Dr. Dirk Schneckenberg – he is Associate Professor at ESC Rennes School of Business, Strategy and marketing Department.
Prof. Dr. Joan E. Ricart – professor at IESE Business School University of Navarra, currently he is professor of economics and strategic management. Also, he is IESE’s head of Strategic Management Department.
The article was published on ResearchGate, section: R&D Management, June 2014
In this article, the focus is on 3 detailed perspectives: “explaining the business”, “running the business” and “developing the business”. Business model innovation was discussed in many reviews of business literature, with many characteristics, , but in 2005, Morris defines them by dividing it in 3 parts – economic, strategig and operational. Also, Schneider and Spieth categorized in 2013 the literature of business model innovation as being categorized on 3 main topics: prerequisites of conducting business model innovation, elements and process of business model innovation, and effects achieved through business model innovation.
The authors claim that, after going through many articles in the literature of business model innovation, they concluded that there is necessary to “focus on the roles and functions assigned to the concept”, in order to better understand and develop a business model.
As I already mentioned at the begining, there are three ways that have to be applied in order to better understand the business and inovate it, explaining the business, developing the business and running the business.
Explaining the business – This step appropaches the idea that the firm has to be known and understood by new people, to be explained in this way how it may generate future profits, why it will and eventually when. In this way, the target audience is external stakeholders of the firm (media, customers and parteners, investors and even internal employees). The associated terms with this topic were identified as the following: “Abstraction”, “Description”, “Outline”, “Reflection”, “Represantion”, “Statement” and “Story”
Running the business – Refers mainly at the operational roles of business models. In this way, the business model in understood to adress operational aspects to the employees, managers and external parteners, such as the linkages or structures. The associated terms found for running the business in the article were: “Activity system”, “Architecture”, “Framework/standard”, “Structural template/blueprint”, “Method”.
Developing the business – That part represents the strategic function of the business model, which has to support the management in defining and developing the firm’s strategy. Associated terms: “Approach”, “Design/plan”, “Logic”, “Model/conceptual tool”, “Recipe”, “Set of choices and consequences”.
Somehow, the authors concluded these role-based appropach as an alternative view to summarize the phenomenon of business models, as a reason to get a more concise grasp on subsequent processes of business model innovation. However, they note that they are aware that this topic is pretty new, and it may appear many new ideas and comments on this topic in the future, as it appeared until 2014, when they published the article. In this way, they do not assume that the topic can be closed now, mentioning that the idea is still “premature” and it may have to be discussed in the future too.
They used mainly the articles published to the 2013 Conference of the European Academy of Management (Instanbul, Turkey), the 2013 R&D Management Conference (Manchester, United Kingdom) and the 2013 International Society for Professional Innovation Management Conference (Helsinki, Finland). In all of the conferences and publication activities, they presented the business model innovation as a topic managed to be represented by 3 main keys, which construct a triangle: strategy, innovation and entrepreneurship.
In conclusion, the research avenues presented by the authors in this article are suggestive and definetely not complete, as well as they mention it in the concluding part of the article. The management and succesful innovation of business model is consolidating as one fundamental source for competitive advantage in the 21st century. The topic is relevant, the potential of the idea is great (as said by the authors too) and also the research field deserves further research and development.