Business Model: A Valuable Strategic Tool for Value Creation and Capture

The article by Morris, Schindehutte, Richardson, and Allen (2019) examines the usefulness of the business model as a strategic concept. The authors provide a comprehensive review of the literature on business models, including their conceptualization, theoretical foundations, and empirical evidence. They argue that the business model is a valuable tool for understanding how firms create and capture value, and for guiding strategic decision-making.

The authors begin by defining the business model as 'a systematic representation of how a firm creates, delivers, and captures value' (p. 28). They then discuss the various components of a business model, including value proposition, revenue streams, cost structure, and customer segments. They also highlight the importance of understanding the external environment in which a firm operates, and how it affects the design and implementation of the business model.

The authors then review the theoretical foundations of the business model, drawing on a range of disciplines including economics, strategy, and entrepreneurship. They argue that the business model provides a useful framework for integrating these different perspectives and for guiding strategic decision-making.

Finally, the authors review the empirical evidence on the effectiveness of the business model as a strategic concept. They find that while there is some evidence to suggest that firms with well-designed and well-executed business models outperform their peers, there is also significant variation in the effectiveness of different business models across industries and contexts.

Overall, Morris, Schindehutte, Richardson, and Allen (2019) make a compelling case for the usefulness of the business model as a strategic concept. They argue that it provides a valuable framework for understanding how firms create and capture value, and for guiding strategic decision-making. However, they also highlight the need for further research to better understand the effectiveness of different business models in different contexts.