Systematic Approach: The company Goodyear developed a six-step process for business model innovation, the goal is to reduce risks and maximize the potential for value creation. This approach begins with the identification of the value for customers and ends with an incubation in the market to test the viability of the business model​​.
Risk Management: The paper emphasizes the importance of identifying and prioritizing risks early in the business model innovation process. These include execution risks, co-innovation risks, and adoption risks, which are assessed and managed through financial models and business experiments​​.
Incubation for Market Introduction: Goodyear’s method includes incubating new ventures at a small scale to test profitability and scalability before large-scale launch as well as to identify a business-building strategy. A key decision in incubation is whether to organize the new business within the relevant business unit or as an independent entity.

While focussing on business model innovation in practice can have many managerial implications, we decided to highlight 3.
The first one is when building a business model, it is more than just fulfilling a tool. Most people associate business models with tools like the business model canvas. Such a tool can be useful for brainstorming and visualizing ideas, but it omits the three main characteristics of a strong business model : coherence, because there is no relationships among elements, the competitive position and finally, the economic leverage, because it does not quantify it.
The second one is in order to succeed in a business model, managers need to make more than just capturing the value. At each step, the company requires to ask the right questions : Why me ? What can I offer that my competitors can’t ? It has to make sure that it is offering something more than others, and that the organization can keep this competitive advantage.
Finally, the main role as a manager is to create the right environment to welcome the new business model. Making sure that employees have the needed skills to implement the business model but also adapting the theoretical model to the reality of the business.

The first limitation you can learn from reading our article is that the business model remains a concept. This is a theoretical scheme and one of its limits is knowing how to apply it in practice, which is rarely the case.
Then, it is from a team standpoint. This is hard to recruit and nurture talent with nontraditional skills required which is essential for the successful execution of business model innovation. For instance, integrating artificial intelligence may demand a workforce with expertise, requiring an effort to identify and attract individuals with specialized skill sets.
Finally, Managing the relationship with core businesses is a limitation. For instance when the new venture and the existing business compete for resources or customers. Business oversight is necessary for creating credibility, but it requires a time commitment from the responsible.

Finally, we have chosen two additional sources that are relevant because they extend our reflection beyond the subject already presented in our article.
The first one is “The wider implications of business-model research” by Ritter, T., & Lettl, C. (2018). published in Long Range Planning. It identified five different perspectives of a “business model” and each of them use a different way of defining it and are meaningful.
In comparison with our article, both emphasized the importance of competitive advantage to attract customers and making innovation viable.

The second one is “How Entrepreneurs make sense of Lean Startup Approaches: Business Models as cognitive lenses to generate fast and frugal Heuristics.” by Ghezzi, A. (2020). published in Technological Forecasting and Social Change. It precisely explains the “lean startup approach” that modifies the traditional business development by promoting a continuous cycle of building, measuring and learning.

The workshop centers on Russel Belk’s article, exploring the non-reciprocal pro-social behavior of sharing. Belk distinguishes between demand sharing, characterized by explicit requests, and open sharing, where resources are implicitly available. The article delves into the transformative impact of the digital revolution, highlighting interactive platforms and social media’s role in facilitating global information sharing. A significant aspect discussed is the evolution towards collaborative consumption, where individuals coordinate resource acquisition and distribution for compensation. This shift signifies a move from traditional free sharing to a more organized, economically incentivized model, shaping contemporary consumption practices in the digital era.

Implications

The initial query is, “How should stakeholders respond to the sharing and collaborative consumption economies?”

Such a question elicits either a fight or flight response. The former involves resisting disruptive technologies that undermine established business models by deploying intellectual property rights (IPR) and digital rights management (DRM). The latter entails branching out into fresh enterprises beyond the current industry. However, both reactions are knee-jerk, meaning they are very rapid and not effectively capitalizing on opportunities.

A more effective approach is to adapt business models to cater to the shared economy and collaborative consumption. Successful sharing ventures can lead to fewer purchases and a shift towards shared ownership or short-term rentals. An example of a shift towards this business model is Mercedes2Go, which followed in the footsteps of Zipcar, a car rental company that offers subscription-based cards for short-term car access. Mercedes’ aim was to target the younger generation who were not interested in car ownership. Another way to adapt a business model is by acquiring disruptive technology, as Avis did when it purchased Zipcar in 2013.

Companies should also consider asking themselves: ” How else can the consumer acquire and use the types of goods or services I currently provide and how might I innovate to capitalize on these possibilities?” A prime illustration of this is Netflix, which transitioned from physical DVD rentals to a subscription-based streaming service in response to movie piracy.

Limitations

We identified two business cases where the article’s concept of free sharing and collaborative consumption cannot apply. The first one is groceries due to the short-term nature of their products. They are perishable, quickly consumed items, for example bread and shampoo, both of which have no notion of being shared between households since people prefer to have their own. The second case is of artisanal luxury products such as tailored suits, customized jewelry, and commissioned artwork. These products have a niche and exclusive audience, and each product is unique and bespoke one-off specialized designed according to a client’s taste. In that light, it would not be applicable to the practice of free sharing and collaborative consumption.

Further references

Zhao, T., Lu, Y., Wang, V. L., Wu, B., Chen, Z., Song, W., & Zhou, L. (2023). Shared but unhappy ? Detrimental effects of using shared products on psychological ownership and consumer happiness. Journal of Business Research, 169, 114306. https://doi.org/10.1016/j.jbusres.2023.114306

Graul, A. R. H., Brough, A. R., & Isaac, M. S. (2022). How emotional attachment influences lender participation in consumer-to-consumer rental platforms. Journal of Business Research, 139, 1211‑1217. https://doi.org/10.1016/j.jbusres.2021.10.064

Business models seem to be often neglected by the companies themselves. Various factors can lead to this neglect. In particular, the lack of leadership to innovate or improve the business model. As explained in the introduction, a good business model is much more important than a new technology. So, companies are wrong to neglect this because it can bring a real advantage, an added value to the company.
An example which testifies here to the negligence of a large proportion of companies in developing the business model is that often no one is actually responsible for the innovation of the business model. What is certain is that it requires the involvement of top management
If it is difficult for a company to answer some questions, it is probably because it has not sufficiently defined the responsibilities of everyone in the business model development process. In this case, the development is given too little consideration, which is not optimal for the company in general. It is therefore important for the manager to draw up a concrete and comprehensible plan within the top management.
Indeed, the fact that everyone knows what they have to do means that the workers who are more involved in developing the business model have a good grasp of this area. In this way it will be possible to assess the framework of the business model. By knowing what stage the company is currently in, it will be possible to imagine an improvement in the business model thanks to the attributes of the next stage which will allow the manager to have the right guidelines.

First of all, it is important to involve employees in the creation of the business model because employees are often left out and only the opinion of a limited number of people are taken into account. By regularly taking the opinion of the employees, the manager shows them the importance they have for the organisation.
The business model framework is a frame which is static. The business model, on the contrary, is something dynamic and constantly changing. The current situation has shown us that many business plans have been challenged because of the pandemic. It is important to note that the parameters of the business model change regularly and therefore a manager has to make constant adjustments to the model in order to use it for running the business.
The last limitation is the limited usability for different sorts of organizations. The Business Model Canvas is formed around profit generation. This excludes non-profit and governmental organizations. Organizations which aim at other values such as Social Value cannot be designed with the Business Model Canvas.

Further references:
Brem, A. V. K. T. M. (2018, 2 février). Business Models For Corporate Innovation Management : Introduction Of A Business Model Innovation Tool For Established Firms. International Journal of Innovation Management. https://ideas.repec.org/a/wsi/ijimxx/v22y2018i01ns136391961850007

Remané, G. (2019). The Business Model Pattern Database : A Tool for Systematic BMI. International Journal of Innovation Management. https://link.springer.com/chapter/10.1007/978-3-319-98723

Managerial implications
We have identified three implications that managers should consider. Firstly, they should ensure that their business model succeed both the narrative and the number test. The first one underlines that the story has to make sense to both consumers and partners and that every motivation has to be taken into consideration. The second test consists of making sure that profits stay bigger than losses. The second implication is the importance of making a clear distinction between a business model and a strategy in order to improve both of them. However, this distinction is not easy to perceive in every case. The business model should describe how the pieces of a business fit together while the strategy focusses on how to be different and preferable, compared to competitors. The last implication suggests that while building a business model, managers should follow a scientific method in the sense that they will first formulate a hypothesis, which will then be tested in practice and revised when necessary.

Limitations
We have identified 3 limits to these managerial implications, regarding the successful implementation of a business model.
Firstly, in order to create a successful business model, company must focus on customers and the value proposition that it can offer them. However, it is essential for the company to look at the interests of all its stakeholders and not just the interests of the end customers, especially in a B2B situation. Secondly, the article highlights the importance of telling a good and credible story. However, the moment when the company decides to tell the story to its consumers is also crucial to the success of a project. In the case of the GoPro Hero4 product launch, the company’s business model was in place, they told the right story to the right people, but the timing was not right. This mistiming caused the failure of this product.
Finally, the article does not mention the case of two or more business models existing in the same company. Indeed, two effective business models could prove to be a total failure if they co-exist within the same company. In this case, it is complicated to follow the recommendations given by the article.

Further references
Kavadias, S., Ladas, K., & Loch, C. (2018). The transformative business model. Harvard business review, 90-98. https://hbr.org/2016/10/the-transformative-business-model?ab=at_ articlepage_relatedarticles_horizontal_slot2&registration=success
This article demonstrates that a technology alone is not enough to transform an industry and highlights 6 characteristics that are positively correlated with a company’s chances to successfully change the industry.

Ovans, A. (2020, 17 novembre). What Is a Business Model? Harvard Business Review.
https://hbr.org/2015/01/what-is-a-business-model?ab=at_articlepage_relatedarticles_horizontal_slot2
The author explains that the concept of “Business Model” is often defined and used in different ways by business thinkers. According to him, how people define the term depends on how they use it.

How to build a business that lasts 100 years. (2016, 9 août). [Vidéo]. TED Talks. https://www.ted.com/talks/martin_reeves_how_to_build_a_business_that_lasts_100_years#t-263609
In this video, Martin Reeves explains how managers can build companies that are resistant to change and prosper in the long term by applying 6 principles derived from living organisms.

Based on this article, we could remark that executives don’t find strategic planning processes important. No one is really sure why they do it, it’s similar to tribal ritual and everyone just expects that something good will come out of it.
It’s true that that real strategy is made in an informal way, for example, in hallway conversations, in working groups, and in quiet moments of reflection on long plane flights and rarely in the paneled conference rooms where formal planning meetings are held.
But, actually, formal planning is not necessarily a waste of time. If it is approached with the right goal in mind, this can be a real source of competitive advantage, using strategic planning not to generate strategic plans but as a learning tool to create “prepared minds” within their management teams. And why is this a source of competitive advantage? Most of companies’ strategic decisions are made in real-time. If the company is in an unpredictable environment or facing issues, the only way to act in a strategic way is to be well-prepared.
As a former senior executive at GE Capital once said, companies react poorly under pression, because they are not well prepared, discussions are very focused on CEO’s opinions.
So, summarizing, the goal of a strategic planning process should not be to make strategy but to build prepared minds that are capable of making real-time strategic decisions.
But how do we create these prepared minds?

Implications :

So How do we want to create prepared minds. We want really to focus on information sharing here. So first of all we need to review the standard formal meetings. We want acually to move from “review of the CEO to conversations between business unit members and corporate leaders.

Then, to obtain efficient meetings where everyone can speak and be listened to the numbers of people attending the meetings should be reduced between 5 and 10 people, often these people are of course the CEO and the business unit head, sometimes ther are joined by the HR, the CFO and senior executives. The natural reaction of managers is often that meetings should not last more than 3 hours, but in this case when looking at the amount of time corporate leaders are meant to put in strategy it is really okay to have several day-meetings so that all subject can be covered.
So Where should the meetings take place ?
To reduce mobility and distraction the meetings should have place in the business unit site. So that the business unit member really feel valorised by the CEO coming to their department to discuss with the head, it provides good signs.
Then, what should be discussed during thesse meetings, it is important to discuss the LT, it is the strategic viewpoint of the conversations and not interfere that LT view and discussion with ST problemes like finances and budget. The ST matters are to be discussed in separate meetings and the afterwards merged with the LT vision.

As we can see there are a lot of guidelines to prepare the staff’s minds. But can we talk about a standard culture to have inside the company, actuallly ther isn’t, there are only some guidelines to follow to come near an acceptable company culture. For example during the meetings the people should’nt be afraid to challenge existing strategies in front of the corporate leaders. In this interaction there shouldn’t be interferences. For example in a lot of departments there is a lot of stuff going on the department don’t really want the corporate leaders to know about, so the both sides should reeally try to keep a transparent conversation, one not being afraid of telling the whole story and the other side not playing the inspector trying to find out about department’s mistakes. The members of the meetings should also look for opportuniities wherever they can, and find out weaknesses, let’s not forget that these meetings are principaly future oriented and it is the nature of prediction that is interesting., Finally consensus-oriented meetings are to be avoided.

So What should the corporate leaders do ?
They need to be well prepared and give the opportunity of the business unit to be also , that can be done by providing the department a list of demands to be prepared in advance to ensure efficiency? The CEO plays a very important role, as not all the company assists these meetings he has to show a form of commitment to the meetings as I said before by for example going himself to the department site and not just summon the departments head to his office… Perception by “lower” company workers is really important here. Not to forget that the CEO should really bring his main goals to the meeting and try to incorporate them in the LT vision.

All these recommendations for managers as well as corporate leaders are really focused on achieving a meeting where, srategy is put in place in a future oriented view. The aim here is to be prepared and able to make strategic decisons in unpredictable environments like mergers or new business opportunities.
In the paper an example was given of an automotive production company that succesfully acquired German acquisition because the corporate leaders had the previous year had meetings about expanion in Europe, it was a competitive advantage in comparison to other companies.

Limitation :
– As a first limitation, we can see that there are only two essential participants in the review of a business unit’s strategy: the CEO and the head of the business unit. All others should only be included if they are really a decision-maker.

– Changing the process requires changing attitudes and culture throughout the company, which is no small task. Companies also tend to underestimate the degree of resistance they will receive from business units, which often see the willingness to implement a new process as a threat, another demand on their time and an excuse for greater interference from the business centre.

– Not for everyone, it only concerns large companies with large hierarchical structures, whereas in Belgium we stay in a country where most companies are SMEs.

– When they do their experimental, they say they test the strategic planning process but how can they see if it really works? They don’t have the perspective. They should be in the long term but are they really? Limit of impact.

Further References :
1. Bouhali, R. & Mekdad, Y. & Lebsir, H. & Ferkha, L. (2015), Leader Roles for Innovation: Strategic Thinking and Planning. Procedia – Social and Behavioral Sciences, 181, 72-78.
2. Fairholm, M. (2009), Leadership and Organizational Strategy. The Innovation Journal: The Public Sector Innovation Journal, 14(1), article 3.
3. Mueller, C. & Naffziger, D. (2015). Strategic planning in small firms: activity and process realities. Journal of Small Business Strategy, 10(1).

The first two reading allow us to go further and to differentiate strategic planning and strategic thinking. The third reference shows us that SME’s use strategic planning as well and confirms one of the limits of the paper.

Key points

The first thing the article tells us is that most of the development projects in a firm are minor innovations. These small projects, which the author calls “little i” innovations, are necessary for continuous improvement, but they don’t contribute much to profitability.
It’s the risky “Big I” projects—new to the company or new to the market—that can generate profits. According to one study, only 14% of projects were major innovations, but they accounted for more than 60 % of all profit from innovations. However, people often believe that big projects are too risky and their rewards (if any) will come too far in the future.
The solution to this paradoxal problem is to pursue a process that will find a compromise between risk and profit. The article shows two tools, used in tandem, that can help companies build a balanced portfolio of projects. The first, the risk matrix, will graphically reveal risk exposure across a portfolio of innovations. The second, the R-W-W (“real, win, worth it”) screen, built on a series of questions about the innovation, its potential market, the company’s capabilities and competition, can be used to evaluate individual projects.

Implications

There are 3 actions on which managers should focus more in order to develop a more balanced portfolio of projects and build a better business model.
First of all, it is very useful for managers to use the risk matrix tool. In this exercise, it is important that managers work closely with the development teams of each project. Indeed, their purpose is to evaluate projects independently and to better understand the risk associated to them. Better communication will thus allow them to share different points of view and find a consensus on which projects they will chose to keep at the end. But the scores obtained, which will allow them to place projects on the matrix, require a thorough knowledge of the subject. This is why it is so essential that managers initiate dialogue and take into account their opinions.
The second tool that managers should use is the screening process. It is now well known that for a project to be successful, it must correspond to the company’s culture and be led by a suitable, motivated and charismatic manager. Their role as managers is therefore to energize the development team, to help them overcome the obstacles they will encounter, and so on… However, it is essential that managers be careful not to be blinded by their enthusiasm or their fear of failure and not to bias certain results that confirm the validity of the project. So, when managers do this screening process exercise, they have to question themselves at every step to be sure not to distort any results.
A final action that managers should take is to highlight partnerships with people with more expertise in the field. Indeed, whether it is for the first or second tool you have been told about, it is sometimes easier to call on a company that has market or technology expertise that the company lacks, to better understand in depth the risks associated with the project and to find solutions if possible.

Limitations

First, the quality of information and the evaluation of information by the manager during the different phases of a project seems to be key points in order to allocate project resources and to decide whether a project should continue or not. However, this concept could not be applied in some companies in which managers focus too much on theory and prefer to evaluate their project only with valuation methods such as net present value (NPV) and discounted cash flow (DCF) without continuously reviewing the project and taking new informations into account. Moreover, when they are reassessing a project throughout its evolution, the managers will have to be careful to find the right sources of information, which means finding the right contacts. Finding good contacts can be complicated for different reasons such as a lack of expertise within the company, a contact network that could be too small or the fear of disclosing an R&D project. These elements could prevent managers from having enough information to better manage their project.
Secondly, the second implication emphasized that the manager should focus on learning of the research team by evaluating what has been learned at the end of a project. The limit of this implication is that developing new technology in the pharmaceutical sector is equivalent to acquiring new knowledge, but knowledge is not quantifiable precisely. There is no metric to evaluate what a project has really brought to the research team in terms of learning.
Finally, the third implication suggests that managers have to choose the right people to evaluate a project correctly. These people could be outside experts, representatives from several levels of management, as well as peers from other project teams. The limitation here is that this managerial implication will not be applicable in all types of companies. Large companies have the financial means to pay outside experts and they have enough management levels to bring together several representatives to evaluate a project. However, if we consider smaller companies and start-ups this is not especially the case. Their financial and human resources are often more limited. They don’t always have the possibility to find enough and the right people.

Further references

-Coleman, T. (2011). A Practical Guide to Risk Management. Virginia :The Research Foundation of CFA Institute.

-Li1, Z. P., , Yee Q. M. G., Tan P. S., Lee, S.G. (2013). An Extended Risk Matrix Approach for Sup- ply Chain Risk Assessment. IEEE International Conference on Industrial Engineering and Enginee- ring Management.

-Day, G. (2013). Find innovation succes with the “REAL-WIN-WORTH IT” screen. University of Pennsylvania. Retrieved from https://executiveeducation.wharton.upenn.edu/wp-content/uploads/ 2018/03/1306-Find-Innovation-Success.pdf.

Several implications can be derived from these insights. (1) Managers should use the modified business model canvas as this incorporates not just more detailed internal aspects but also helps to keep highly important external aspects in sight. The more aspects are scrutinized the easier it is to make realistic assumptions and hence to promote innovation success.
(2) While doing it, managers need to intensively invest time on all parts of the business model canvas, especially being aware that the aspects that seem to be similar to the known business models, might be in fact very different. Too often, the area that feels familiar to the project teams are not enough studied in the initial evaluation for the new growth opportunities and can lead to failure.
(3) Even with an intensive analysis of the modified BMC, wrong assessments are still possible. Therefore, managers should further try to develop the new business at a speed that allows them to identify wrong assumptions as quickly as possible and to resolve them as soon as possible.

Nevertheless, some limitations to these implications can be identified. (1) Even though the modified BMC helps managers to not lose sight of (nearly) all of the aspects that determine the success of an outside-the-core innovation project it might be too complex for less experienced managers to apply. The original BMC was composed in a way that allows to balance completeness (which is linked to complexity) and ease of use. A more complex tool is only helpful as long as it can be applied successfully. Therefore, especially those managers who do not have experience with the concrete application of the standard BMC should master that first in order to get an advantage out of the modified version.
(2) Another limitation of these implications is that sufficient time to experiment and grow slowly might be scarce due to internal and/or external reasons. Especially in large companies, new projects are often linked to certain growth requirements (like early on sales or margin targets) in order to be approved. These growth requirements could hinder the project in growing at the necessary speed that allows for efficient learning and modification. An external factor that might hinder managers to exhaustively test new business models is intense competition. Especially when there is a first-mover advantage and competition around it is harsh, growing a project slowly might not be an option.

Further references:
• Trapp, M., Voigt, K., & Brem, A. (2018). BUSINESS MODELS FOR CORPORATE INNOVATION MANAGEMENT: INTRODUCTION OF A BUSINESS MODEL INNOVATION TOOL FOR ESTABLISHED FIRMS. International Journal of Innovation Management, 22(1) Retrieved from https://search-proquest-com.proxy.bib.ucl.ac.be:2443/docview/2003000605?accountid=12156
• Giesen, E., Riddleberger, E., Christner, R. and Bell, R. (2010), “When and how to innovate your business model”, Strategy & Leadership, Vol. 38 No. 4, pp. 17-26.
• Business model innovation – beating yourself at your own game. Stefan Gross-Selbeck. (2014). TedxTalk. Retrieved from https://www.ted.com/talks/stefan_gross_selbeck_business_model_innovation_beating_yourself_at_your_own_game

Managerial implications: Regarding the managerial implications, it is essential to highlight that a new business model should not be the initial goal of a company, but whether the by-product of a process that maximizes the meeting of the consumer’s need. Indeed, this can be a complicated process to implement, but if successful, it can provide a lot of benefits. An example was proposed by Netflix, a few years ago, which destroyed the former worldwide leader of video rental, Blockbuster.

However, this process must answer to the changes in the environment. That’s why it should be free from any constraints the innovators face. It means that building a new business model should not be constraints by lack of resources, for example. Developing a new business model involves aligning three decisions:

What do customers want?

What can the company deliver?

How can the company make money delivering it?

The company needs to focus on the broader problem its customers have and not only on the part the company addresses. By following all the steps of the process, the company can identify all the problems customers might encounter, document the full set of activities associated with the problem’s solution. The company also needs to consider the possible external changes that might be emerging and could significantly change the customer’s needs or even create other customers, for instance, new technologies, new market preferences or new regulatory policies.

Given that the company already identified customer’s struggles, it needs to decide which activities might take on, considering its current capabilities and which needs to acquire or develop, and simultaneously, which activities the company might take control over by bringing in external partners into its business. An example to illustrate this matter, is the partnership between Nike and Apple, settled in 2006, that brought together music and sports activities.

Finally, managers have to shape and implement a revenue model to guarantee the new business become profitable. It is important to make it as best as possible since it determines the way consumers perceived the costs. It is a difficult task, which have several key questions, as if the team has enough capabilities? What are the costs and key risks? Can the technical system support the new offer? When the new business model will recoup the costs?

Limitations: The first limitation concerns the decision (What your customers want?). In fact, it is useful for the company to focus on the larger problem they have. But we think it’s not enough to just ask what the customers want. The challenge for the company is to anticipate future needs because the customer may change their minds.

Finally, not all business models are created equal. The question “How you can make money delivering it?” cannot apply to every business model innovation. Sometimes, innovative companies are not profitable, and this is not their goal. For example, some organizations might take the decision to allow their content to be freely available on the Internet. But, even for these organization, it’s important to assess the financial aspect. That’s why the question should change with “How much?” including the required resources or the revenue model.

Further references:

Stampfl, G. (2015). The Process of Business Model Innovation: An Empirical Exploration. Retrieved from http://hdl.handle.net/2078/ebook:103095

Ebel, P., Bretschneider, U., & Leimeister, J. M. (2016). Leveraging virtual business model innovation: a framework for designing business model development tools. Information Systems Journal, 26(5), 519‑550. https://doi.org/10.1111/isj.12103

Kim, S. K., & Min, S. (2015). Business Model Innovation Performance: When does Adding a New Business Model Benefit an Incumbent? Strategic Entrepreneurship Journal, 9(1), 34‑57. https://doi.org/10.1002/sej.1193

Rayna, T., & Striukova, L. (2016). 360° Business Model Innovation: Toward an Integrated View of Business Model Innovation. Research-Technology Management, 59(3), 21‑28. https://doi.org/10.1080/08956308.2016.1161401

– Key insights (“What?”):
1) WHERE DID THE BUSINESS MODEL COME FROM AND HOW HAS IT DEVELOPED?
Even if the term business model has been present in scientific discussions for over fifty years now, there is still a very heterogeneous comprehension of the concept.Today, there is an increasingly converging view of the concept among authors but still no accepted definition of it. Yet the majority of the authors understand a business model as a link between strategy and process management.

2) WHAT IS A BUSINESS MODEL ANYWAY AND WHAT DOES IT CONSIST OF?
After a background in the literature, we define business model as a simplified and aggregated representation of the relevant activities of a company. The ultimate goal of a business model is to generate or secure a competitive advantage of a company. It is capital to be conscious that there may be a need for business model evolution or innovation, due to internal or external changes over time. Moreover, we learn that there exist many components of business models, which can be gathered through strategic components, customer and market components, and value creation components.

3) WHAT IS THE FOCUS OF CURRENT RESEARCH AND WHAT ARE THE IMPLICATIONS FOR FUTURE RESEARCH?
In scientific research, business model receives continuously increasing attention, even if it is at an early stage yet. We can mention three important areas of research, which are about the concept, the structure and the management process of business models. One of the main question to be answered in future research is how to determine the quality of a business model, and so far the studies have had lots of trouble with that.
—————
– Managerial Implications (“So What?”):
Having a business model is essential for companies, it acts as a road map of the value creation. But it is not a theoretical document, it must lead to concrete actions and therefore it is important to consider the following elements.
1) FIRST, IT IS HARD TO FIND AN UNIVERSAL BUSINESS MODEL
All companies must have a BM, regardless of their size, their value creation, their age or their clients. And if components of the BM must be chosen carefully, even the scientists don’t totally agree on what the components a BM should include. Nevertheless, some key elements are considered as essential: the strategy, the material and immaterial necessary resources, a network-oriented view, the importance of the customers, the value proposition and the revenue model.

2) DYNAMISM OF THE BM
Then, the second managerial implication of the article is the dynamism of the business model. Indeed, a BM is not frozen and must be considered as evolutive. New sources of sustainable competitive advantage can often only be reached from BM reinvention. The innovation by the BM is based on a disruptive innovation. For example, Ryanair did it by inventing the low-cost aviation. The value chain, the customer relation, all was different from a traditional airline company. Moreover, the entire economic ecosystem can change (with a deregulation, or new technology for example). So, it is important to regularly make a structural revision of the BM.

3) UNDERSTANDABLE BM REQUIRED
Finally, the third implication is to establish a logical and understandable BM. Scientists are still discussing about the definition and the content of a good business model and there are several articles which deal with that, but it is not only a conceptual topic. Entrepreneurs need to have a functional BM. For the moment academic researches didn’t highlight the essential success factor of a BM but the only remarkable thing is that they were all flexible.
—————
– Limitations:
1) ASSESSING QUALITY (OF THE BM)
The quality of the business model is not directly measurable. How can we then ensure quality and reliability of the BM? Different researches have been made about this topic but there doesn’t seem to be a clear consensus about the success criteria of a BM. For example, in other research fields there’s some sort of consensus about using SMART criteria. But there’s no equivalent to business models.

2) BUSINESS MODEL IS BASED ON ASSUMPTIONS
A BM simplifies the business to be “understandable”. This implies that the BM is based on assumptions. If some of these assumptions appear to be false, it could have some incidence on the validity of the BM. Some examples of the assumptions that are typically made; access to capital; ressources; customers: needs, perceptions, purchasing behavior; interest rates & exchange rates; stable economic & political environment; laws & regulations.

3) DYNAMIC BM IN PRACTICE
It seems very clear that dynamism is needed. But in practice it seems less clear about how dynamism needs to be managed. When should the company take action and adapt or reinvent its BM? How to know if an adaptation will be enough or if a total reinvention is needed?
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– Further references:
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https://www.youtube.com/watch?v=xwwtkMdFYHE
Video on the conference about the “collaborative economy and new business models’ challenges” organized by the ACCA (Association of Chartered Certified Accountants), UEAPME (European Association of Craft, Small and Medium-sized Enterprises) and European Movement International Brussels. They debate about the opportunities and limits of new business models.
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ACCA (2018), Business models of the future: systems, convergence and characteristics
Report on the “business models of the future”, exploring “what lies behind business model innovation”. What are the trends leading the organizations to rethink their business models? Currently, a systematic way of thinking for the long-term is required to create “new sources of value”.
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Business models and dynamic capabilities, David J. Teece, Long Range Planning, Volume 51, Issue 1, 2018, pp. 40-49.
Explains the interdependence between business models, dynamic capabilities and strategy. Dynamic capabilities and business models reinforce each other and define what strategy is feasible for the company.
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A dynamic business modelling approach to design and experiment new business venture strategies, Federico Cosenz, Guido Noto, Long Range Planning, Volume 51, Issue 1, 2018, pp. 127-140.
This article addresses the too static representation of business models. This perspective can prevent from “identifying the most effective strategies”. So the authors propose a combination of the conventional and a dynamic method to build business models.