Innovation and Business Development Plan Free-Samples â€Myassignment

Questions: Write an Essay to Develop your understanding of the Business Model as a Concept and How a Theoretical Understanding of Business Models can be used to Explain Value Creation, Value Appropriation or the Innovation Process at Firms in Real-Life. Answers: This essay has been developed to understand the concept of a business model. This essay will also help to understand how the theoretical understanding of a business model can be utilized to explain value creation, value appreciation and innovation process used in an organization in real life. Business model can be defined as the process in which a company can generate revenue and gain profit from various business operations (Kindstrm Kowalkowski, 2014). In order to analyze the efficiency and effectiveness of firms business model most of business analysts use gross profit metric. Kastalli and Van Looy (2013) stated that gross profit of a company can be calculated by subtracting cost of goods sold from the revenue generated. Itami and Nishino (2010) mentioned that a business model has two major elements. They are such as business system and a model of profit. Itami and Nishino (2010) described business system as the system of work that a company designs to send its products and services to its target clientele. On the other hand, profit model has been discussed a pattern of a company through which it intends to make profit from its business. Itami and Nishino (2010) argued that, the intention of an organization to perused customers will not become successful, if they are n ot backed up by system of work or business system. Itami and Nishino (2010) had provided a basic business model to show the significance of business system. This business model helped to explain that system of work is central to the success of a companys learning system. Figure 1: Example of a basic business model (Source: Itami Nishino, 2010) Itami and Nishino (2010) used Google as example of an ideal business model. Goggles profit model is that the service users do not have to pay a penny to Goggle (Casadesus?Masanell Zhu, 2013). Instead the company capitalizes on their presence its search engine by selling the site space to the advertiser. The company has provided effort to reduce the cost of providing free service to users. The company has developed in-house server system to cut down the cost. All these hardware and software capabilities can be considered as the main framework of business system. Itami and Nishino (2010) mentioned that the profit model used by this company will never become effective in the absence of its business systems. It helps the company to gather information about the service use pattern and help to anticipate next generation of services it might provide. If the new services are not valued by service users then Google changes these services accordingly (value creation, value appreciation and in novation process). However, Zott and Amit (2010) had described business models differently. According to Zott and Amit (2010), business model is the system that can help a company to indentify its target market and help the company to fulfill all the needs of customers. According to all these authors business models can be conceptualized as an activity-based system. Effectiveness different models can vary from company to company (Saebi Foss, 2015). This is due to the fact that the ways in which companies create and capture value can differ significantly. Hence, it can be stated that effectiveness of a business model is much dependent on the organizations unique context. Business models can provide managers the flexibility the implement all the necessary changes and also help to compose all the elements of change. It provides a clear picture about how a company operates. According to Zott and Amit (2010), a business model activity system has three major design parameters or element. They are such as ac tivity content, activity system structure and activity system governance. Activity system can be referred as selection of activities. For example, in addition to all other activities of a retail bank, Bancolombia has adopted activities to provide microcredit service to 60% Colombians, who does not have access banking service. On the other hand, activity system structure can describe how different activities are linked with each other. For example, during the financial crisis, IBM had shifted from hard ware supplier to become service provide. For this reason, the company has developed various activities related with IT infrastructure, consulting and related with various other services and become successful. Zott and Amit (2010) stated that activity system governance help to identify those persons, who performs these activities. All these issues that a manager needs to consider while developing a business model for an organization. Kodama (2009) had developed a research work to present a new business model along with Japanese leadership style so that an independent knowledge integration model can be created. This model provided two insights related with new knowledge creation. First one is the vertical value chain model used in Japanese companies. These second one is co-evaluation model that develops win-win situation in a business. The business model has been provided below: Figure 2: Knowledge integration model (Source: Kodama, 2009) Kodama (2009) stated that, new knowledge creation includes two major concepts such as new boundary conceptions and knowledge integration process. Creative view and dialectic view can help a company in value creation and value proposition. On the other hand, innovative ideas can be developed using knowledge integration process. It includes development of dynamic human networks and establishing architecture on knowledge integration process. In order to increase innovation in a business system, a company has to take care of the three major elements. They are such as 1) labor division between a company and its trading pattern 2) organization of its in-house working system 3) assessing control activities and trading patterns (Itami Nishino, 2010). Toyota has been provided as the best example that implemented innovation in its business with the help of its business model. Itami and Nishino (2010) stated that, Toyotas business system is exceptional in all these three aspects. Firstly the company outsources many vital parts. However, in order to reduce the cost of outsourcing the company outsources and produces same parts in-house simultaneously. Secondly, instead of using only one supplier for outsourcing, the company uses two to four suppliers. Thirdly, the company has developed continuous relationship with a specific group of suppliers. Hence, the Toyota Production System can be used both as internal system of work organi zation and external system to control suppliers. Carayannis et al. (2015) added by saying that, in order to get innovative ideas for its business model, the company has arranged various forums to compare the technologies and costs used by different suppliers. It provides Toyota the opportunity to exchange various information related with product elements and competition. From this analysis, it can be stated that doing is learning. A company has to develop a business model in accordance to its business type. It can help find out the target customers and help to fulfill their needs. However, Schneider and Spieth (2013) argued that not every business model is equally effective for all organization. After implementing a business model, a company has to continuously assess its effectiveness in business. If any flaw occurs in the business model, then the management team has to make necessary changes. Hence a company can learn more about the effectiveness of a business model by doing activities mentioned in it continuously. It will help the company to meet the needs of their customers better than their competitors. Form Toyotas and Goggles business model, it can be assessed that they not only satisfy customer needs as system of work, better than their competitors but also help people in these organizations to learn more about customer reaction, trends and t echnologies. Maglio and Spohrer (2013) stated that, business models can also work as learning system as doing work means learning more about the work. It also can provide valuable database to the company that can be become helpful for the organization in future. For instance, developing own software and operating in-house server system provides various important information to Google (Schneider Spieth, 2013). The management of the company comes to understand how the software can be improved. In addition, they can get the internet search pattern of their service users. On the other hand, by implementing Toyota Production system, the company can learn both about new technology innovation and cost of production of auto parts. Hence, in conclusion it can be stated that business model is not just a system to control business operation and product development but it can also act as the learning system for an organization. It can help to find out how a company can find out the target market and set the value for its products for the customers. In addition, it can provide relevant information to the company related with customer trends. It can be useful for the company in future to develop new business strategies or business models that can be more effective. In addition, business model can provide in-depth knowledge about the business operation. This knowledge can be used to implement innovation in the organization. Knowledge integration model is the best example, in which Japanese companies create knowledge integration and implement innovation in their business. However, management of a company needs to understand that effectiveness of business model can vary in accordance to the type of business a company i s doing and in accordance to the changing trend. Hence, continuous assessment of business model is required Video Transcript Business model is the method in which a company can generate revenue and gain profit from various business operations. A business model has two major elements, such as business system or system of work and a model of profit. It can be stated that system of work is central to the success of a companys learning system. Goggle and Toyota can be used as good example of successful business models. Goggles profit model is that the service users do not have to pay a penny to Goggle. Instead the company capitalizes on their presence its search engine by selling the site space to the advertiser. The company has provided effort to reduce the cost of providing free service to users. The company has developed in-house server system to cut down the cost. All these hardware and software capabilities can be considered as the main framework of business system. Toyota has been provided as the best example that implemented innovation in its business with the help of its business model. The company outsources many vital parts. However, in order to reduce the cost of outsourcing the company outsources and produces same parts in-house simultaneously. Secondly, instead of using only one supplier for outsourcing, the company uses two to four suppliers. Thirdly, the company has developed continuous relationship with a specific group of suppliers. Hence, the Toyota Production System can be used both as internal system of work organization and external system to control suppliers. The company has arranged various forums to compare the technologies and costs used by different suppliers. It provides the opportunity to add innovation it its business operation. Many companies of Japan have used knowledge integration model to enhance value creation, value proposition and innovation. Creative view and dialectic view can help a company in value creation and value proposition. On the other hand, innovative ideas can be developed using knowledge integration process. In order to develop a successful business model, management team has to remember that doing is learning. After implementing a business model, a company has to continuously assess its effectiveness in business. If any flaw occurs in the business model, then the management team has to make necessary changes. In addition, business model can provide in-depth knowledge about the business operation. This knowledge can be used to implement innovation in the organization. However, the most significant thing about business model is that effectiveness of it depends upon the type of business that a company is doing. Hence, through continuous assessment, management team has to find out the best suited business model for an organization. References Carayannis, E. G., Sindakis, S., Walter, C. (2015). Business model innovation as lever of organizational sustainability.The Journal of Technology Transfer,40(1), 85-104. Casadesus?Masanell, R., Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor?based business models.Strategic management journal,34(4), 464-482. Itami, H., Nishino, K. (2010). Killing two birds with one stone: profit for now and learning for the future.Long Range Planning,43(2), 364-369. Kastalli, I. V., Van Looy, B. (2013). Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance.Journal of Operations Management,31(4), 169-180. Kindstrm, D., Kowalkowski, C. (2014). Service innovation in product-centric firms: A multidimensional business model perspective.Journal of Business Industrial Marketing,29(2), 96-111. Kodama, M. (2009). Boundaries innovation and knowledge integration in the Japanese firm.Long Range Planning,42(4), 463-494. Maglio, P. P., Spohrer, J. (2013). A service science perspective on business model innovation.Industrial Marketing Management,42(5), 665-670. Saebi, T., Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions.European Management Journal,33(3), 201-213. Schneider, S., Spieth, P. (2013). Business model innovation: Towards an integrated future research agenda.International Journal of Innovation Management,17(01), 1340001. Zott, C., Amit, R. (2010). Business model design: an activity system perspective.Long range planning,43(2), 216-226.