[PDF]Business Models: Networking, Innovating and Globalizing

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usiness Models

letworking, Innovating and Globalizing
Christian Nielsen; Morten Lund (Eds.)




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Christian Nielsen & Morten Lund (Eds.)

Business Models

Networking, Innovating and Globalizing



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2



Business Models: Networking, Innovating and Globalizing

2 nd edition

© 2012 Christian Nielsen, Morten Lund (Eds.) & bookboon.com (Ventus Publishing ApS)

ISBN 978-87-403-01 79-3



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Business Models:

Networking, Innovating and Globalizing



Contents



Contents



About the authors



1 An introduction to business models

1 . 1 Overview of the book

1.2 Networking, innovating and globalizing

1.3 Value configuration

1.4 Driving out the business model

1.5 Archetypes of business models: looking for patterns
Sum-up questions for chapter 1

2 A brief history of the business model concept

Sum-up questions for chapter 2

3 Moving towards maturity in business model definitions

3. 1 Business model typologies

3.2 Business model characteristics

3.3 Towards business model building blocks
Sum-up questions for chapter 3



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Business Models:

Networking, Innovating and Globalizing



Contents



4

4.1
4.2
4.3
4.4
4.5
4.6



5
5.1

5.2



6

6.1
6.2
6.3
6.4
6.5



Frameworks for understanding and describing business models

Service-profit chain

The strategic systems auditing framework

Strategy maps

Intellectual capital statements

Chesbroughs open business model framework

Business model canvas

Sum-up questions for chapter 4

Network-based business models

What defines a network based business model?
Barriers and challenges
Sum-up questions for chapter 5

Value creation maps

What is the value creation process?

Why might the value creation process be difficult to discover?

What is a value creation map?

The building process: A two-step method

Refining the value creation map



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Business Models:

Networking, Innovating and Globalizing



Contents



6.6 Value creation maps and indicators

6.7. Pros and cons

Sum-up questions for chapter 6

7 Business model innovation

7.1 Method

7.2 Analysis

7.3 Discussion: Single vs. multi BM innovation

7.4 Conclusion

Sum-up questions for chapter 7

8 Globalizing high-tech business models

8. 1 Setting the scene

8.2 Tensions at the inception

8.3 Dyadic tensions

8.4 Conclusion

Sum-up questions for chapter 8

9 Communicating and reporting on the business model

9.1 The demand and supply of value- creation information

9.2 The business model and business reporting



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Business Models:

Networking, Innovating and Globalizing



Contents



9.3

10

10.1
10.2
10.3
10.4
10.5
10.6



11

11.1
11.2

12

12.1
12.2
12.3
12.4



Good advice on communicating business models
Sum-up questions for chapter 9

The investor perspective on business models

Information needs of investors and analysts

Background on the market for information

Gaining a competitive edge in the market for information

Information trigger-points for investors

Analysts as infomediaries

Translated to the real world context this means. . .

Sum-up questions for chapter 10

Analyzing business models

The analytical guideline

The process of evaluating business models

Sum-up questions for chapter 1 1



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166



Strategic innovation - the context of business models and business development 167

Introduction: a new competitive landscape 167

Strategic innovation: the background 169

Defining strategic innovation 170

Defining business concepts 171




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Business Models:

Networking, Innovating and Globalizing



Contents



12.5 Discussions

Sum-up questions for chapter 12

References



178
181

182




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Business Models:

Networking, Innovating and Globalizing About the authors



About the authors



Christian Nielsen

Christian Nielsen, Ph.d., is Associate Professor at Aalborg University in Denmark. He is Centre Director
of CREBS (Center for Research Excellence in Business models, www.crebs.aau.dk ), the worlds first
interdisciplinary research center focusing on business models. Christian has previously worked as
an equity strategist and macro economist focusing specifically on integrating Intellectual Capital and
ESG factors into business model valuations. His Ph.d. dissertation from 2005 won the Emerald/EFMD
Annual Outstanding Doctoral Research Award, and in 2011 he received the Emerald Literati Network
Outstanding Reviewer Award. Christian Nielsen has a substantial number of international publications
to his record and his research interests concern analyzing, evaluating and measuring the performance
of business models.

Linkedin profile for Christian: dk.linkedin.com/in/christianhnielsen

Morten Lund

Morten Lund, MA in Business, Ph.d. Fellow at Aalborg University in Denmark. He is
an experienced entrepreneur and executive, with a combined pragmatic and creative
profile. He believes in mixing knowledge and creativity with methods and structure.
He has a wide knowledge and experience both practically and methodologically/theoretically that he has
gained through a natural curiosity and eagerness to discover new dimensions of business. He is among
the founding group of CREBS (Center for Research Excellence in Business models, www.crebs.aau.dk ),
the worlds first interdisciplinary research center focusing on business models.

Linkedin profile for Morten: dk.linkedin.com/in/mortenlunddk



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Business Models:

Networking, Innovating and Globalizing About the authors



Romeo V.Turcan

Romeo V. Turcan is Associate Professor at Aalborg University in Denmark. He holds a PhD and an
MSc degree from Strathclyde University in the UK, and mechanical engineering degree from the Air
Force Engineering Military Academy in Latvia. He has researched in the areas of entrepreneurship and
international business, including aspects of legitimation, internationalization of entrepreneurial firms,
de- and re-internationalization of knowledge intensive ventures. He has studied the entrepreneurial
capabilities and business models of knowledge intensive firms and is interested in cross-disciplinary
theory building. Dr. Turcan has published in Journal of International Entrepreneurship, International
Journal of Entrepreneurship and Small Business, International Entrepreneurship and Management
Journal, Venture Capital: an International Journal of Entrepreneurial Finance, International Small
Business Journal, and Advances in International Management.

Linkedin profile for Romeo: dk.linkedin.com/pub/romeo-turcan/0/87/b65

YarivTaran

Yariv Taran, Ph.D, is an Assistant Professor at the Center for Industrial Production at Aalborg University.
He received his bachelor's degree in Management and Sociology at the Open University of Israel, and
M.Sc. in Economics and Business Administration at Aalborg University. His research focuses on business
model innovation. Other areas of research interests include intellectual capital management, knowledge
management, entrepreneurship and regional systems of innovation.

Academic profile for Yariv: http://personprofil.aau.dk/115453

Marco Montemari

Marco Montemari, Ph.D., is Research Grantee at the Marche Polytechnic University (Faculty of
Economics "G. Fua"). His research interests concern management accounting and intellectual capital.
Marco was a visiting Ph.D. student at the Aalborg University in Denmark from May to August 2011.
His Ph.D. dissertation focused on how cognitive maps can support and improve the measurement and
the management of intellectual capital.

Linkedin profile for Marco: it.linkedin.com/pub/marco-montemari/2b/168/979



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Business Models:

Networking, Innovating and Globalizing About the authors



Robin Roslender

Robin Roslender is a Professor in Accounting and Finance and Acting Dean at Dundee University. A
trained sociologist and accountant, he divides his research effort between managerial accounting and
critical accounting topics. Currently Dr. Roslender is looking at the relationship between workforce
health and well-being and intellectual capital. In early 2008 he was appointed Editor of the Journal of
Human Resource Costing and Accounting.

Academic profile for Robin: http://www.dundee.ac.uk/accountancy/staff/robinroslender/

Per Nikolaj Bukh

Per Nikolaj Bukh is a Professor at the Department of Business Studies at Aalborg University Denmark
( http://www.pnbukh.com/ ). He has published about 200 articles, book chapters, reports and books on
a number of subjects including Knowledge management, Intellectual Capital reporting, Benchmarking
and management accounting. In addition to his research activities, Per Nikolaj Bukh often contributes
to postgraduate programs and conferences.

Linkedin profile for Per Nikolaj: dk.linkedin.com/in/pernikolajbukh



Anders Drejer

Anders Drejer is a Full Professor in Strategic Management and Business Development at Aalborg
University, Department of Economy and Management. Professor Drejer has a M.Sc. in Industrial
Engineering (1993) and a Ph.D. in strategy (1996) from Aalborg Unversity He has published extensively
over the years including 14 books and more than 100 journalpapers and scientific articles. Furthermore,
Professor Drejer is a well-known expert in the media, public speaker and advisor to a number of
organisations. At present, Professor Drejer is interested in the new business models that are being created
based on globalization, digitalisation, experience economy and new competitive landscapes.

Linkedin profile for Anders: dk.linkedin.com/pub/anders-drejer/0/2 14/221



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Business Models:

Networking, Innovating and Globalizing An introduction to business models

1 An introduction to business
models

(Written by Christian Nielsen, Associate professor, PhD, and Morten Lund, MSc, PhD-fellow)

[Please quote this chapter as: Nielsen, C. & M. Lund (2012), An introduction to business models, in
Nielsen, C. & M. Lund (Eds.) Business Models: Networking, Innovating and Globalizing, Vol. 1, No. 2.
Copenhagen: BookBoon.com/Ventus Publishing Aps]

A business model is a sustainable way of doing business. Here sustainability stresses the ambition to
survive over time and create a successful, perhaps even profitable, entity in the long run. The reason for
this apparent ambiguity around the concept of profitability is, of course, that business models apply to
many different settings than the profit-oriented company. The application of business models is much
broader and is a meaningful concept both in relation to public-sector administration, NGO's, schools
and universities and us, as individuals. A recent contribution in this latter realm is the book Business
Model You by Clark et al. (2012), which translates the ideas of Osterwalder & Pigneur's (2010) business
model canvas into a personal setting for career enhancement purposes.

Whether, in the case of the privately owned company, profits are retained by the shareholders or distributed
in some degree to a broader mass of stakeholders is not the focus here. Rather, it is the point of this book
to illustrate how one may go about conceptualizing, analyzing or communicating the business model of
a company, organisation, or person!

Sustainability is here interpreted as the propensity to survive and thus also the ability to stay competitive.
As such, a business model cannot be a static way of doing business. It must be developed, nursed and
optimized continuously in order for the company to meet changing competitive demands. Precisely how
the company differentiates itself is the competitive strategy, whilst it is the business model that defines
on which basis this is to be achieved; i.e. how it combines its know-how and resources to deliver the
value proposition (which will secure profits and thus make the company sustainable).



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12



Business Models:

Networking, Innovating and Globalizing



An introduction to business models



In the last decades, the speed of change in the business landscape has continuously accelerated. In the
late 1990s, the e-business revolution changed global competition, and during the early years of the new
millennium the knowledge-based society along with rising globalization and the developments in the
BRIC economies ensured that momentum continued upwards. As new forms of value configurations
emerge, so do new business models. Therefore, new analysis models that identify corporate resources
such as knowledge and core processes are needed in order to illustrate the effects of decisions on value
creation. Accordingly, managers as well as analysts must recognize that business models are made up of
portfolios of different resources and assets and, not merely traditional physical and financial assets, and
every company needs to create their own specific business model that links its unique combination of
assets and activities to value creation.

The rising interest in understanding and evaluating business models can to some extent be traced to the
fact that new value configurations outcompete existing ways of doing business. There exist cases where
some businesses are more profitable than others in the same industry, even though they apply the same
strategy. This illustrates that a business model is different from a competitive strategy and a value chain.
A value chain is a set of serially performed activities for a firm in a specific industry.



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The difference thus lies in the way activities are performed (strategic and tactical choices), and therefore
a business model is closely connected to a management control agenda. The business model perspective
has also been found useful for aligning financial and non-financial performance measures with strategy
and goals. In addition, communicative aspects from executive management to the rest of the organization,
and also to external stakeholders such as bankers, investors, and analysts, are also facilitated by a business
model perspective.



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13



Business Models:

Networking, Innovating and Globalizing



An introduction to business models



1 .1 Overview of the book

The field of business models is becoming a core management discipline alongside accounting, finance,
organization etc. and we soon expect to see teaching modules on business models entering leading
Masters and MBA programmes. This development is taking place as we speak, and at Aalborg University,
this curriculum is already a mandatory part of several Masters level courses. This movement is in the
coming years expected to be driven forth, partly by a call for greater interdisciplinarity within the core
management disciplines and across the natural sciences, and partly because business model optimization
and commercialization will become a politically driven issue in the light of innovation and sustainability
pressures. At CREBS we believe that the focus on Business Models in policy-making and the business
environment should be equally as important as the present focus on innovation and technology
development and will become a focal point of support for entrepreneurs and small and medium sized
companies.

The "Vision" of this book is to be the most accessed and read book on business models by students,
teachers and practitioners, and in due course to strengthen the relationship between innovation and
commercialization activities and to make an impact on growth and sustainability of businesses.



The "Mission" of this book is to constitute an internationally renowned platform that accompanies leading
experts world wide and to affect business-related policy-making on regional, national and transnational
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