Information and Knowledge Management using ArcGIS ModelBuilder

Monika Magnusson
“A business model is a conceptual tool that contains a set of elements and their relationships
and allows expressing the business logic of a specific firm. It is a description of the
value a company offers to one or several segments of customers and of the architecture
of the firm and its network of partners for creating, marketing, and delivering this value
and relationship capital, to generate profitable and sustainable revenue streams.”
This definition is one of the more comprehensive ones. In short a business model is a “blueprint of
how a company does business” (Osterwalder at al., 2005:2). The phenomenon of business models
were not acknowledged to any larger extent in research until the late 1990s, a couple of years after
Internet’s breakthrough. The focus was initially on defining the concept “business model” and on identifying
different categories of eBusiness models (Osterwalder et al., 2005). Timmers (1999) description
of various types of electronic commerce models is a well-known source in this phase.
Osterwalder et al. (2005) describe how the research in the area then evolved into listing business
model components or elements and describing or modeling these in reference models and ontologies.
The next step in research, which according to Osterwalder et al. still were in its infancy in 2005, is to
apply the business model concept in applications and conceptual tools for management.
Although the business model concept originated from Internet commerce most frameworks are generic
in nature and equally applicable to traditional commerce. For some organizations, such as pure
e-tailors, the eBusiness model is the business model. However, for traditional retailers or bricks-andmortars
starting a web shop as a complement, the eBusiness model may differ from the (overall)
business model. The eBusiness model can for example have another target market, a slightly different
value proposition, other distribution channels etc.
Wu and Hisa (2008:95) describe eCommerce as the use of eCommerce technologies to “execute
transactions, communicate, and innovate to support commerce through cyberspace”. This study uses
a similar definition. ECommerce is here defined as digital transactions of commercial business information
between a buyer and a seller via communication channels such as the Internet or telecommunications
networks. Both business-to-business commerce (B2B) and business-to-consumer (B2C) are
included as well as trade in both physical and digital products and different types of services. Moreover,
we focus on what Rappa (2004) refers to as a merchant model respectively a manufacturer
model for eCommerce. The former include e-tailors or retailers that operate solely over the web as
well as mail-order businesses with both web and traditional mail-order sales and moreover, traditional
brick-and-mortar retailers with web storefronts. The latter allows manufacturer to sell, lease or license
their products or services directly to the customers. For the purpose of this study the concepts of
eBusiness (model) and eCommerce (model) will be used as interchangeably as earlier research use
the concept eBusiness model when they in fact refer to business models for eCommerce (that focus
solely on buyer-seller in contrary to eBusiness).
3. eBusiness model elements
Several studies have proposed business model elements or components (e.g. Osterwalder & Pigneur,
2002; Morris et al., 2005, Yunus et al., 2010). While some components are frequently suggested there
is also a large variety. The literature reviews in Morris et al. (2005) and Shafer et al. (2005) revealed a
large number of elements proposed for both generic business models and for eBusiness models.
Different suggestions on how to structure or organize these elements also exist. Osterwalder et al.
(2005) suggests four ‘pillars´; product, customer interface, infrastructure management and financial
aspects. These ‘pillars’ are then specified in nine business model building blocks; value proposition
(product), target customer, distribution channel, relationship (customer interface), value configuration,
core competence, partner network (infrastructure management), cost structure and revenue model
(financial aspect). The framework of Osterwalder et al. (2005) has several similarities with the business
model elements that Pateli and Giaglis (2004:308) suggest for evaluations of business models
for eBusiness. The elements in their framework are mission (or strategic objectives), target market
(defined by scope and market segment), value proposition (or product/service offering), resources
(defined by capabilities and assets), key activities (in form of intra- and inter-organizational processes),
cost and revenue model (defined by cost and revenue streams, pricing policy), and value
chain/net (in form of alliances and partnerships).
Morris et al. (2005) propose a number of ‘guiding questions’ to assist the design divided into six areas:
factors related to the offering, market factors, internal capability factors, competitive strategy
factors, economic factors and personal/investor factors. Morris et al. (2005) also identify three generic
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