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A Systems Perspective on Business Model Evolution

last modified Jun 15, 2017 01:01 PM
June Paper Release on ‘A Systems Perspective on Business Model Evolution: The Case of an Agricultural Information Service Provider in India’ by Chander Velu

Business models are complex activity systems that summarises the architecture and logic of a business, and defines the organisation’s value proposition and its approach to value creation and capture. The role of the business model is to act as a mechanism to enable the core value proposition to be transferred as benefits to the customer. This is especially so when new technologies provide the basis for new customer value propositions. However, often new business models need to be altered from the initial version in order to create the design that might be sustainable and profitable. The paper presents a longitudinal and in-depth single case study of a unique, mobile-phone-based information service for farmers in India. The firm was formed by a major global blue-chip company. In particular, the paper examines the capabilities needed to enable the evolution of the business model through the lens of systems thinking. The paper shows that three capabilities, namely balanced redundancy, requisite variety and cognitive discretion, are needed to enable a firm to achieve congruence between the components of the business model in order to deliver the customer value proposition. The lessons from the paper would be helpful for managers as they create new business models and need to evolve them from their original design.

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