the party to the business model, for serving any particular purpose for the fulfillment of the whole objective. An activity system is therefore a set of codependent organizational activities focused on the firm, comprising those carried out by the firm, their partners, suppliers or consumers (Amit & Zott, 2012).
In analyzing business models in terms of cost/revenue architecture, they can be addressed in the domains of innovation and technology management. Two complimentary views dominate the domain: companies commercialize the new ideas and technologies with the help of their business models, and business models signify a new aspect of innovation that covers the conventional modes of procedure, product and structural innovation and even includes new forms of collaboration and cooperation. Business models not just entails outcomes for technological innovations, they even get shaped by them. Other than adopting business models for facilitating technological innovation and management of technology, businesses also can consider the business model as an origin of innovation in and of itself (Iacob et al., 2014).
Exploring the seven components inside business model, scope, goal, key resources, key activities, value proposition, customer channels and customer relationship, resulted in a thorough assessment on how the sensing, seizing and transforming competences of the firm can be made use of for bringing dynamism to every component and even to the whole organization’s business model. An evaluation of the practical circumstances of corporations would show that there exists interconnectivity and mutual dependence inside those organizations of the components of the business model, along with some possibly iterative and linear relationships. Some of the components are capable of fostering dynamism, others are capable of impeding dynamism. It has been seen that organizations always focus on only some aspects of their business model, putting in the maximum energy, resources and time in those aspects. These aspects more often than not result in either dynamism or even initiate dynamism in some other aspects of the business model. Pursuit of dynamism in organizations in one aspect often goes on to the initiation of dynamism in several other aspects. There is the existence of multiple business models at both the whole organizational level and even at the distinctive business unit level (Schneider & Spieth, 2013).
A business context is a type of context where a particular vocabulary is engaged. This might be an individual organization, a specific project, or a larger business community. The business context decides the scope for gathering and agreement of requirements. Clearing out the shared purpose is important for attaining working interoperability. All the other subsequent needs gathering and interoperability design ought to be concentrated on the satisfaction of the shared purpose inside the capacity of the business context, even though a separation of functionality might be selected for achieving incremental progress (Bratton & Gold, 2012). In today’s organizations, change is inevitable. Organizations are facing today a dynamic and changing environment. To survive in today’s global economy, organizations need to be flexible and readily adapt to the ever-changing marketplace. Change has turned out be the norm. It is as important for organizations in paying attention to the social and psychological aspects of change as they do to the other technological aspects. Driven by the factors inside the business itself, like wishing for reposition of the business in the market or for implementing a new business model or for merging with another business or for expanding into a fresh market, change happens. External factors like demographic changes, market rivalry, new government regulations and disruptive technologies drive change (Cummings & Worley, 2014).
In case of big data and analytics, the shift from hype to action has been enabled by the rise in offerings around analytics in the cloud. This approach has allowed organizations in focusing on their core business, initiate faster innovation, achieving quick wins and reduce risks, irrespective of whether it is software as a service or hosted solution (Chaston, 2015). A good example of an Australian company that has started addressing this trend is RightShip. RightShip, a Melbourne based third party ship vetting agency has redeveloped their online ship vetting information system (SVIS) with the help of business analytics software from IBM. RightShip is using the Softlayer cloud platform for managing and analysing the data that will be generated by the IBM analytics software, which in turn would allow the company to focus on the core business of offering risk and vetting help for the maritime industry. With the help of predictive analytics and reporting, SVIS 2.0 is planned for providing RightShip customers admittance to information like inspection records and ship ownership details. This has allowed customers to perform proper risk forecasting on nominated vessels (RightShip, 2017).
At RightShip, the SVIS 2.0 system is available through the company’s website and it holds data regarding approximately 71,000 ships and thousands of maritime companies. With the collaboration with IBM and getting access to their business analytics technology, RightShip has realized the benefit of Big Data in delivering the most urbane, enterprise-ready risk management system accessible to the marine industry through an upgrading to its Ship Vetting Information System (SVIS™). SVIS is an industry standard and it cannot be altered without any consultation and change management processes. RightShip is a business-to-business tool and from their usage analytics they have seen that there is a greater use of mobile. The new system allowed RightShip to execute better and target inferior performance and estimate risk animatedly as a reply to altering factors. Design firm Reactive has been hired by them has been given the task of redesigning the website for mobile devices. They moved into a HTML 5 front end so that they have to rec-factor code for supporting the latest user interface. Dubbed SVIS 2.0™, the system would be leveraging IBM’s advanced predictive analytics and real-time reporting for providing customers with instant access to a wealth of information and permit the in undertaking extremely accurate risk forecasting (Nabi, 2016).
On a concluding note, developing the understanding of business model as a concept, and grasping their theoretical underlining are useful in explaining value creation, value appropriation and the innovation process at firms in real-life. Among the business model concepts, three warrant some amount of discretion, (1) e-business model archetypes, (2) business model as activity system, and (3) business model as cost/revenue architecture. These three come under the umbrella theme of business model and suggest there are possibly a number of ways in which a problem can be approached to effectively analyze a business model, design or redesign it. The discussion also suggested that the concept of business model, in consideration of real problems, needs approaching with a particular business context in mind and find out how much change is inevitable
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