Business Model Silvia Rita Sedita silvia seditaunipd it

Business Model Silvia Rita Sedita silvia. sedita@unipd. it

Definition • A business model describes the rationale of how an organization creates, delivers, and captures value – A business model is a conceptual tool containing a set of objects, concepts and their relationships with the objective to express the business logic of a specific firm. • Therefore we must consider which concepts and relationships allow a simplified description and representation of what value is provided to customers, how this is done and with which financial consequences.

The origin of the concept Search criteria: titles, abstracts, keywords, full texts of all articles in the Business Source Premier database of scholarly business journals for the word string "business model". The search included several variations of the original term like "e-business model", "new business model" or "Internet business model". the popularity of the term "business model“ is a relatively young phenomenon Source: Ostenwalder A. , Pigneur Y. , Tucci C. L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1 -40

Business model and technology “Part of the relationship between technology and business models stems from the business model concept’s roots in transaction cost economics (TCE). The sharp rise in cheap information technology, bandwidth, and communication possibilities made it much easier for companies to work in so-called value webs because coordination and transaction costs fell substantially [Tapscott, Ticoll et al. 2000; Amit and Zott, 2001)” the number of times the term "business model" appeared in a business journal (peer-reviewed and non-peer reviewed) follows a pattern that resembles the shape of the NASDAQ market index. Figure 1. Occurrences of the Term "Business Model" Compared to NASDAQ Fluctuations Source: Ostenwalder A. , Pigneur Y. , Tucci C. L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1 -40

The Business Triangle “we understand the business model as a building plan that allows designing and realizing the business structure and systems that constitute the operational and physical form the company will take. We call this relation between strategy, organization, and systems the business triangle that is constantly subject to external pressures, like competitive forces, social change, technological change, customer opinion and legal environment” Source: Ostenwalder A. , Pigneur Y. , Tucci C. L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1 -40

The business model canvas A shared visual language to sketch out existing or new business models http: //www. youtube. com/watch? v=Qo. AOz. MTLP 5 s&feature=player_detailpage

The 9 building blocks - 0

The 9 building blocks - 1 • • • Mass market Niche market Segmented Diversified Multi-sided platforms …

Mass market

Segmented…enough?

Segmented - customized

Niche market

Diversified B 2 C B 2 B

Multi-sided platforms -1/2

Multi-sided platforms - 2/2

The 9 building blocks - 2 • • Newness Performance Customization Design Brand/Status Price Accessibility …

The 9 building blocks - 3 • Own Channels • Direct • in house sales force • web sales • Indirect • own stores • Partner Channels • Indirect • partner stores • Wholesalers • Web sites

The 9 building blocks - 4 • • • Personal assistance Dedicated personal assistance Self-service Automated services Communities Co-creation

The 9 building blocks - 5 • • Asset sale Usage fee Subscription fee Lending/renting/leasing Licensing Brokerage fees Advertising

The 9 building blocks - 6 • Key resources – Physical – Intellectual – Human – Financial

The 9 building blocks - 7 • Production • Problem solving • Platform/network

The 9 building blocks - 8 • Why? • Economy of scale • Risk reduction • Access to critical resources

The 9 building blocks - 9 • Cost structure – Cost-driven – Value-driven • Characteristics – Fixed costs – Variable costs – Economies of scale – Economies of scope