Flashcards in Sustainable Business Models Deck (13)
What is a business model?
A set of business activities that help the company to generate value, and with that value gain some economic benefits
- what business do, how they can make money from what they do.
- very conceptual
- can be either implicit (it just happened)or explicitly (go out of your way to develop model)developed
- development is based on organizations own assumptions about how you think the customers need resonate with your value creation
- driven by technology and e-commerce due to Internet (sharing economy) lead to evolvement
- needs to be continuously developed
- value propositions need to be attractive to users
- choice of business model defines the architecture/network of relationships with stakeholders
What is the business models 3 main elements?
1. Value proposition:
- what are you offering to consumers and clients? (Service or product)
2. Value creation and delivery:
- need to go through the first stage in order to create the value. Seize business opportunities, markets and revenue streams by delivering proposed value
3. Value capture:
- how do you gain reward from value delivered. Process of gaining profit from it
How do you design a business model?
In order to go through 3 key elements there are different steps to go through:
1. Select technology and features to be included
2. Determine the benefits for consumers for consuming your product or service
3. Identify particular niche market to target
4 explore different revenue streams and confirm how to gain value
5. Design mechanism to capture value
Does a business model itself yield a competitive advantage?
No not really, why?
- business models that companies employ are visible. Everyone can have an idea of what's. Company is doing. It is easily imitated
- needs to be implemented in a business strategy, in order to deliver business model (valuable, rare, inimitable, non-substitutionary) in order to be competitive
- factors that can enable it form being copied:
1. System requirements: if require technology or processes in order to be implemented
2. Level of opacity: the fine details of the model might be enough from inhibit copying
3. Cannibalization anxiety: reluctance for change in fear that it will upset relationships or network of partners
What is a business case for sustainability? How does business models relate to sustainability?
- a situation where economic success is increased while performing in environmental and social practices
- a case where you can engage with environmental and social dimensions to improve profitability, then there is a case for business sustainability!
- the environmental and social dimensions must address one of the 6 business case drivers
What are the 6 business case drivers?
- cost and cost reduction
- sales and profit margin
- risk and risk reduction
- reputation and brand value
- employee attractiveness
- innovative capabilities
What are some requirements for business case for sustainability?
1. Identify activities with the intention of it contributing to the societal and environmental problems
2. Activity must create measurable or argued for positive business effect or a positive economic contribution for corporate success
3 management activity has led or will lead I both the intended societal or environmental effects and the economic effect.
Define business model for sustainability
- a sustainable business model is one that is designed to create, delivery and capture value for various stakeholders across the triple bottom line.
- emphasis in business case is ok economic performance and how we can use sustainability to achieve that, whilst this is about the triple bottom line and how to integrate the three together
What is the rationale of business model for sustainability?
1. The traditionalist perspective: states that there is a negative relationship between financial and environmental mental performance. (Downward sloping curve)
2. The revisionist perspective:
The relationship between environmental and economic performance is represented by an inverted u- shape. Positive up until optimum point whereby additional environmental activist is no longer rewarding financially for he company.
What are the key challenges for sustainable business models?
- develop practices or innovative activities in order to drive sustainable business model
Define business model innovation for sustainability
Innovation that create significant positive and or significant reduced negative impacts for the environment and or society through changes in the way organizations and its value network create, deliver and capture value.
What are the degrees of business model innovation?
1. Business model adjustment: one part of the three element changes, not about the value proposition
2. Business model adoption: value proposition, changes that mainly focus on matching competitors value
3. Business model improvement:business model elements are changed
4. Business model redesign: change main product or service offered