Page 14 - tctcissue4

REVIEW of FINANCE - Issue 4, 2022
Researchers have come up with different definitions in some perspective mostly focused on a full business
in an attempt to explain what the essence and purpose model, often based on a specific company, or a simplified
of a business model is (Pateli, 2004). Definitions basic model, or a specific element of a business model.
have had different foci and have been more and less The in-depth descriptions of business model types
inclusive. Timmers (1998) provides one of the first often address interesting business models of well-known
business model definitions. These definitions see the firms or innovative business model of upcoming firms
business model as an architecture and address the based on empirical studies (Anderson, 2009; Weill &
business network with a focus on the different roles Vitale, 2001; Afuah and Tucci, 2003; Lambert, 2006).
of the actors and their interactions and relationships. Open business model
Most authors do stress that a business model does The idea of open business model comes mainly from
not cover the full strategy (Chesbrough, 2002). Others the open of source community and innovation model
quite explicitly differentiate between business models which receive much concern during 21 century, the
st
and strategy (Magretta, 2002; Mansfield, 2004). basic assumption is that the open business model may
More comprehensive definitions combine the ideas help companies to create greater values. Chesbrough first
of an architectural representation of the business formally proposed open business model. He thought the
network and the generation of revenues for the focal economic value of open innovation was not fully released,
organization (Dubosson, 2002; Morris et al., 2005). companies need to open their own business models,
However others are less inclusive in their business allow the inflow of external creativity and technology
model definition and explicitly differentiate it from and outflow of internal underutilized technology. Open
other concepts or exclude some specific elements. business model is the exchange of creative, technology,
Some definitions follow from, or are influenced by, knowledge and other resources across its own border
the specific context in which the business model concept with external partners in the whole process of technology.
is used. For example, Amit and Zott (2001) focus on Based on the above discussion, we believe that the open
value creation in e-business and see the business model business model is a business model that the enterprise
as depicting the design of transaction content, structure, in order to maximize the commercial values, break
and governance transactions. The business model concept down organizational boundaries, and integrate all the
is also applied for organizations that have less of a profit knowledge and resources of the corporate stakeholders,
focus such as socially-oriented organizations (Moingeon, couple through internal and external resources, thereby
2010). This use of business models for different purposes enhancing enterprise value creation and the interests.
and in different contexts, such as start-ups and established Here includes not only the interaction with customers,
companies, different types of innovation…may also but also knowledge share, mutual transfer of property
explain why there is no widely agreed upon definition. rights of research institutions and research institutes of
Some researchers have tried to address the problem the university, as well as exchange and trade of other
of different business model definitions by identifying resources. The core of open business model is to break
categories or themes reflecting the different origins or the boundaries and make full use of internal and external
meanings of the concept (Table 1). Given the wide variety resources to service our own. The nature of business
of origins and meanings of the business model concept, model is to integrate a variety of resources to create
it is not surprising that a general accepted definition new values, and open business model is the best reflect.
has not yet emerged. Therefore, it will be important Open business model focuses on the combination of
for the definition to provide a generic and abstract share internal resources and the integration of external
conceptualization that can be applied for different resources, in order to improve the key resources and
purposes and in different contexts. capabilities, then make full use of available resources to
Classification of business models achieve corporate innovation so as to enhance the values.
In reality, the degree of openness of the corporate In open business model, the corporate can use
business models is not the same. According to the research external technology and R&D capabilities to develop
of Chesbrough as the difference of degrees of share and new products, thus saving the cost and time of research
integrate of external resources in the process of creating and development. The companies can also transfer
values, open business models can be divided into four underutilized patents, such as patent license and a spin-
models: closed, sharing, absorption, and open business off of product process to bring new revenues, thus making
models. Table 1 shows the differences and relations company more competitive and adapt to the changing
between the four business models. market environment easier.
Business model research has been addressing the Open business model has two competitive advantages:
identification and description of different types of Firstly, the return on investment becomes more attractive
business models. These types are discussed individually to enhance the metabolism ability and drive company to
as part of a classification (Hedman and Kalling, 2003; achieve sustainable development based on innovation.
Osterwalder et al., 2005). Each type of business model Through open business model, enterprise can involve

13