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The Business Model: Nature and Benefits

Author

Listed:
  • Ramon Casadesus-Masanell

    (Harvard Business School, Strategy Unit)

  • John Heilbron

    (Harvard Business School)

Abstract

This paper considers the nature of the business model and its strategic relevance to negotiations. We elaborate a substantive definition of the business model as decisions enforced by the authority of the firm; this definition enables the analysis of business models through the analysis of individual firm choices. We situate negotiation outcomes within the strategy literature by considering 'ambivalent value' - value produced by the interaction of partner firms that does not necessarily accrue to any of them. The extent of 'ambivalent value' is unclear, but its persistence, despite changing structural market features, promises to help sustain superior profits in the long run. We conclude with an exploration of some ways in which firms' business models may impact their negotiation outcomes. Several of the proposed pathways work intuitively through the intrinsic characteristics (motivation, personality, etc.) of agents negotiating on behalf of the firm; others operate independently of those characteristics.

Suggested Citation

  • Ramon Casadesus-Masanell & John Heilbron, 2015. "The Business Model: Nature and Benefits," Harvard Business School Working Papers 15-089, Harvard Business School, revised Jun 2015.
    • Handle: RePEc:hbs:wpaper:15-089
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    File URL: http://www.hbs.edu/faculty/pages/download.aspx?name=15-089.pdf
    File Function: Revised version, 2015
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    Citations

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    Cited by:

    1. Charles Baden-Fuller & Vincent Mangematin, 2015. "Business Models and Modelling Business Models," Post-Print hal-01183386, HAL.
    2. Jennifer Chan, 2021. "Domestic Tourism as a Pathway to Revive the Tourism Industry and Business Post the COVID-19 Pandemic," Working Papers DP-2021-25, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Charles Baden-Fuller & Vincent Mangematin, 2015. "Business Models and Modelling Business Models," Grenoble Ecole de Management (Post-Print) hal-01183386, HAL.
    4. repec:hal:gemwpa:hal-01183386 is not listed on IDEAS
    5. Robert Ambrož & Doris Gomezelj Omerzel, 2017. "Business Model Innovation in Tourism: How to Survive in Highly Competitive Environments," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 10(2), pages 175-183.
    6. Marek Jabłoński, 2018. "Value Migration to the Sustainable Business Models of Digital Economy Companies on the Capital Market," Sustainability, MDPI, vol. 10(9), pages 1-42, August.
    7. Iheanachor, Nkemdilim & David-West, Yinka & Umukoro, Immanuel Ovemeso, 2021. "Business model innovation at the bottom of the pyramid – A case of mobile money agents," Journal of Business Research, Elsevier, vol. 127(C), pages 96-107.

    More about this item

    Keywords

    Business Models; Value Capture; Value-Based Business Strategy; Ambivalent Value;
    All these keywords.

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