Academic journal article Journal of Theoretical and Applied Electronic Commerce Research

Business Model Dynamics: A Case Survey

Academic journal article Journal of Theoretical and Applied Electronic Commerce Research

Business Model Dynamics: A Case Survey

Article excerpt


In the turbulent world of e-commerce, companies can only survive by continuously reinventing their business models. However, because most studies look at business models as snapshots in time, there is little insight into how changing market-related, technological and regulatory conditions generally drive revisions in business models. In this paper, we examine which types of external drivers are strongest in forcing business models to change throughout their life cycle. To do so, we study 45 longitudinal case descriptions on business model dynamics of (networks of) organizations in various industries. The results of this survey indicate that technological and market-related forces are the most important drivers of business model dynamics, while regulation plays only a minor role. In particular for start-ups, the effect of technological and market-related drivers is the strongest in the early stages of a new business model, while the effects are moderate over time for established, large companies. Our results provide clues to practitioners on what external factors to take into account in different stages of business model design and redesign.

Key words: Business models, Business model dynamics, Business model design, Start-ups, Case survey

1 Introduction

To keep up with changing technology, as well as market-related and regulatory conditions, organizations have to revise their business models over time [13]. Design choices that appear to be solid when an initial product or service concept is developed often have to be adapted when the product or service is launched and exploited commercially. Although these changes are to a certain extent endogenous in nature, they are to a significant degree caused by external drivers.

While the need for business model reinvention is well-known [6], there is a considerable focus on studying business models at a certain moment in time. Although recent research has provided some clues about business model dynamics [2], [11], [22], the exact relationship between external forces and the business model design choices firms make remains an unexplored area. Insight into how external events affect business model dynamics would help practitioners keep their business models adaptable and flexible over time. In addition, it would help refining and focusing methodologies for business model (re)design (e.g., [3], [16]). In this paper, we examine what types of external drivers are most important during the subsequent phases of business model life cycles. We look at the business models of (networked) organizations to see how they change over time as a consequence of external drivers, focusing more on the drivers than on the business models as such. To do so, we conduct a case survey [10], [23] involving a large set of existing case descriptions.

In section 2, we provide a brief overview of business model and phasing model literature, and present our research model in section 3. In section 4, we discuss our methodology, and in section 5 we report our results. We close by addressing the limitations of our study in section 6, and presenting our conclusions in section 7.

2 Literature Review

2.1 Business models

The concept of business models has its origins in various fields, including computer science, e-business, strategy, supply chain management and information systems [8], [20], and was developed mainly as a response to the need to explicate the value of ICT-driven innovations for organizations. Studying business models serves various purposes, such as understanding the elements and their relationships within specific business domains, communicating and sharing this understanding with the outside world, using the business models as a basis for change, measuring the performance of organizations, simulating and learning about e-business, experimenting with and assessing new business models and changing and improving the current way of doing business [14] - [15]. …

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