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e-Business
and Business Models
Ian Miles
Ian.Miles@mbs.ac.uk
Business Models in the Digital Economy May 2012
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THE DIGITAL
ECONOMY’
Ian Miles
Ian.Miles@mbs.ac.uk
Business Models in the Digital Economy May 2012
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Overview
The Digital Economy
Business Model Thinking
Models and Heuristics
The Challenge of e-Business
The Digital Economy Revisited
Business Models in the Digital Economy May 2012
4. Manchester
Digital Economies
Informatics
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1960s… 1980s… 1990s… 2000s 20xx
Mainframes PCs Internet Mobile Ubiquity
Back-Office and
Front Office and Web 2.0, P2P,
Industrial Process
New Services ubiquitous services
Control
e-Business
Professional Users, Consumer and
High Expertise
Workplace Prosumer, Everyday
Digital
Digital Natives
IT industries, Forebears
High-tech, large
organisations
Digital Immigrants
Inspired by Marc Weiser et al; see I Miles (2005)
“Be Here Now” INFO Vol. 7 No. 2, pp49-71
Business Models in the Digital Economy May 2012
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The Business Model Boom
700
600
500
400
300
200
100
0
1980 1985 1990 1995 2000 2005 2010
Uses of “Business Model” in title of documents captured in “Publish or Perish”
(accessed 14 May, 2012)
– “e-business” in contrast explodes off the map by 2000, having kicked off in 1996.
Harzing, A.W. (2007) Publish or Perish, available from http://www.harzing.com/pop.htm
Business Models in the Digital Economy May 2012
6. The Dot Com Bubble brought business
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Mentions of business
model thinking to the fore
models take off in 1995
to 2000, accelerating
in later years, (like
share prices) then
steady growth (while
Dark Line: Index of leading
shares collapse).
technology shares
Rapid growth of hopes Grey Line: Index of Large cap
and hypes about companies
internet businesses;
Major levels of
investment – which
was highly speculative,
based on hopes of
technology-based
future returns from new
business models
Talk about New
Business Models –
prompted upsurge of
debate about Business
Models
Business Models in the Digital EconomyHigher 2012 of Economics, June 2011
May School
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Though the bubble burst…
One estimate that as many as 50% of the dot com
firms started up in the bubble were still active in
2004 (most of the other half were thus “dot bombs”).
Many major success stories were
established then:
Subsequent great financial excitement
about newcomers:
e-Business has steadily recovered from the bubble
There will probably be many other bubbles – though
note Facebook IPO debacle. There are also
concerns as to security and resilience.
Business Models in the Digital Economy May 2012
8. Business Model
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A cognitive representation, a set of hypotheses about
parameters and relationships. But then, whose
representation? Nature of model may vary:
For businesses (and other organisations) – communication and
sensemaking device, aligning views – and production process can be
vital. Codification in written form less important than mutual learning
and guidance – not a Business Plan to persuade investors. But, like a
Plan, will typically be modified by cruel reality.
For observers (and academics) – a tool for comparison, combining
benchmarking and strategy? for studying change?
Other? (Law, IP, etc.)
Commentators vary in the number and definitions
of key elements proposed. See essays
in Long-Range Planning June 2010
and Wirtz 2011.
Business Models in the Digital Economy May 2012
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http://www.businessmodelgeneration.com/ Alexander Osterwalder
WHO?
HOW? WHAT?
http://digitalenterprise.org/models/models.html
WHICH?
WHERE?
WHY?
Business Models in the Digital Economy May 2012
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Business Model Thinking 1
Capabilities and Resources Back Office /Stage
Business Front Office / Stage
Activities Costs Profits
Goods and services Revenue
Channels
Customers
Users
Business Models in the Digital Economy May 2012
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Business Model Thinking 2
What are (potential) competitors doing and planning?
Value Chains
Business Partners
How are these Capabilities and Resources Back Office /Stage
designed and
produced? Business Front Office / Stage
Activities Costs Profits
Goods and services Revenue Customer
Channels
Relationships:
Communications
How are these Customers (Marketing)
delivered? Users Research and Intelligence
Relationships among How (far) are these elements
organised and managed?
Users/ Customers
Business Models in the Digital Economy May 2012
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Business Model Elements
What are (potential) competitors doing and planning?
VALUEChains
Value CHAIN
STRUCTURE RESOURCES
VALUE Business Partners
AND
NETWORK CAPABILITIES
How are these Capabilities and Resources Back Office /Stage
NETWORK
designed and COST
POSITION
produced? Business
VALUE
Costs
Activities Profits STRUCTURE / Stage
Front Office
PROPOSITION
ECONOMIC
Goods and services Revenue Customer
Channels FORMULA
Relationships:
REVENUECommunications
CHANNELS,
How are these Customers
MARKET MODEL (Marketing)
delivered? Users Research and Intelligence
FULFILMENT REACH
Digital TARGET How (far) are these elements
Relationships among
Communities MARKETS
Users/ Customers
organised and managed?
Business Models in the Digital Economy May 2012
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e-Business Model Elements
What are (potential) competitors doing and planning?
Informatised processes,
VALUEChains
Virtual organisations and Value CHAIN
in design, production,
new intermediaries
STRUCTURE RESOURCES
etc. Adapted to
VALUE Business Partners accommodate e-
AND
business opportunities
NETWORK CAPABILITIES
How are these Capabilities and Resources Back Office /Stage
NETWORK
designed and COST
POSITION
produced? Business
VALUE
Costs
Activities Profits STRUCTURE / Stage
Front Office
PROPOSITION
New e-services; new e-services
ECONOMIC
Goods and services Revenue Customer
Channels associated with acquisition, FORMULA
Relationships:
delivery and use of “traditional”
REVENUEnew m-payments and
e- and
Communications
CHANNELS,
How are these Customers
goods and services
MARKET intermediaries
MODEL (Marketing)
delivered? Users Research and Intelligence
FULFILMENT REACH
Digital TARGET Data capture about users, usage
How (far) are these elements
e-Links to (andRelationships among
among)
Communities MARKETS
Users/ Customers
patterns, contexts: new
organised and managed?
Consumers and End-Users relationships and services (and
Business Models in the Digital Economy May 2012 data for 3rd parties...)
14. Manchester
Informatics
Timmers on “internet business”
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Paul Timmers, 1998, Business Models for Electronic Markets p7 redrawn by Wirtz, 2011, p35
Trends?
Superior to many accounts that just focus on revenue models – but horizontal axis
Business Models in the Digital Economy May 2012 is limiting (except for innovation researchers?)
15. e-Business Models and
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Business Models
Digital natives and immigrants… (how) are business models
developed, adapted, managed?
The models may be different, but are the elements or
building blocks are essentially the same?
Much recent discussion of Business Models (and disruptive
innovators – following Christensen) focuses on cases of
relatively conventional businesses, perhaps with some e-
features.
Does this reflect the fear that many e-business models were
froth on the bubble, not really sustainable approaches once
finance was tight?
Are there important new elements, more than nuance?
Is it sufficient to analyse individual models, or do we need a
more systemic approach?
Business Models in the Digital Economy May 2012
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THE GLOBAL DIGITAL
ECONOMY’
End of Presentation
Ian Miles
Ian.Miles@mbs.ac.uk
Business Models in the Digital Economy May 2012
