The Nature And Structural Characteristics Of Modern Business Model

In the prefaces of literatures on business model recently can be seen one of Peter Drucker’s golden sayings, that is, the competition between enterprises is actually the competition among business models rather than that among products. Although no one knows its original source, this golden saying has been the consensus among the industries and the academic circles. As a matter of fact, innovation in business models has become the primary means to enhance the market competitiveness of enterprises and even a pivotal criterion for a selection of investment under new economic environment. It is in such background that business model theories emerge and then are developing rapidly.Like other new disciplines, there are few precise descriptions with business model rapidly developing. Specifically, business model appears to be mixed with the traditional management concepts such as strategy, marketing, plan, and organization. So far there have not been clear theoretical frameworks and research paradigms for studies on business model. The mentioned confusion has been noticed by Joan Magretta who attaches the importance of defining business model in her article why business models matter, in which it is repeated that "the relevant concepts would be tangled and hard to be applicable unless a working definition is clearly given of business models of enterprises." As a matter of fact, there is a pressing demand for an exploration of nature of modern business model in order to establish a concept system and a theoretical paradigm. This thesis, therefore, focuses on nature of business model.The research framework is as follows. First, the thesis starts with defining modern business model, based on which nature of business model is explored. Second, the essential elements of business model are further explored and the primary motives to determine the formation of business model are revealed. Third, an attempt is made to establish a fundamental structure model which has the shared features of all the business models. Finally, the structure model is thoroughly verified from two perspectives:theoretical contrast and positivist analysis.In this thesis, the content of the research framework is presented by eight chapters, which can be divided into four parts. The first part introduces the preparatory stage in ten sections of the first two chapters, dealing with a brief introduction and the literature review on business model theories. It covers research background, previous studies and research trend, problematic issues; and on the other hand, it describes the theoretical framework, purpose, methodology and design of this study. The second part, as the core of the thesis, includes thirteen sections in Chapter3,4and5. It aims to propose a fundamental structure model of business models, which is based on the analysis of the essential features of modern business models, the function and position of the business model theories, the primary motives and the working mechanism of business model. The third part of this thesis, including eleven sections in Chapter6and7, focuses on the verification of the fundamental structure model. The model is tested with two orientations, i.e. theoretical contrast and positivist analysis. The last part comes to a conclusion. It not only reviews the research results but also expounds the major innovations, the theoretical and practical value of the structure model. In the end of the thesis are discussed limitations of this research and its implication for future studies.There are three innovations in this research. The first innovation lies in the revelation of the nature of modern business model from the temporal and spatial perspectives. The breakthrough in the diachronic research points to the emergence of, the developing process and path of, and motives for business model theories. The breakthrough with spatial orientation suggests that the structure and working features of business model are represented in two planes, i.e. business relations net and business entities. Based on the above results, this thesis firstly proposes a concept of business model with the dual-plane orientation. One plane deals with the system business model, a partial construction of the net structure and operation logic which embedded in the business network. Or simply, the system business model refers to the business relationships with modular features. The other plane involves the enterprise business model, the sum of the transaction relationships between business entities or enterprises and the stakeholders when business entities attempt to keep the competitive advantage in the business network and under the guideline of the enterprise philosophy. In other words, the enterprise business model fs the transaction structure in a specific environment.The second innovation is that this thesis formulates a relatively systematic concept system, the research methods and a theoretical framework based on a perception of the essence of business model. This theoretical system is the premise and logic for the major research contents of this thesis.The third innovation, the core innovation in this thesis, is the proposal of a brand new basic structure model which focuses on the material foundation and formation mechanism of business model through their surface structures. It is revealed in this research that no matter how complex business models, they are constituted by the essential elements:company entity, corporate partner and customers. Transaction activities among the essential elements are conducted through value discovery, value cluster, value transaction and value realization and distribution, contributing to a matrix with the elements as the row vectors and the value-added processes as the volume vectors. Obviously, each node in this matrix has its definite content, which represents the role, benefit, function and behavior of a specific business entity in a value-added process. The integral structure relationship in the matrix, therefore, reflects the transaction relationship among the different factors at the node, which can predict various possible commercial behaviors. Moreover, the results of theoretical contrast and positivist analysis have demonstrated two contributions of this structure model. On one hand, the structure model covers all the views on the issues concerning structure in the existing business model theories. On the other hand, it can be used as a utility device for inspecting, analyzing or even designing and creating business model. Therefore, the structure model is called the fundamental structure model of business models. As a core innovation, this structure model provides a universal perspective and a measurement for the studies on business model.In addition to the above innovations, the methodology merits mentioning which is designed for verifying the structure model proposed by this thesis. This thesis adopts an approach from the dual perspectives of theoretical contrast and positivist approach. In terms of theoretical contrast, this thesis selected the differing views from33representative scholars as reference. The contrastive analysis indicates that all the views of the mentioned scholars can successfully be elaborated on the formation factors of business model by the fundamental structure model, and all the elaborations agree with each other. It is safe to say that the fundamental structure model reveals the essential features of business model, thus being of theoretical value and reliable applicability. In terms of positivist analysis, this thesis collected329valid replies via oral and paper questionnaires. The results show that the structural relationships in the fundamental structure model are consistent with those of commercial behaviors in modern enterprises.After all, the present study explores a theoretical system and research methodology, and proposes a structure model of business models. The results are of practical value for future studies and application of business model theories.