The article in question is a study of four business models (Malone et al. 1). However, the authors seek to find which of the four models is better than the others based on asset rights. The authors sample at least 10,970 companies that have traded publicly between 1998 and 2002 across the United States (Malone et al. 1). The sampling of the companies is determined by three financial performance factors that include market value, profitability, and operating efficiency.
In addition, the study evaluates six measures of financial performance as subjected to business models. The most common business models are manufacturers, distributors of physical assets, brokers of financial assets, and physical distributors (Malone et al. 1). The authors conduct theoretical background research on the concept of business models. Conventional scholars categorize business models based on profit and non-profit ventures (Stern and Hicks, 12).
Other models are based on e-business taxonomies. In this context, major elements of e-business models include product, services, information flow, business stakeholders, and source of revenue. There are business models that are defined on the basis of suppliers, distributors, and customers. Another definition of business models is founded on two fundamental aspects. In the first dimension, business models are categorized as creator, distributor, landlord, and broker (Malone et al. 4).
In the second dimension, business models are categorized as physical, financial, intangible, and human (Malone et al. 4). Classification of business models follows predetermined typology criteria (Malone et al. 5). In fact, the typology criteria determine which business model is better than the other. The typology criteria entail the aspects of intuitively sensible, collectively exhaustive and mutually exclusive, construct validity and conceptually elegant.
As indicated earlier, a business model is also determined by the types of rights being sold. In this case, the authors review the type of rights in question: the right of ownership, the right to use an asset, and the right to be matched for sale. From this perspective, four basic asset rights models are derived. The asset rights models involve a creator, distributor, landlord, and broker. The authors provide a distinctive definition of the four basic asset rights models, as well as compare the same.
On the other hand, business models can be determined by evaluating the type of assets involved. In this context, four assets in this category are classified as physical, financial, intangible, and human. Again, the article gives an in-depth description of the assets. Finally, the study focuses on the description of 16 types of business models. In each business model, the authors describe the functions of each and compare the same with others from a professional perspective (Malone et al. 16).
As indicated earlier, the study of business models samples companies across the United States with the intention of evaluating their financial performances (Malone et al. 16). In this study, the researchers use the recorded revenue figures as a guide. The authors reveal that there are no standard measures for financial performance. Therefore, many of the companies use a wide range of measures to determine the financial performance and position of the firm. For this reason, market value, profitability, and operating efficiency are deemed critical in assessing financial performance.
The research findings imply that the distribution of business models between 1998 and 2002 across the sample companies depended on sales. In this context, creators emerge as the most popular business model, with total revenue of 49.6% (Malone et al. 17). The landlord is the second best business model under the sales factor. However, distributors and brokers are other examples of best performing models under the sales popularity factor.
The best performing business model based on asset type is physical assets. In addition, financial, human, and intangible assets are the basis for business models. Another report suggests that the most popular models range from the manufacturer to the financial landlord. In this context, both the wholesales and contractors precede the financial landlord. The study findings suggest that not all models are superior to others when all performance measures are critically considered. In any case, the authors argue that determining the best performing business model is a tricky issue. Nonetheless, the authors allege that a baseline specification is critical for checking the robustness of the research interpretations and alternatives (Malone et al. 23).
As a matter of future research, the authors recommend additional explanations of business models (Malone et al. 24). In fact, the authors suggest an in-depth analysis of how competition affects business models. A major area of interest is the element of interdependencies in some of the superior business models. Understanding how performance is vital for superior models is critical to initiating the improvement of operations in an efficient manner.
In conclusion, it is evident that performance among business models depends on the type of measurement being applied. The study provides business managers with critical information on how organizational structures can be modeled for effective functioning (Malone et al. 25). Besides investing wisely, business managers can establish customized and sustainable business models that withstand environmental challenges (Stern and Hicks 23).
Works Cited
Malone, Thomas, Peter Weil, Richard K. Lai, Victoria T. D’Urso, George Herman, Thomas G. Apel and Stephanie L. Woerner. “Do some business models perform better than others?.” MIT Working Paper (2006): 4615-06. Web. Print.
Stern, J. Alissa and Tim Hicks. The process of business/environmental collaborations: Partnering for sustainability. Boston: Greenwood Publishing Group, 2000. Print.