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Concepts of a business model Report (Assessment)

Zott, Amit & Massa (2011) focus on the research done by scholars to define business models. They emphasize that the three concepts that various scholars use to define business model need reassessment. Their reassessment could lead to a refined designation of a business model. The three concepts incorporate business model as an archetype, activity system, and cost/revenue architecture. An impression about a business model has created four related themes revealing possibilities of a conceptual definition (Zott, Amit & Massa 2011).

McGrath (2010) illustrates a business model from a discovery point of view. The business world is remarkably dynamic, and business strategies need modelling. The processes require testing, prototyping, and unfinished jobs. It highlights four ideas about the concept of the business model.

These are strategic analysis of the market, the learning aspect, advantages of competition, and discovery. Further, a business model entails two important impressions. These are the business unit and the benefits of perfect performance. From the concept point of view, it emphasizes that a business model makes firms utilize their resources (McGrath 2010).

Samavi, Yu & Topaloglou (2008) argue that the business environment is dynamic and businesses must have a strategic approach in modeling their plans. For efficient development of strategies, the focus of business modeling should shift from establishment and exchange of worth to motivation, goals, and motivation of stakeholder.

The emphasis should be on the application of an appropriate modeling structure that is goal-oriented. Language and modeling methodology stand as the core issues for a good business model. The approach of “layering and separation of concerns” enhances understanding leading to reduction in difficulties (Samavi, Yu & Topaloglou 2008, p. 195). The incorporation of new modelling techniques is simple similar to the application of another framework.

Similarities and Differences

Although a definite definition of a business model does not exist, the concepts that describe it are more or less the same. It is important to agree that the significance of business models help in evaluation the proposed business course.

The discovery approach uses the derived concepts from research and tested models before application as the strategic approach focuses on the discoveries made from critical questions. This interdependence of these concepts lies on the fact that the business environment is dynamic. The difference relies on the firm’s utilization of its resources and the other on the satisfaction of the stakeholder. The strategic reasoning approach extends further in the provision for the uncertain future to cater for the dynamic business environment.


The different approaches applied in the definition of business model remain consistent with the adopted approach (Andrieu 2007). According to Magretta (2010), the success of any organization lies on a business model used. Business models are the heart of an organization that explains its productivity.

Despite the divergent views on business model in the three articles, “the conceptual, discovery driven, and strategic reasons approach to a business model” need simultaneous application. These approaches link to one another and are essential for the performance of an organization. Jansen Steenbakkers & Jäegers (2007) supports the strategic reasoning concept of business models because the managers of organizations are unsure of the business model to adopt. When the three approaches integrate, an effective business model is achievable.

List of References

Andrieu, M 2007, Infrastructure to 2030: Mapping policy for electricity, water and transport, Organisation for Economic Co-operation and Development, Paris.

Jansen, W, Steenbakkers, W & Jaegers, H 2007, New business models for the knowledge economy, Gower Publishing Limited, London.

Magretta, J 2010, Harvard Business Review on Business Model Innovation, Harvard Business School Press, Massachusetts.

McGrath, R 2010, ‘Business Models: A Discovery Driven Approach’, Long Range Planning , vol. 43, pp. 247-261.

Samavi, R, Yu, E & Topaloglou, T 2009, ‘Strategic Reasoning about Business Models: A Conceptual Modeling Approach’, Inf Syst E-Bus Manage, vol. 7, pp. 171–198.

Zott, C, Amit, R & Massa, L 2011, ‘The Business Model: Recent Developments and Future Research’, Journal of Management, vol. 37, no. 4, pp. 1019-1042.

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