Business model

A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity.

[3] Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily successful growth firms.

The 1970s saw new business models from FedEx and Toys R Us; the 1980s from Blockbuster, Home Depot, Intel, and Dell Computer; the 1990s from Southwest Airlines, Netflix, eBay, Amazon.com, and Starbucks.

In addition, the rise of outsourcing and globalization has meant that business models must also account for strategic sourcing, complex supply chains and moves to collaborative, relational contracting structures.

Gerry George and Adam Bock (2011) conducted a comprehensive literature review and surveyed managers to understand how they perceived the components of a business model.

[3] In that analysis these authors show that there is a design logic behind how entrepreneurs and managers perceive and explain their business model.

In further extensions to the design logic, George and Bock (2012) use case studies and the IBM survey data on business models in large companies, to describe how CEOs and entrepreneurs create narratives or stories in a coherent manner to move the business from one opportunity to another.

Berglund and Sandström (2013) argued that business models should be understood from an open systems perspective as opposed to being a firm-internal concern.

[12][13] Sangeet Paul Choudary distinguishes between two broad families of business models in an article in Wired magazine.

In an op-ed on MarketWatch,[16] Choudary, Van Alstyne and Parker further explain how business models are moving from pipes to platforms, leading to disruption of entire industries.

Chen (2009) stated that the business model has to take into account the capabilities of Web 2.0, such as collective intelligence, network effects, user-generated content, and the possibility of self-improving systems.

[18][need quotation to verify] Jose van Dijck (2013) identifies three main ways that media platforms choose to monetize, which mark a change from traditional business models.

Eric K. Clemons (2009) asserts that consumers no longer trust most commercial messages;[20] Van Dijck argues platforms are able to circumvent the issue through personal recommendations from friends or influencers on social media platforms, which can serve as a more subtle form of advertisement.

Finally, a third common business model is monetization of data and metadata generated from the use of platforms.

For example, the International Accounting Standards Board (IASB) utilizes an "entity's business model for managing the financial assets" as a criterion for determining whether such assets should be measured at amortized cost or at fair value in its International Financial Reporting Standard, IFRS 9.

[31][32][33][34][35] In its 2016 lease accounting model, IFRS 16, the IASB chose not to include a criterion of "stand alone utility" in its lease definition because "entities might reach different conclusions for contracts that contain the same rights of use, depending on differences between customers' resources or suppliers' business models.

Al-Debei and Avison (2010) consider value finance as one of the main dimensions of business modelling which depicts information related to costing, pricing methods, and revenue structure.

Stewart and Zhao (2000) defined the business model as "a statement of how a firm will make money and sustain its profit stream over time.

Daas et al. (2012) developed a decision support system (DSS) for business model design.

Business model frameworks represent the core aspect of any company; they involve "the totality of how a company selects its customers defines and differentiates its offerings, defines the tasks it will perform itself and those it will outsource, configures its resource, goes to market, creates utility for customers, and captures profits".

The standard terminology and examples of business models do not apply to most nonprofit organizations, since their sources of income are generally not the same as the beneficiaries.

[61] The model is defined by the organization's vision, mission, and values, as well as sets of boundaries for the organization—what products or services it will deliver, what customers or markets it will target, and what supply and delivery channels it will use.

[63][64] There is a range of reviews on the topic,[62][65][66] The concept facilitates the analysis and planning of transformations from one business model to another.

BMA could fit any organization, but incumbents are more motivated to adapt their current BM than to change it radically or create a new one.