This is one of many reasons why it's misleading to translate business models directly into the social field.
social movements, business models, laws and regulations, data and infrastructures, and entirely new ways of thinking
A business model that runs parallel to the core idea of the venture and which sets out how it can become sustainable.
The idea pulls one way, the daily practice another. 1 Creating a business Turning a good idea into something sustainable outside of the public sector depends on a business model a clear idea of how it will generate a sufficient income
which may be a public agency or the public themselves. 105) Innovative business models. The business concepts of the social economy require as much care
For social enterprises, the business model represents a strategy for sustainability. It needs to be simple, persuasive and striking,
Business models that work are themselves a prime area for social innovation. They are as diverse as business models in commercial markets,
ranging from direct service provision to commissioners, through models that create value for customers to models similar to those around the web that share knowledge and intellectual property. 106) Business strategies.
The context for a business model is a business strategy about how the proposed venture is positioned on the economic field of play.
There are a range of social business models that involve recognising the potential value of a venture's assets
Particularly instructive for social ventures are the lessons from the business models adopted by web companies which
Business models together with business strategies then need to be turned into business plans. Although it is rare for a social venture to be a straightforward implementation of a blueprint (it is much more like a process of discovery and unfolding),
There are many methods that help to define business models and business plans. The Bell-Mason methods from the field of venture capital, for example, provide a rigorous framework for paying attention to the many elements that together make up a credible business plan,
One new initiative by Open Business is the creation of a database of open business models. 199) Barefoot consultants.
This has required new laws, regulations, business models, habits in the home (separating waste), collection systems, and new ways of reusing
and led to new regulations, directives, business models, and public attitudes. 232) Prevention. Many new scripts are about investing in prevention rather than financing the costs of neglect.
because their business model draws on the fact that any new venture needs to be based somewhere,
Inspirational examples and more information on successful business models 3 SUPPORT IN THE MARKET ECONOMY 181 are critical for the growth and sustainability of the social enterprise sector.
Social business models Social business models are enabling organisations to tap into new sources of funding, and organise governance
or TNT's distribution of food to disaster areas. 450) Hybrid business models that combine business capacities with 3 184 THE OPEN BOOK OF SOCIAL INNOVATION social goals such as Vodafone
and tools that underpin the new systems are developing innovative business models to cover the costs involved this is especially the case where services are provided for free.
it is necessary to study the socioeconomic impacts of new technologies, working practices and business models.
and transferred to Small businesses by using new and more effective business models. Three main key issues should be addressed to effectively support Small Businesses evolution toward the knowledge economy:
which could be software components, applications, services, knowledge, business models, training modules, contractual frameworks, laws, These digital species,
but also innovative business models, sectorial services.)continuously appear and decree the obsolescence of the other digital species. Gradually more complex species appears,
WTC regulations Basic protocols, network infrastructure TCP IP XML, ebxml organs Software components, business models Open source models, operating systems Simple species Grass, worms
the knowledge sharing aspect and the business models and practices. Therefore, it also includes instruments for knowledge sharing, for knowledge basis setup, for community building, e-learning tools, support for e-learning and e training (in technology and in e-business),
business models; repository of practices, business solutions, regulations; newsletters The services, following the digital ecosystem philosophy are subject to selection and basic components sectorial components FN, September 2002 Digital Business Ecosystems page 17 evolution.
(or the network of local communities) together with the distributed virtual communities, contributes to develop strategies, technological solutions, digital services, business models.
an open source model adopting multiple business models; for the digital species of specialised ecosystem: encouraging the maximum coexistence and diversity of models and licences, supporting as much as possible the equal opportunities of service/solution publishing and fair competition;
and a feasible business model to finance U multirank (see chapter 8). Another important aspect of user-friendliness is the transparency about the methodology used in rankings.
Business model 8. Business plan and marketing. If the objective is to establish U multirank as largely self-sustainable,
and the consequent constant revision of value propositions and business models for rebranding a company digital business, due to strict time to market.
Finally, Part III will discuss first (Chap. 9) the underlying issues and the most relevant concepts for understanding Business model Innovation, providing general insights on the state-of-the-art and basic constructs of this research stream
160 Part III Digital Innovation Trends 9 Reinventing Business models: The Third Way of Digital Innovation...
165 9. 2 Fundamental Elements of a Business model...169 9. 2. 1 Offer to Customers...
171 9. 3 Business model and Strategic Innovation...172 9. 3. 1 The Business model Configuration...172 9. 3. 2 Offer and Business model Alignment...
173 9. 4 Digital Business model Innovation: Conceptualizations...176 9. 5 The Business model in the Information and Communication Economy...
178 9. 5. 1 The Strategic Variables...181 9. 5. 2 From the Traditional Model of Innovation to Open Innovation...
182 9. 6 Summary...184 References...185 10 Innovation Practices...187 10.1 Introduction...187 10.2 Instabank...
188 10.2.1 Developer...188 10.2.2 Applications...189 10.3 Macrosense...190 10.3.1 Developer...191 10.3.2 Applications...
and Durability BM Business model BMI Business model Innovation BYOD Bring Your Own Device CEO Chief executive officer CFO Chief Financial officer CIO Chief Information Officer CMMI Capability
Thus, Big data call for a radical change to business models and human resources in terms of information orientation and a unique valorization of a company information asset for investments and support for strategic decisions.
and exploit Big data to develop flexible strategy and business models, thus, anticipating and responding to volatility of market and customer needs,
transformational typologies and business model impacts. Eur J Inf Syst 20: 358 374. doi: 10.1057/Ejis. 2010.65 20.
Furthermore, they contribute to create multi-sided markets3 where the business focus is on networking benefits for value creation, asking for new business models and pricing strategies, likewise.
Multi-sided markets challenges governance and digital business models innovation 38. For further details on digital governance we refer the reader to Chap. 8 of this book. 3. 1 Introduction 49 service depends on
and the current business model adopted by a given company may not always sustain the service design and delivery,
Adopting a brand new CEM perspective means that firms have to reconsider, on the one hand, their current Digital Business models 1 4;
based on new digital business models, have been implemented supporting decision making processes in different fields such as, e g.,, R&d, market research and analysis,
and forcing companies to constantly identifying new business models, reshaping all the back-end and front-end activities (we are going to detail some of these in challenges in the Section of this Chapter on Social Sensing).
and new business models for overcoming the specific nature of their features and functions, moving from specializing domains towards a wider diffusions and adoption through the inclusion, e g.,
MIS Q Exec 1: 17 34 2. Osterwalder A, Pigneur Y, Tucci C (2005) Clarifying business models:
) Do some business models perform better than others? a study of 1000 largest firms. MIT Cent Coord Sci Work Pap 226 5. Bonabeau E (2009) Decision 2. 0:
Also, it is necessary to create plans for incentive mechanisms and frameworks that suit existing business models and real world systems such as workflow,
and the consequent constant revision of value propositions and business models for re-branding a company digital business, due to strict time-to market.
and business models for re-branding a company digital business. Besides these strategy and marketing facets of digital business identity, the technical and social challenges to privacy and security related to this openness and‘‘instability''6 of digital competition are worth mentioning.
whereas, due to the above factors, they may have to revise it according to new business models every 2 years or even less. 2 Furthermore,
in order to build trust by delivering the established customer promise (the second block-related 2 Business model innovation is going to be discussed in Chap. 9. 7. 3 Digital Brand Management 139 quality in Fig. 7. 3),
a multiple case study. Int J Digit Soc 1: 308 313 References 161 Part III Digital Innovation Trends Chapter 9 Reinventing Business models:
As a consequence, in this Chapter we discuss the underlying issues and the most relevant concepts for understanding Business model Innovation (BMI), providing general insights on the state of the art and basic constructs of this research stream,
and practices. 9. 1 Introduction The concept of a Business model (BM) is not completely new in the field of economics,
we can argue that this concept is, implicitly or explicitly, an integral part of the behavior of any economic entity in any historical period 3. At the same time, within the fold of standard economic theory, the problem of setting up a business model
The first studies in the field of strategic management 4 identify organizational design as the key element behind new types of emerging business models,
that the term business model has become a much discussed topic of research that underwent a very wide spread among academics,
consultants and managers 8. In fact, the business model was established as the independent unit of analysis of business
and economic dynamics 9. Providing a definition of the concept of business model is a useful starting point for discussing its implications and relevance in the context of economic and managerial studies.
In addition, the concept of business model is emerging as one of the main levers of change
In particular, two complementary visions of the business model arise from the literature in the field of technological innovation management:
the first one conceptualizes the business model as a fundamental tool through which companies can commercialize innovative ideas and technologies 10,
while the second identifies the business model as a new layer of innovation added to product innovation and process innovation 11.
A significant example of the growing awareness by top management of the business model as a crucial tool to acquire
The study, in fact, reports that 7 out of 10 companies claim to pursue business model innovation as a strategic priority
to some extent, readapting their business model. The tumultuous development and the spread of information and communication technologies have contributed certainly in a decisive way to the interests of the business
and the academic world towards the business model as a fundamental enabler of the ability to compete
However, other determining factors such as globalization and deregulation have not only made the emergence of new types of business models possible
and managed and to increasingly pursue innovation in the adapting of their business model to the new economic environment rather than in innovating a product
or a single process 14.166 9 Reinventing Business models Despite the growing attention to the theme of the business model as a fundamental management tool for the development of strategic innovation on which the competitive performance of organizations rest,
In fact, the concept of business model is used to analyze diverse dynamics and aspects, such as e-business 15,
Another issue on which authors disagree is the positioning of the concept of a business model relatively to the traditional units of analysis such as the single company or its network.
the business model can be identified at a company level 16, while others argue that the business model sits at a network level 17,
while a third approach conceives the business model as an intermediate entity between the company and the network 18.
In addition, while some authors try to identify an adequate definition of the concept 7, others focus on the analysis of the relationship between business model
and other dimensions such as information systems 19 and business strategy 20 and others focus on the constituent elements that make up the business model 11.
In order to outline a complete picture of the thematic area of interest it is helpful to trace the various contributions of the authors through the analysis of certain definitions that show the widest resonance throughout the literature.
Table 9. 1 shows some of the definitions that have been proposed for the concept of business model highlighting the crucial concepts identified by various authors.
It is possible to observe that all these definitions agree in considering the business model as an essential element of business performance.
In fact, the business model establishes the fundamental logic according to which the company intends to create and deliver value to its customers
This is because the business model is the fundamental framework for the analysis and management of each strategic choice made by the company 7 as well as for the proper communication and dissemination of such strategic choices to the entire organization 15.
Therefore, the ability to build strong and sustainable business models is a prerequisite for the competitive success of any company 21.
the real source of competitive advantage is to be identified in the ability to build a business model fitting to the current economic and technological environment,
because that is what allows an enterprise to transform a technological innovation in sustainable economic value for the business itself 11.9.1 Introduction 167 Table 9. 1 Definitions of business model Authors Definition Key concepts Magretta 2002
A good business model is able to answer to the longstanding questions of Peter Drucker: Who is the customer?
The business model is conceived as a focusing device that mediates between technological development and the creation of economic value Technology;
exchange modes between actors (continued) 168 9 Reinventing Business models 9. 2 Fundamental Elements of a Business model An analysis of the literature shows that several authors have focused on the identification
and study of the fundamental elements that make up a business model 7, 15 and, based on this analysis,
network value 9. 2 Fundamental Elements of a Business model 169 and services. Thus, the BM of a company must contain a description that summarizes how it intends to deliver value to current and prospective customers and
the business model of a company defines its position within the value chain in which it operates and its relations with the various stakeholders.
Businesses must be able to identify from the number of resources needed to manage their own affairs those few strategically crucial ones that enable them to successfully implement their own business model.
Table 9. 2 Business model conceptualization Business model area Constituent elements Relevant literature Offer to Customers Customer value proposition 3, 7, 11,15, 18,19, 21,23, 24,25 27, 27,28, 29,
Revenue model 170 9 Reinventing Business models 9. 2. 4 Finance The financial dimension of the BM explains how the company is able to generate sales and profits 15.
which the company's revenue is generated 9. 2 Fundamental Elements of a Business model 171 proposed value for the customer, with a direct influence on revenues and margins 7,
Tables 9. 3, 9. 4, 9. 5 and 9. 6 illustrate in detail the elements that make up the various dimensions of the Business model and which,
in reality are interrelated strongly and interdependent. 9. 3 Business model and Strategic Innovation In the current economic environment,
In fact, the focus of businesses is increasingly on innovation of the business model as an alternative or as an essential complement to product and/or process innovation.
or process) taken place without producing as a result a change in the business model and vice versa.
and business model change to create innovation. But what factors have prompted organizations to move the center of their strategic action from
the configuration of the business model in relation to existing products and the alignment between the innovations and the business model. 9. 3. 1 The Business model Configuration The proper structuring of the business model
but also for sustaining existing competitive 172 9 Reinventing Business models advantage. The innovation of the business model can prove to be the crucial lever that allows the company to remain competitive in the race to product or process.
In fact the products that are incorporated into an innovative and efficient business model are less likely to be rendered obsolete by the introduction of new products by competitors as it is generally more difficult for competitors to replicate
and replace a whole system of activities rather than a single product or process. The Apple case is illustrative of this point 7, 33,34.
corresponds to a formidable innovation of Apple's business model. In summary, not only Apple has developed and brought to the market hardware and software products with a high degree of innovation,
which have been integrated into Apple's business model through the creation of Apple's online music store.
which is the core of Apple's business model, allows the company to create and extract value on an ongoing basis
Apple has managed to shift the locus of competition in the fast-paced technology market from product innovation to the innovation of the business model of reference for an entire market,
acquiring a formidable competitive advantage. 9. 3. 2 Offer and Business model Alignment The true value of innovative ideas and technologies for the most part depends on the business model through
or are destined to failure without a solid business model that allows a profitable commercialization 11. As it is now widely recognized both in theory and in business practice
An effective innovation strategy 9. 3 Business model and Strategic Innovation 173 must understand and take into consideration two fundamental aspects:
in formulating and implementing effective business models 3. It can rightly be argued that the‘‘original sin''of many of the so-called dot com that collapsed at the outbreak of the new economy bubble during the years 2000 and 2001 can be identified precisely in the absence of an economically successful,
grounded and sustainable business model. In reality many companies with a registered domain on the Web were aimed entirely at attracting as many users as possible to their websites,
However these companies lacked a business model that could convert the number of users who visited their sites in cash flows and profits.
At the base of the failure of this company (and many others) was the inability to build a business model that would allow translating the clicks of users who had been attracted into profits.
The centrality of the business model can be defined through the two following core processes any company is called necessarily to deal with
In this sense, a proper business model involves the construction of a system of relations which enables effective coordination in the acquisition
This way, the business model must be understood and used as the primary tool through which companies can,
on the one hand, operate to expand their target 174 9 Reinventing Business models market value creation); on the other hand, they can be able to grab a share of the profit resulting from this enlargement of the market.
A profitable and sustainable business model must articulate not only the operations and processes that underlie value creation and appropriation activities,
distribution and marketing can now be performed (at least partly) by actors external to the company. 2 1 As shown also in Chap. 4 on Social Listening. 2 As shown by the Crowdsourcing practice discussed in Chap. 6. 9. 3 Business model and Strategic Innovation
175 9. 4 Digital Business model Innovation: Conceptualizations The advent of the digital economy can be conceived really as a new industrial revolution both in terms of magnitude
and implement a business model able to deal with and exploit such characteristics of the digital economy.
, web-based supply chain management 176 9 Reinventing Business models systems, online commerce, interactive customer service) that enable the creation of value not only through the reduction of costs,
offer value propositions and business models 39. First of all the market is no longer just a physical place and geographically fragmented,
A source of value 9. 4 Digital Business model Innovation: Conceptualizations 177 recording industry, which had to completely reconfigure its value chain
and its traditional business model in response to new distribution channels made available by the digital network,
which faces major strategic challenges especially related to building a business model that allows providers of new information services to create
The formulation and implementation of an appropriate business model are vital to meet the challenges of the digital economy,
they must be able to identify the disruptive nature of these innovations in order to effectively reconfigure their distribution strategies or the entire business model 3. Taking the above issues into account,
and of electronic commerce and their success depends mainly on the ability to build a business model that can capitalize on these particular characteristics.
In the context of the digital economy, the innovation of the business model can be defined as the creation
Among the successful examples of innovation of a business model that can profitably make use of some of the above features of the Internet as a disruptive innovation we can mention Dell's build-to order and direct sales model,
41,42. 9. 5 The Business model in the Information and Communication Economy The consolidation of the information and communication economy is the culmination of the process of evolution that had the service economy gradually replaced the industrial economy,
In this context, information is 178 9 Reinventing Business models defined as any product that can be digitized,
and digitalization has been discussed in Chap. 3. 9. 5 The Business model in the Information and Communication Economy 179 experience goods must devise strategies to persuade users to overcome their reluctance to buy information before knowing the characteristics.
180 9 Reinventing Business models such as the telephone, the fax and internet access, are a clear example of products displaying network externalities.
Innovating and exploring new business models can be equally profitable if not more, from a strategic standpoint than innovating products 11.
It is therefore important to analyze emerging business models in order to understand the factors that lead to the success or failure of innovation processes.
The configuration (or reconfiguration) of a business model is often the direct result of technological innovation
and hyper-competitive have undermined the very architecture of innovation processes that were the basis for the growth of 9. 5 The Business model in the Information and Communication Economy 181 companies for many years, pushing towards a profound transformation
but not consistent with the business model adopted, are discarded without seeking an alternative use, either in another market or by selling them,
2) the degree of control exercised by the company 182 9 Reinventing Business models over the innovation process aimed at creating value;(
and the particular business model put in place by the company. The fundamental idea of the paradigm of open innovation is that the company needs to look beyond its boundaries,
and defending the revenues Building the best business model involving external actors Degree of collaboration among companies None, collaboration present only internally among R&d teams An articulated network of interactions
and industries Relation between research and the adopted business model The results of research are tied necessarily to the company's internal operational model 4 See also for these topics the discussion about digital work and collaboration in Chap. 6. 9
. 5 The Business model in the Information and Communication Economy 183 broadening the portfolio of solutions and projects
because it operates within a business model capable of transforming the output of R&d in economic value,
but it becomes more important to build a business model that can collect, integrate and enhance the best ideas,
and supported by an open business model as a fundamental source of innovation advantage, aimed at expanding the knowledge base of the company,
likewise. 9. 6 Summary This Chapter has provided an overview of the digital innovation impact on Business models (BMS).
Furthermore, the Chapter has presented the main concepts underlying Business model Innovation (BMI), providing insight on the relevant literature and the tools for a solid definition and conceptualization.
Understanding 184 9 Reinventing Business models the effect of digital innovation on the business strategy and its potential for generating value
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Harvard Business Review Press, Boston 186 9 Reinventing Business models Chapter 10 Innovation Practices Abstract This Chapter focuses on examples of digital innovation in practice, providing fact
The only side that appears to be charged in this multi-sided-platform business model is the Financial institution willing to get the integrated bill monitoring
giving customers the clear message that the company intends to leverage IT value in its business model.
Ventures 205 10.11.2 Applications Starbucks Digital Ventures'strategy aims at developing a digital media company business model dedicated to all Starbucks customers.
thus, constructing dynamically your digital business identity through innovative business models and an effective digital governance.
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