Academic journal article Journal of Applied Management and Entrepreneurship

Creating a Balanced Value Proposition: Exploring the Advanced Business Creation Model

Academic journal article Journal of Applied Management and Entrepreneurship

Creating a Balanced Value Proposition: Exploring the Advanced Business Creation Model

Article excerpt

Introduction

There is a deficiency in the literature concerning conceptual models for the establishment of start-ups that connect entrepreneurship, business models, strategic planning, and business plans. This type of model could assist entrepreneurs in creating new organizations and simultaneously discerning the significance of the different stages in the development of their ideas. The entrepreneurial attitude should be consolidated on the basis of market research and market orientation to create new products and services that satisfy human needs and desires. This leads to a business model design that proposes a method whereby the entrepreneur can produce and deliver a balanced value proposition to the market. The entrepreneurial process and the business model could be embedded into a strategic plan and, most times, into a business plan. Thus, an elaborated business plan includes a strategic plan which subsequently leads to a business model. These can be considered the result of an entrepreneurial process.

Work by Moroz and Hindle (2012, p.781) indicates that the "extant models of entrepreneurial process are highly fragmented in their claims and emphases and are insufficient for establishing an infrastructure upon which to synthesize an understanding of entrepreneurial process". They conclude that it is urgent to develop a single harmonized model of the entrepreneurial process and present a taxonomy of entrepreneurial process models that categorizes them, e.g., into Stage Models, Static Frameworks, Process Dynamics, Quantification Sequences, and others. We utilize their taxonomy and propose that our model can be regarded as a Dynamic Phased Model, because it represents 15 increments with a circular process during the first four crucial phases, as we will see in Figure 1 in the next section. Thus, our aim is to systematize and conceptualize the most appropriate method to support entrepreneurs in the initiation of a new venture. Moroz et al. (2012) also mentioned that there are particular points of agreement among researchers, such as the importance of the relationship between individuals and opportunities; the assessment of the transformative and disruptive value of knowledge; the importance of acting on time; the commitment to action; the context; and the emphasis on the way the value for stakeholders is created by designing new business models.

There are various approaches to the concept of business models (see Osterwalder, Pigneur & Tucci (2005), and Zott, Amit, & Massa (2011), for an extensive literature review). Our goal is to integrate the flow of decisions based on a value proposition which subsequently leads to a model that puts together important concepts in a systematized way. This model points out a holistic view about venture creation and organizational development with a balanced value proposition. It begins with an entrepreneurial phase, followed by the creation of a business model that may evolve through strategic planning in order to end with a business plan. The integration of several approaches to the concept of value, the proposal of a broader and balanced view of value proposition, and the inclusion of many important concepts that were missing in other models are also a contribution to the literature. The use of the ABC model will also be an opportunity to enhance research over strategies followed by different types of entrepreneurs, and to find new ways to help them to be successful. Moreover, the ABC model can also contribute to strategic thinking about entrepreneurial learning and teaching.

Osterwalder et al. (2005, p.17) consider that a "business model can be seen as the conceptual link between strategy, business organization, and systems". Our approach contends that a business model is the link between market opportunity and the objectives of an organization. Of course, business model implementation through a strategic plan includes all of those dimensions in relation to goals or objectives and for various stakeholders. …

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