has seen the emergence of new and more complex business models. Increasingly, multinational companies seek to maintain competitive advantage by out-sourcing,
a distributed business model where different value adding activities are carried out where they can be done most efficiently
and business models The emergence of‘Cloud computing'is a key enabler whereby computing resources and functions are centralised,
and the growing dominance of the internet experience reflected in radically altered business models. The games industry in particular is showing very healthy and rapid growth globally.
However, it is a business model that is continuing to grow as the range of activities and functions being centralised expands.
Gartner 2009 49 Gartner, 2009 SOUTH EAST EMPLOYMENT ACTION PLAN FORFÁS An Evolving Business model and Considerations for Ireland When BPO emerged as a sector originally in the 80s,
since shared services was identified first as a new business model for large corporations with a global footprint.
innovation in business process, business models, technologies etc. productivity enhancements, re-skilling and up-skilling. EI is proactively working with firms to identify
in particular the changing business models of customers (driven by new technologies, the Cloud, data processing capacity, social media etc. and mega-trends such as ageing, globalisation of financial services, carbon reduction,
if the socioeconomic scenario related to for example legal controls and development of administrative systems and business models should not be reorganized with sufficient speed.
which means‘houses made of natural materials'is a social enterprise that has a direct-linkage business model from forest to houses.
the direct-linkage business model from forest to houses While each team conducts its R&d activities dealing with the topic of forest management, wood processing, quality of houses and systems for woody houses
so that the social benefit of the direct-linkage business model from forest to houses is recognized widely
requiring knowledge and action to be developed across boundaries of culture, discipline, sector and business model. In defying hierarchy,
-network business models-business opportunities and models-service business opportunities EENNEERRGGYY mmaarrkkeettss PPOOWWEERR ssyysstteemmss--HHVV ppoowweerr ssyysstteemmss DISTRIBUTION TRANSMISSION38 GERMANY 39 DE:
75 vehicles in Milan and Brescia-Both are related to DSO business model. Infrastructure is owned by the DSO DISTRIBUTION 50 Latvia 51 LV:
new business models and electronic market places. Table 34 R&d Framework, Programmes & Policy documents in Germany R&d framework for research in smart grids?
and seek funding and sustainable new business models. This research has identified the goals of policy, the policy tools and funding instruments available
While massive commercial investment and business models fuelled the web's incredible growth, the use of platforms like Facebook to serve social good has been disputed accidental
this threatens the ability of the European innovation system to compete This European infrastructure would enable a whole new round of innovation that may not even be possible within current business models,
social innovations often need support in the early idea stages to refine their business models and grow their venture.
Standards will enable new business models for co-operation between multiple stakeholders such as companies, public authorities and citizens to develop meaningful technologies.
but also building competitiveness through design and creative industries, social and service innovation, new business models and practice-based innovation.
Regional policy makers also have to understand the different forms of innovation such as non-technology services, cross-sector technology integration, system and business model innovation,
and distribution methods and adapt their business models accordingly. European cultural and creative sectors are fragmented furthermore inherently along national and linguistic lines
''Developing new business models for SMES','Improving the urban environment','Developing Business incubators,'Supporting the physical and economic regeneration of urban and rural areas and communities,
applications and services, the support to new business models for CCI SMES, etc. Balance between hard (structures/infrastructures:
Increasing the support for new entrepreneurial firms that aim to deliver more radical eco-innovations and challenge existing firms and business models,
This needs new business models, industrial symbiosis, product service systems, product design, full life cycle and cradle-to-cradle approaches.
-2015 SME business model innovation 11.00 14. Secure societies Protecting freedom and security of Europe and its citizens DRS-17-2014/2015 Protection of urban soft targets and urban critical 7. 00 7
new business models, service innovation and design. The potential of clusters, that represent favourable ecosystems for innovation,
Europe's future economic growth and job creation must come from innovation in products, services and business models.
New forms of innovation (in the public sector, ICT government, business model innovation, social innovation community, ICT for learning and inclusion.
For instance, as a reaction to the downturn phase in the 1980s, the business models changed: While in the past the enterprises in Prato had a high degree of productive self-sufficiency,
such as how to effectively integrate e-business processes into existing business models and strategies to change organisational structures.
human resources (notably e-skills) and new business models"."4 The i2010 policy, a follow-up to eeurope, also stresses the critical role of ICT for productivity
Enterprises use of ICT (2005)( as a percentage of the total number of enterprises with 10 or more persons employed) Internal Computer network Intranet Online purchases business model Online sales business model External
. Even if Trafikanten does not operate in a competitive marketplace due to their specific business model, they compete indirectly with operators providing information to travellers
and business models Sector associations Business intermediaries Competence centres Improving ICT skills and managerial understanding and skills for ebusiness Facilitate knowledge transfer between research centres and enterprises.
and little incentive to change business models when returns are unclear. In a nutshell SMES'ICT requirements are that they support their core business,
such as how to effectively integrate e-business processes into existing business models and strategies to change organisational structures.
and their underlying software-based service platforms, are a prerequisite for the use and uptake of innovative business models and services that benefit the further development and growth of the European economy.
i e. reinforcing ongoing trends in business strategies (like globalization) or opening up ways to new business models (like network and web-based models);
The aim is to encourage the use of new ICT-based business models. Each scheme is tailored
However, for many ICT projects, the most significant challenge is precisely the development of a sustainable business model.
for want of a better phrase, a sustainable business model which either adapts, or takes into account, the payment systems in place for health care services more generally.
And Evolving Business models For Chronic Disease Care, Health Affairs, Vol. 28, No. 1, pp. 126-135.
The emerging business models which might ensure that those who benefit from the success of the system also bear a fair share of its ongoing cost are considered.
and sustainable business model to motivate adoption and continued use of EHRS by physicians. CHAPTER 3. ALIGNING INCENTIVES WITH HEALTH SYSTEM PRIORITIES 87 IMPROVING HEALTH SECTOR EFFICIENCY:
the most significant challenge is developing a sustainable business model. Long-term sustainability and financing appear to be the most challenging and, in most cases,
which four general categories of business models appear to emerge: Not-for-profit: the not-for-profit initiatives are driven by their charter to help the patients and the community in
The sections below will consider in some detail the different business models and how they are attempting to achieve long term sustainability.
Table 3. 2. Attitudes about payoffs according to main stakeholders Payoffs according to each stakeholder Funding source Business model Case study Users Individual patients Society Payer E
OECD based on case studies. The public utility model The strategy of the Health Ministry in the Baleares (Spain) has been to adopt a public utility business model:
form the basis of a potentially sustainable business model. The not-for-profit model It is the nature of ICT projects that
2) building a sustainable business model to keep the HIE in operation once the initial money has been spent.
In this case the business model is as good as patients'willingness to allow their data to be shared in ways that clinicians
The business model also depends on incentives that adequately reward physicians for their participation in quality improvement activities
business models, marketing and sales innovations etc.;improving the ability to run innovation processes in new ways e g. through open innovation methods and foster a new leadership, culture and management that supports excellence in innovation performance.
e g. a consortium with central actors 2) See Business model Generation by Osterwalder & Pigneur (John Wiley & Sons,
ISBN 978-0470-87641-1) for a description of the business model canvas 9 (14) IMPROVING INNOVATION SUPPORT TO SMES 19 that are involved in all processes and a council with more broad based
developing new products and implementing new business models. Creating the conditions which encourage risk taking, entrepreneurship, investment and hard work is important to foster innovation in Australia.
(or the accompanying changes and disruptions to existing business models brought by the internet). Nor could many have confidently foretold the extent of China's spectacular recent growth and its soaring demand for minerals and energy.
New business models are starting to rely on immediate transfer of international cargo to domestic transport hubs.
Ambition 4 69 Austrade provide reliable information about markets, technology and business models to small and medium enterprises, accelerating industry growth and job creation.
developing new products and implementing new business models (Carlino & Kerr, 2014), and international research suggests that companies in
An innovative business model requires no less than having good jazz scores (operating models and processes), played by good jazz musicians (employees),
-2015 SME business model innovation 11.00 14. Secure societies Protecting freedom and security of Europe and its citizens DRS-17-2014/2015 Protection of urban soft targets and urban critical infrastructures 7. 00
new business models, service innovation and design. The potential of clusters, that represent favourable ecosystems for innovation,
and their resultant (indirect) involvement in exporting activity can lead to significant diffusion of technology and more efficient business models,
or lack of incentive to change business models unless returns are clear. But SMES also face generic barriers to adoption,
23 Figure 3. 4 Chemstation's Business model...26 Figure 3. 5 Evolution of New Product-Service Development...
We also identified five mini-cases of SMES that developed compelling new business models that were accompanied by the creative use of information technology
2004). 8 Business model innovation involves creation of a value proposition that offers to satisfy the same
Chesbrough and Rosenbloom (2002) indicate that business model innovation, besides a new value proposition and targeted customers,
We return to the topic of business model innovation in section 3 where it relates directly to adding new services that complement existing products.
He also suggests that business model innovation is useful after mainstream products have commoditized. SMES can offer customers customized products perhaps supplemented with services.
Moore (2004) also suggests that business model innovation is a very effective strategy in mature markets with products in late life cycle stages.
and new innovative business models as outlined in our previous report (Warren and Susman, 2004). ) One way that SMES can achieve such growth is by adding services to or around their products and this section reports on such new opportunities.
Penetration of Services 18 3. 5 Mini-Cases The first mini-case illustrates how a supplier of a commodity product changed its business model to provide a complete service thereby satisfying previously unmet, indeed unvoiced, needs of its existing customers.
Greif converted its business model to being a trip leasing company for specialty chemicals the Fedex of problem chemicals.
The business model also builds barriers against competitors. Source: Warren and Susman, 2004. Additionally, services can help to establish customer lock in.
General Fasteners (GF), a manufacturer of bolts and other metal fasteners for the automotive industry looked for an innovative business model to change its competitive status. It started by participating in the engineering design of new car platforms
Recently the company has moved towards a total service business model starting with the installation of the plant and taking responsibility for its operation.
The service business model improves customer relationships. As mentioned above the company prides itself on reputation and reliability.
and, to a lesser extent, General Fasteners, that IT was integrated an part of their service business model, and not used
and cultures freezing them in outdated business models. It was, after all, Amazon and ebay that created on-line bookstores
and auctions rather than Barnes & noble and Sotheby's. Here are some categories for use of IT in business model innovations.
The power of the Netflix business model comes not only from the convenience but the ability to mine the data obtained by combining information from ALL customers nationwide.
DBI's business model is based on the principle of providing customers with reliable and customized services supported with proprietary information systems.
A business model based on information sharing can provide high barriers against competitors as the costs involved in integrating compatible data
A sound business model using data lock in will have multiple partners so that the dependence on one partner is reduced.
The General Fasteners case above is a good example of so-called customer lock in. 26 IT enabled innovative business models:
Chemstation has used a franchise business model to expand rapidly nationally without the need for the founding entrepreneur to raise any external capital.
Chemstation's elegant business model is depicted in Figure 3. 4. Figure 3. 4 Chemstation's Business model 27 The franchisor's headquarters,
around 25%of the $300 million U s. industrial cleaner market by providing customized cleaning solutions in an innovative business model that includes elements of franchising, data-mining of customer information,
In addition to using information technology (IT) to enable creative business models, SMES can, of course, derive benefits from the use of IT in their operations.
measures, rewards for selling services Build a servicedcentered culture Base business model on quick response and customization Shift downtime risk from customer to service supplier Transition from transactional to relational selling Base business model on low cost and convenience over product life Extend customer relationship deep
into value chain Develop TSD skills Table 5. 1 Path from Product-Centered to Service-Centered Business Level of difficulty 43 5. 1 Phase I:
Interestingly, many of these had moved from a pure product-centered business model to one where service components played an increasing role.
therefore to recall the attributes that we associated 44 with such companies as they provide a guideline for SME managers that wish to add services to their business model.
Up to this point, the firm's business model need not shift dramatically, but further steps will require a more dramatic shift.
The value proposition underlying the Phase II business model is to offer the customer equipment availability, operational uptime,
and require a more radical transformation in the business model. The firm now offers the customer total solutions to problems that relate to consumption or use of its products.
However, the transition to new service-centered business models does not come easy. The admittedly limited research on so-called hybrid business models indicates that the value systems, customer interfaces,
incentives and innovation processes must be substantially different from purely product-centered firms. Thus the move to these more complex yet more robust business models requires confronting the need for change management.
As we have seen, SMES may have inbuilt cultures and governance methods that make such changes difficult to execute.
They need support in initial analysis of their current and potential business models development of a transition strategy for changes in operations and structures needed to succeed,
restructuring, change in business models 4. Funding anything related to finance Figure 6. 1 shows the breakdown of the stories by category.
Within this 7%(or 45 assignments) MEP had helped the SMES change their business model only in about 20 assignments
new business models, change management and revenue enhancement through service additions. We have seen also that the addition of services around manufacturing products can have major benefits in terms of increased revenues
and business model innovation that we are addressing here. It is therefore unlikely that, at least on a local or regional basis
and managers of the potential of changing their business model to include services and all that it entails;
and accepting for considering changes in its business model. Techniques for judging the cultural attributes (see section 5) that can help determine how open the company may be to change.
and engages with a company seeking to change its business model, for example, the challenge will be compiled in a standard format on the portal.
"The role of the business model in capturing value from innovation: Evidence from Xerox Corporation's technology spin-off companies."
Discusses using a business model to successfully determine the value of technology. 62 Christensen, C. M. and J. L. Bower (1996."
innovation, innovation, entrepreneurship, business models 5 List of abbreviations used in the thesis ANT Actor-Networks Theory ASPEM Arena of SMES Performance Models HTSF High tech
The business models in this group focus on how firms proceed from their inception period to become fullygrown, functioning entities.
These models are mostly qualitative in nature (Table 2. 2). The second group of business models focuses on performance prediction,
Open innovation is linked to the usage of open business models (Chesbrough 2003, Melese et al. 2009. Hedner el al.
Contrasting e-commerce business models: Performance implications for small enterprises. Journal of Developmental Entrepreneurship 14 (1), 89 101.
and adoption of new business models in SMES by designing, implementing and managing strategies, policies and tools,
and adoption of new business models in SMES by designing, implementing and managing strategies, policies and tools,
which has brought to a collapse of the traditional business models, highly subsidised in the past: tourism, construction and industrial production.
'CID Working Paper 128 Hecht K. 2007),‘Intelligent Policy Management in the IMS Frameworks'at Business models and Drivers for next generation IMS services.
i) the business models need to be attached closer to the needs of society as providers of solutions;
He said typical strategic planning was often antithetical to promoting radically innovative business models and strategies.
which the old business models seemed no longer to apply. Yet, somehow, the basic laws of economics asserted themselves.
We can distinguish between product innovation, process innovation, marketing innovation, organizational innovation and innovative business model.
and its turnover increases by 10%for 3 years. t is desirable that the company has own product, process, intellectual property, business model.
business models), o organization of educational events with the involvement of public collection and public education institutions, o launch of regular programmes in the electronic media and publication of regular articles in the written
and land markets limits possible business models, raises the cost of ICT investment, and slows down market forces that can push firms to adopt more productive practices.
ICT can boost productivity by making older, less productive business models obsolete in favor of newer ones (e g.,
and enable downstream innovations in products, processes, business models, and business organization. By any of these measures, ICT ranks well against the most transformative technological breakthroughs in human history. 35 This is why ICT is such an important enabler of better tools to drive productivity.
reducing the revenue for websites that rely on ad-based business models. 106 This appears to be one reason the EU lags behind the United states in Internet companies.
PAGE 20 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION JUNE 2014 Privacy regulations not only limit business models they also increase the cost of doing business for firms,
Success for any individual health organization that embraces a digital business model depends on other health organizations,
They are often the motor of innovation as they are prepared to follow new business models, pursue new product areas and upset the established competitive balance, without the inhibition of an already successful revenue stream and established market position.
Clearly US companies have acquired a dominant position in web services, quickly building on innovative breakthroughs in software, design and new business models (e g.
(and accompanying business models) with global appeal in which the EU can develop major players. However the low cost of entry, availability of VC investment and speed of innovation seems likely to cement US advantage.
and third, novel, even revolutionary, business models. Throughout its history Apple has dared to be different, choosing to pursue new paths rather than follow market trends,
A large, single market assisted Amazon to bring economies of scale to bear on its low margin business model to establish its competitive advantage.
Success has come from high quality management, a well-focused strategy and execution of a viable business model.
business model and finance to overcome technological barriers and scale up the technology for mass manufacturing takes time,
and business model and we may only speculate whether long-term capital investment would have led to pursuit of a different strategy.
In large part, this resulted from its general inability to relinquish a successful business model based on technologies that were being superseded in a classic case of creative destruction.
and business models) and their permitted generality combined with ease of filing make the threat of overlap litigation more probable.
Also with the inadmissibility of patents on software, business models or processes, the field for innovators appears more open
and their related devices (as in the web service provider verticalization model-see Appendix on business models) then major disputes are increasingly common between the dominant players,
but rather the combination of a rewarding user experience and simple but highly effective design with novel business models. 32 The Development of U s. Policies Directed at Stimulating Innovation and Entrepreneurship David Audretsch and Taylor Aldridge, 2013,
This is a most significant change in its own business model. The plunge into Web-based services was been designed carefully to complement the simultaneous move into pure consumer products
In completely revising its business model, it has shown its abnormal innovative prowess and virtually has leadership in new business models for the web platform and for its hardware and software products.
The product range and development history in product terms is shown from 1976 to 2011: -Simon Forge SCF Associates Ltd All rights reserved 2012 30 Source:
was crucial to its formation, its business model, early survival, financing and massive success. In 1994 Jeff Bezos realized that he could create a retail website that would not have the limitations physical businesses encounter:
sub-sector (see Appendix 2 for the value chain of this business model. Now it has launched cloud computing services, based on its own business infrastructure to sell to others.
Amazon has shaped a quite classical business model with the Internet's specific advantages. It is not that disruptive just:
Looking under the covers of the business model (see the value chain Appendix 2) shows that Amazon,
and then sometimes withdrawn as it could manage the processes that inevitably come with a new business model.
and created a business model in which the basic service is free. Skype users can use their computer to call other Skype users for free anywhere in the world,
Its main innovation factor is a business model closely matched to its specific target market segment.
The company's business model is not to be mainstream but to cater 72 for local languages for middle management professionals who network in that language.
for two reasons firstly its business model which has ensured survival in a highly competitive market-and thus its growth in members, revenues and profitability,
largely because the business model at that time was far from clear. In 1992, Friend founded CDT Ltd, with support from the university and funding from local seed venture capital fund
Its business model is thus to sell proprietary materials, dopants and transport materials (produced by it supply chain of CIBA and BASF) with its IP licences,
Novaled's business model has evolved since 2001 towards materials and process technology IP for lighting, organic thin film transistors and solar cells, as well as displays.
Moreover, a completely different business model was called for in the analogue world, cheap hardware and expensive consumables laid the golden e g
what business model is likely to be most successful for instance the trend to verticalization in the web services sector from device to operating system to service as a lock in mechanism in a web market. 106 1 The Web Services value chain:
or inventing a new business model, establishing a new enterprise's or industrial organisation. R&d unit:
The Cignifi business model is founded on the idea that Mobile phone usage is not random it is highly predictive of an individual consumer's lifestyle and risk.
streamlining operations or creating new business models). The key findings from the survey are: According to 78%of respondents, achieving digital transformation will become critical to their organizations within the next two years.
operations and the business model has helped Starbucks re-engage with customers and boosted overall performance. Its stock price has bounced also back up from roughly $8 in 2009 to nearly $73 in July 2013.
customer relations and business models, as described in the next section (see Figure 3). The Benefits of Digita l Transformati on Companies that effectively manage digital technology can expect to gain in one or more of three areas:
better customer experiences and engagement, streamlined operations and new lines of business or business models. Though innovative new business models are what every CEO dreams of,
companies more often see digital technologies help transform their customer experience or operations. Business model transformation is difficult,
and far less prevalent, according to survey respondents. Customer experiences reflect the clearest impact of digital transformation.
But business model transformation is also elusive. A mere 7%of respondents said that their company's digital initiatives were helping to launch new businesses,
and only 15%said new business models were emerging thanks to digital technology (see Figure 4). It could be that these technologies are so new that they simply haven't had time to be turned into new business opportunities.
and markets Launch new businesses Develop new business models Transition physical products/services to digital products/services Customer experience Operational improvements Business model change 0
Companies are using technology to create real, transformative effects across customer experiences, internal operations and new business model.
The business model? Any individual step requires multiple, coordinated actions. It can also require executives to reframe
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