Business Model Analysis from the Activity System Perspective: A Design Science Research

Marina Gaspareto Éder Henriqson About the authors

Abstract

Understanding a business model is at the core of organizational strategy, competitiveness, and business sustainability. Descriptive approaches to understand business models are often based on the analysis of their components by looking at organizational assets, resources, plans, and competencies. Although there are numerous contributions in the literature, few guidelines are offered regarding an Activity System perspective, in a prescriptive rather than a descriptive way. In this study, we propose a pragmatic solution to help cover this literature gap and to extend on previous studies. A Design Science Research approach was adopted including a multicase study of four business companies we examined in order to create a method for business model analysis from an Activity System perspective. The resulting artefact of the study is illustrated with data from the empirical cases. Three analytical movements are described as well as prescribed: dimensions analysis (i.e., business definition, customer segment, value proposition, profit logic, critical factors of value proposition, and Activity System); visual representation including illustrations of its Activity System; and competitive analysis including prospection for changes and innovations. Finally, the artefact is discussed in relation to its quality, utility, and usability.

Keywords:
business strategy; business analysis; business model; business planning; value creation

Introduction

A business model (BM) is a set of activities articulated to promote value, and the perspective of Activity System (AS) in literature is a promising way for describing and understanding it (see Amit & Zott, 2001Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6-7), 493-520. https://doi.org/10.1002/smj.187
https://doi.org/10.1002/smj.187...
; Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). However, the literature on BM, so far, provides little insights and guidelines on how to analyze it from an AS perspective in a prescriptive rather than a descriptive way (Maucuer & Renaud, 2019Maucuer, R., & Renaud, A. (2019). Business model research: A bibliometric analysis of origins and trends. M@n@gement, 22(2), 176-215. https://doi.org/10.3917/mana.222.0176
https://doi.org/10.3917/mana.222.0176...
; Pauwels, Clarysse, Wright, & Van Hove, 2016Pauwels, C., Clarysse, B., Wright, M., & Van Hove, J. (2016). Understanding a new generation incubation model: The accelerator. Technovation, 50-51, 13-24. https://doi.org/10.1016/j.technovation.2015.09.003
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; Sosna, Trevinyo-Rodríguez, & Velamuri, 2010Sosna, M., Trevinyo-Rodríguez, R. N., & Velamuri, S. R. (2010). Business model innovation through trial-and-error learning: The naturhouse case. Long Range Planning, 43(2-3), 383-407. https://doi.org/10.1016/j.lrp.2010.02.003
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). Moreover, Foss and Saebi (2016)Foss, N. J., & Saebi, T. (2016). Fifteen years of research on business model innovation: How far have we come, and where should we go? Journal of Management, 43(1), 200-227. https://doi.org/10.1177/0149206316675927
https://doi.org/10.1177/0149206316675927...
, in a large systematic review of 150 studies on BM innovation, suggest that there is limited convergence between theoretical and empirical data in business model literature.

Amit and Zott (2012Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. , 2015)Amit, R., & Zott, C. (2015). Crafting business architecture: The antecedents of business model design. Strategic Entrepreneurship Journal, 9(4), 331-350. https://doi.org/10.1002/sej.1200
https://doi.org/10.1002/sej.1200...
and Zott and Amit (2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
, 2013)Zott, C., & Amit, R. (2013). The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11(4), 403-411. https://doi.org/10.1177/1476127013510466
https://doi.org/10.1177/1476127013510466...
suggest that the use of the AS perspective on BM analysis offers a promising way to explain value creation with important effects for organizational strategy, competitiveness, and even for understanding business sustainability. However, they do not offer any prescriptive solutions about how to do that in a systematic manner. Moreover, literature on BM is mostly descriptive and it is often difficult to connect empirical data and assumptions made in BM analyses.

Our study contributes to address this theoretical and methodological gap by extending Amit and Zott (2015)Amit, R., & Zott, C. (2015). Crafting business architecture: The antecedents of business model design. Strategic Entrepreneurship Journal, 9(4), 331-350. https://doi.org/10.1002/sej.1200
https://doi.org/10.1002/sej.1200...
work while using Design Science Research (DSR) (Dresch, Lacerda, & Antunes, 2015Dresch, A., Lacerda, D. P., & Antunes, J. A. V., Jr. (2015). Design science research: Método de pesquisa para avanço da ciência e tecnologia. Porto Alegre, Brazil: Bookman Editora.) to empirically generate a prescriptive method for BM analysis from an AS perspective based on the study of four business cases. Additionally, we demonstrate how DSR provides a promising way to address this gap and a contribution to management literature.

The article is structured as follows: firstly, we present the perspective of BM based on AS concepts; secondly, we engage the issues of strategy and competitiveness in BM and AS; thirdly, the DSR approach adopted is explained, followed by the presentation of the artefact developed along the research; finally, we conclude with a discussion on further developments and use of our artefact.

Business Model from the Activity System Perspective

A business model (BM) analysis explains how companies perform business through an articulated set of activities in order to create and deliver value to stakeholders (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). The Activity System (AS) perspective offers a way to understand how value is created since it explains what companies actually do through their activities (Amit & Zott, 2012Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. ; Frankenberger & Sauer, 2019Frankenberger, K., & Sauer, R. (2019). Cognitive antecedents of business models: Exploring the link between attention and business model design over time. Long Range Planning, 52(3), 283-304. https://doi.org/10.1016/j.lrp.2018.05.001
https://doi.org/10.1016/j.lrp.2018.05.00...
; Spieth, Schneider, Clauß, & Eichenberg, 2019Spieth, P., Schneider, S., Clauß, T., & Eichenberg, D. (2019). Value drivers of social businesses: A business model perspective. Long Range Planning, 52(3), 427-444. https://doi.org/10.1016/j.lrp.2018.04.004
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; Troxler & Wolf, 2017Troxler, P., & Wolf, P. (2017). Digital maker-entrepreneurs in open design: What activities make up their business model? Business Horizons, 60(6), 807-817. https://doi.org/10.1016/j.bushor.2017.07.006
https://doi.org/10.1016/j.bushor.2017.07...
). In this study we define AS as a set of interdependent activities involving human, physical, or capital resources with a specific purpose (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). The way those activities are arranged depends on the company’s background and strategy and it has important impacts on competition (Porter, 1996Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61-78., 2004), resource allocation, and development (Amit & Zott, 2001Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6-7), 493-520. https://doi.org/10.1002/smj.187
https://doi.org/10.1002/smj.187...
; Barney, 1991Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
https://doi.org/10.1177/0149206391017001...
; Saebi, Lien, & Foss, 2017Saebi, T., Lien, L., & Foss, N. J. (2017). What drives business model adaptation? The impact of opportunities, threats and strategic orientation. Long Range Planning, 50(5), 567-581. https://doi.org/10.1016/j.lrp.2016.06.006
https://doi.org/10.1016/j.lrp.2016.06.00...
), and dynamic capabilities for innovation (Achtenhagen, Melin, & Naldi, 2013Achtenhagen, L., Melin, L., & Naldi, L. (2013). Dynamics of business models - Strategizing, critical capabilities and activities for sustained value creation. Long Range Planning, 46(6), 427-442. https://doi.org/10.1016/j.lrp.2013.04.002
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; Teece, 2007Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. https://doi.org/10.1002/smj.640
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; Teece, Pisano, & Shuen, 1997Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(sici)1097-0266(199708)18:7%3C509::aid-smj882%3E3.0.co;2-z
https://doi.org/10.1002/(sici)1097-0266(...
).

Interdependency among activities is a fundamental characteristic. It is necessary to comprehend how activities are interconnected in a systemic manner (instead of just looking at each activity separately) (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). Relationship among activities can be very close and, when a change happens in the organization, it is difficult to identify which elements are resonating with each other (Demil & Lecocq, 2010Demil, B., & Lecocq, X. (2010). Business model evolution: In search of dynamic consistency. Long Range Planning, 43(2-3), 227-246. https://doi.org/10.1016/j.lrp.2010.02.004
https://doi.org/10.1016/j.lrp.2010.02.00...
).

Companies perform many activities to project, produce, commercialize, and deliver their products. There are different types of activities, some of them trend towards strategic and others towards operational functions (Porter, 2004Porter, M. E. (2004). Vantagem competitiva (26a. ed.). Rio de Janeiro, Brazil: Campus.). In this sense, these activities can be analyzed in different degrees of resolution. In a BM approach, the main activities analyzed are those related to value creation. Zooming-in can reveal further supporting activities.

Zott and Amit (2010)Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
define design elements as the parameters that can help us to characterize an AS. They are: Content (i.e., which activities should be considered), Structure (i.e., how activities relate to each other), and Governance (i.e., who performs the activities). From an AS perspective, the constellation of activities of a system is not necessarily circumscribed within an organizational domain, since some activities, for example, can be performed by customers, partners, or suppliers.

According to Amit and Zott (2012)Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. , drivers of value creation in an AS, known as design themes, should also be considered. They are: Novelty (i.e., innovation in the Content, such as new activities), Structure (i.e., set of relations among activities), Governance (i.e., new forms of management and control), Lock-in (i.e., mechanisms that keep consumers or partners attached to the company AS), Complementarities (i.e., result from synergy among activities that promote more value when connected), and Efficiency (i.e., avoidance and control of losses through transaction cost management).

In Amit and Zott (2012)Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. and Zott and Amit (2010)Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
, the word design refers to characteristics that provide particular forms and patterns (i.e., Elements and Themes) to an Activity System. They can be considered requirements (i.e., proprieties) of an Activity System and adopted beforehand for strategy formulation, business planning, and even as guidelines for analyses of an existing system. In this sense, they can influence the development of the solution concept (Wieringa, 2014Wieringa, R. J. (2014). Design science methodology for information systems and software engineering. https://doi.org/10.1007/978-3-662-43839-8
https://doi.org/10.1007/978-3-662-43839-...
).

Organizational Strategy and Competitiveness

There are many opportunities for business model (BM) configurations through the adoption of new technologies and discovering new consumer needs; it can even promote BM innovation (Casadesus-Masanell & Zhu, 2013Casadesus-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. https://doi.org/10.1002/smj.2022
https://doi.org/10.1002/smj.2022...
; Saebi & Foss, 2015Saebi, 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. https://doi.org/10.1016/j.emj.2014.11.002
https://doi.org/10.1016/j.emj.2014.11.00...
). We understand that BM analysis enables organizations to become more competitive in four perspectives. First, managers and entrepreneurs may articulate their resources and activities to take it into a new configuration for fulfilling market opportunities (Amit & Zott, 2001Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6-7), 493-520. https://doi.org/10.1002/smj.187
https://doi.org/10.1002/smj.187...
, 2012Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. ; Bojovic, Genet, & Sabatier, 2018Bojovic, N., Genet, C., & Sabatier, V. (2018). Learning, signaling, and convincing: The role of experimentation in the business modeling process. Long Range Planning, 51(1), 141-157. https://doi.org/10.1016/j.lrp.2017.09.001
https://doi.org/10.1016/j.lrp.2017.09.00...
). Although changes in BM are necessary, they are hard to achieve because it involves several elements of the organization: from the acceptance of employees to the persistence of the organization in the initial moments in which the model is consolidating yet it is not having the expected results (Chesbrough, 2010Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Planning, 43(2-3), 354-363. https://doi.org/10.1016/j.lrp.2009.07.010
https://doi.org/10.1016/j.lrp.2009.07.01...
).

Second, a BM analysis helps to understand how competitors act in an industry. It is possible to compare BMs that compete in the same industry to understand the differences in how they create and deliver value. By expanding it to many companies, such analyses may lead to a sectorial panorama (Casadesus-Masanell & Zhu, 2013Casadesus-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. https://doi.org/10.1002/smj.2022
https://doi.org/10.1002/smj.2022...
).

Third, strategic thinking in BM enables to instantiate future arrangements and design of activities. In this sense, a manager may design and compare alternative BMs, prospecting for competitiveness and/or sustainability (Casadesus-Masanell & Zhu, 2013Casadesus-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. https://doi.org/10.1002/smj.2022
https://doi.org/10.1002/smj.2022...
; Teece, 2010Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003
https://doi.org/10.1016/j.lrp.2009.07.00...
). This process may contribute to increase managers’ repertory of knowledge, business, and market solutions and develop foresight. It also provides a viable and pragmatic way for understanding the continuous adjustment between strategic formulation and implementation (or in Teece’s dynamic capability terms, the continuous dynamic of firms sensing-sizing-transforming) (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
).

Fourth, BM may represent itself as an innovation when companies present a novelty in the way they do business (Amit & Zott, 2012Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. ). Such creation and reinvention, beyond continuous improvement, seek to offer a disruptive competitive advantage necessary to remain effective in an environment where the game rules change rapidly (Snihur & Wiklund, 2019Snihur, Y., & Wiklund, J. (2019). Searching for innovation: Product, process, and business model innovations and search behavior in established firms. Long Range Planning, 52(3), 305-325. https://doi.org/10.1016/j.lrp.2018.05.003
https://doi.org/10.1016/j.lrp.2018.05.00...
; Voelpel, Leibold, & Tekie, 2004Voelpel, S. C., Leibold, M., & Tekie, E. B. (2004). The wheel of business model reinvention: How to reshape your business model to leapfrog competitors. Journal of Change Management, 4(3), 259-276. https://doi.org/10.1080/1469701042000212669
https://doi.org/10.1080/1469701042000212...
; Yip, 2004Yip, G. (2004). Using strategy to change your business model. Business Strategy Review, 15(2), 17-24. https://doi.org/10.1111/j.0955-6419.2004.00308.x
https://doi.org/10.1111/j.0955-6419.2004...
). Therefore, innovation is not only related to laboratories and the development of new technologies and products, but rather to new configurations of BMs and its ASs (Chesbrough, 2007Chesbrough, H. (2007). Business model innovation: It’s not just about technology anymore. Strategy & Leadership, 35(6), 12-17. https://doi.org/10.1108/10878570710833714
https://doi.org/10.1108/1087857071083371...
).

Design Science Research Approach

We adopted a Design Science Research (DSR) approach seeking to generate a solution (i.e., an artefact) for business model (BM) analysis from Activity System (AS) perspective (March & Smith, 1995March, S. T., & Smith, G. F. (1995). Design and natural science research on information technology. Decision Support Systems, 15(4), 251-266. https://doi.org/10.1016/0167-9236(94)00041-2
https://doi.org/10.1016/0167-9236(94)000...
; van Aken, 2004van Aken, J. E. (2004). Management research on the basis of the design paradigm: The quest for field-tested and grounded technological rules. Journal of Management Studies, 41(2), 219-246. https://doi.org/10.1111/j.1467-6486.2004.00430.x
https://doi.org/10.1111/j.1467-6486.2004...
). Based on steps proposed by Dresch, Lacerda and Antunes (2015Dresch, A., Lacerda, D. P., & Antunes, J. A. V., Jr. (2015). Design science research: Método de pesquisa para avanço da ciência e tecnologia. Porto Alegre, Brazil: Bookman Editora.), the research design adopted was organized in three phases (as illustrated in Figure 1): exploratory, development, and consolidation. In the development phase, a multiple case study (Yin, 2012Yin, R. K. (2012). Applications of case study research (3rd. ed.). Thousand Oaks, CA: Sage., 2015) was conducted with focus on four companies from two different industries in order to explore empirical data of BM and AS.

Figure 1
Research design

Exploratory phase

The exploratory phase corresponds to the identification of a problem of practical relevance, obtaining an understanding of the existing empirical solutions, and the preliminary projection of the artefact itself.

We reviewed the literature on BM, AS, and their related available methods. The perspective of components for BM analysis is the mainstream and it is described in several theoretical (e.g., Afuah & Tucci, 2001Afuah, A., & Tucci, C. (2001). Internet business models and strategies: Text and cases. New York, NY: McGraw-Hill. ; Alt & Zimmermann, 2001Alt, R., & Zimmermann, H.-D. (2001). Preface: Introduction to special section-business models. Electronic Markets, 11(1), 3-9. https://doi.org/10.1080/713765630
https://doi.org/10.1080/713765630...
; Chesbrough & Rosenbloom, 2002Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11(3), 529-555. https://doi.org/10.1093/icc/11.3.529
https://doi.org/10.1093/icc/11.3.529...
; Johnson, Christensen, & Kagermann, 2008Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 50-60. https://doi.org/10.1111/j.0955-6419.2005.00347.x
https://doi.org/10.1111/j.0955-6419.2005...
) and empirical studies (e.g., Osterwalder, 2004Osterwalder, A. (2004). The business model ontology: A proposition in a design science approach (Doctoral dissertation). Université de Lausanne, Lausanne, Switzerland.; Osterwalder & Pigneur, 2010Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. New Jersey, NJ: John Wiley & Sons.; Osterwalder, Pigneur, Bernarda, & Smith, 2014Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value proposition design: How to create products and services customers want. New Jersey, NJ: John Wiley & Sons. ). However, while empirical studies present BM analyses, they do not provide any systemic method to understand how singular components result in real value propositions.

A preliminary version of the artefact was devised from the literature and examined with three subject matter experts (SME). Table 1 illustrates the profile of them.

Table 1
SME occupation and profile

We conducted individual semi-structured interviews that lasted one hour and twenty minutes in average. The main objective was to fulfill pragmatic issues not covered in the literature, such as how to describe an AS in practice and explore ways to organize a protocol for data gathering with c-suite executives.

The interviews with SME were guided as follows: first, selection of a BM to be analyzed for the sake of the interview (SME were free to suggest any business case they were familiar with to focus on); second, identification of a customer segment; third, definition of value proposition; fourth, identification of essential activities for value creation; and, fifth, revision of the analysis performed (i.e., from the first to the fourth step) in order to design a preliminary protocol for the case studies and evaluation criteria for designing the artefact (i.e., delivering a method for BM analysis based on key business dimensions; delivering a set of constructs for characterizing the BMs during the analytical phases; delivering a visual representation of BMs based on AS).

Development phase

The definition of the cases to be studied was an essential part of the artefact design. We selected two competing companies from two different industries (or market segments) in order to allow the exploration of differences and similarities. The c-suite executives were business leaders or founders with strategic and systemic view of their business. As recommended by Tremblay, Hevner, and Berndt (2010)Tremblay, M. C., Hevner, A. R., & Berndt, D. J. (2010). Focus groups for artifact refinement and evaluation in design research. Communications of the Association for Information Systems, 26, 599-618. https://doi.org/10.17705/1cais.02627
https://doi.org/10.17705/1cais.02627...
, during the artefact design we assessed these executives several times in order to make sure the development would have pragmatic and value-added purpose. Table 2 describes the market segment, type of business, and characteristics of the empirical cases.

Table 2
Empirical cases

During the development phase, data were primarily gathered by means of interviews with the c-suite executives. At least two rounds of interviews with each c-suite executive were carried out: the first round related to the development phase; and the second round especially related to the consolidation phase. Data from interviews were also combined and compared with data from documents (e.g., brochures, emails to clients, companies’ websites) as well as observations during visits and consumer experience of each product/service (e.g., buying from pet food companies as customer or retailer).

The development of the artefact can be summed up in three pillars. First, we started examining the dimensions of BM as currently established in the literature (i.e., D1-Value proposition, D2-Customer segment, D3-Profit logic, D4-Activity system). During the empirical work, another two dimensions emerged (i.e., D5-Business definition, D6-Critical factors of value). The resulting dimensions of the study are presented in Table 3.

Table 3
Dimensions

Second, a framework with the six proposed dimensions was created, in which dimensions were put together in order to find logical interconnections among them. Figure 2 is the resulted generic representation of a company’s BM framework.

Figure 2
Generic visual representation of a company’s BM

Third, with the BM generic representation in hands, another round of interviews was carried out when c-suite executives were invited to analyze and instantiate their businesses according to the model. This process allowed refinements in the artefact.

Although the three pillar phases are presented linearly for the sake of clarity, it is worth stressing that it was the result of a cyclical process (i.e., theory/method - empirical data - theory/method - empirical data - etc.): We gathered data about the companies; we described their BM; we compared them with the literature along the analyses; we continuously compared the results of the cases studied and we returned to the companies multiple times for refinement. According to Given (2008)Given, L. M. (2008). The Sage encyclopedia of qualitative research methods. https://doi.org/10.4135/9781412963909
https://doi.org/10.4135/9781412963909...
, “recursivity refers to the cyclical nature of qualitative research where all procedures can be undertaken repeatedly until a specific condition is met” (p. 746).

Findings were compared with the available literature in order to refine and re-design the method, therefore resulting in the final artefact of this study. Since data collection and analyses of the cases happened in parallel, it is not possible to define individual contributions for the final product. All the four cases helped to create the final artefact.

Consolidation phase

In the consolidation phase, we compiled and compared results from the four cases in order to deliver the final artefact (i.e., the business model analysis method). The interviews with SME as well as the first-round with c-suite executives helped to establish the preliminary version of the artefact. During the second-round of interviews, the first BM representations were scrutinized for its validity. Once the models were assumed to be valid, we explored their potential for competitive analysis purpose. Finally, the c-suite executives were questioned (a) about their experience while analyzing their BM in light of AS perspective and (b) about the pragmatic value of the resulting BM representation in order to explore the utility, quality, and efficacy of the artefact (Hevner, March, Park, & Ram, 2004Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design science in information systems research. MIS Quarterly, 28(1), 75-105. https://doi.org/10.2307/25148869
https://doi.org/10.2307/25148869...
). Further discussions about the resulting artefacts are presented in sixth section.

Data analysis

We used multiple sources of data (e.g., interview, observation, document analyses). Data were cross-checked and compared for triangulation purpose (Flick, 2012Flick, U. (2012). Introdução à metodologia de pesquisa: Um guia para iniciantes. Porto Alegre, Brazil: Penso.; Yin, 2015Yin, R. K. (2015). Estudo de caso: Planejamento e métodos (5a. ed.). Porto Alegre, Brazil: Bookman Editora.). Table 4 shows data sources in each phase of the study.

Table 4
Data source

Data were transcript and organized in MaxQDA for qualitative analysis following Content Analysis (Bardin, 2009Bardin, L. (2009). Análise de conteúdo (revised reprint). Lisboa, Portugal: Edições 70.). We also considered field notes from the observations and our perception as customers of the companies’ products or services. For the presentation of the results, we used direct quotes because they allow capturing the level of emotion of the interviewees, the way they understand the phenomenon, and their perspectives and experiences (Roesch, Becker, & De Melo, 2000Roesch, S. M. A., Becker, G. V., & De Melo, M. I. (2000). Projetos de estágio e de pesquisa em administração: Guia para estágios, trabalhos de conclusão, dissertações e estudos de caso (3a. ed.). São Paulo, Brazil: Atlas.). Since we dealt with strategic market information and we had to make sure that those c-suite executives would feel comfortable to express their strategic plans, confidentiality and de-identification of data and sources were assured to all participants, therefore preserving their anonymity and that of their companies.

Results: A Prescriptive Method for Business Model Analysis

In this section, we describe the resulting artefact (i.e., the BM analysis method), and we illustrate its presentation with selected empirical data. Three pillars constitute the resulting artefact, as illustrated in Figure 3.

Figure 3
The method proposed

The pillars may be described as empirical and analytical movements necessary for BM analysis from an AS perspective. The Figure 3 should not be taken as a mere description or a visual map of BM - as often suggested in other studies that come up with representations of BM (e.g., Osterwalder, 2004Osterwalder, A. (2004). The business model ontology: A proposition in a design science approach (Doctoral dissertation). Université de Lausanne, Lausanne, Switzerland.). Each pillar has an analytical purpose. The following sections describe each pillar and its analytical movements.

First pillar: dimension analysis

The First Pillar helped us to understand how the companies investigated create and deliver value through their Activity Systems. Business definition was the first dimension analyzed. We understand that it expresses the logic of the business: the way the enterprise delivers value (i.e., how) by products or services (i.e., what) to a customer (i.e., who) in order to enable its operation and monetization (i.e., how much). It represents a big picture of the BM that can be taken as a starting point to guide the analyses of other dimensions.

Defining a business may reveal to be more difficult than it seems, especially when the researcher is not familiar with a particular trade. In Case D, the interviewee said, “we offer an experience.” Then we questioned him how this experience is created? If it is not an experience as an event, what is it made of? Actually, they sell monthly paid book subscriptions; and they try to deliver not only an ordinary product, but a book embedded in a great experience. At this point, we understood that the literature experience was the main value generated by the BM and this general view helped us to deepen in each dimension analyzed.

The customer segment is the group of clients a company wants to generate value for. We realized that, since different customer segments have different value perception, this analysis has to happen before the value proposition analysis phase. In Case B, an example could be a scenario where a dog tutor, who buys pet food in a supermarket because it is easier and cheaper, may not be willing to go to a pet shop specifically for buying a more nutritive and also expensive pet food. Even if it is a prime canine food, made without grains, with no artificial preservatives and gluten free, this tutor might not be willing to spend more money because of it.

The definition of a customer segment helps to describe a customer profile beyond demographics while characterizing expected values. Interviewee from case B said: “We introduced in digital advertising, ‘low carb,’ why? Because it is fashion, because women have ‘low carb’ on their minds, and our food is a low carb product that has almost only meat.” This analysis is not just about understanding the gender of the customer segment but going further and understanding what they think and what they want.

We consider the value proposition as the core dimension for a BM analysis. It represents the main value offered to customers, the pack of products and services and set of attributes that make this pack valuable. The c-suite executives interviewed had some difficulties to express the value proposition in simple sentences, even if they appear to understand it. They usually created narratives to explain why their products and services were bought by their customers. We believe that an unclear vision of value proposition may contribute to create misunderstandings and cloud communication within organization and market. In Case D, the interviewee said, “A Disney of books, we try to create like that,” referring to their value proposition. He was saying in this sentence that the customer experience is important for them and how they see their value proposition in a wide perspective; it is not only about the books they deliver, but also about the feelings that are involved in books’ expectations.

We call profit logic the formula that explains how a company makes money through its revenue sources and cost base. The revenue sources may be critical for a company such as Case D, which uses technology to charge automatically by credit card. The consumers do not need to assign a contract, but as this subscription renews automatically it reduces the probability of cancelling the service. The cost base analysis is about understanding the main cost structure for value creation. Case B, for example, adopts a strategy of cost reduction in the matrix of raw materials used to produce their pet food; interviewee said: “Why are we putting ostrich? Because one day we want to make one with ostrich meat, so we don’t have to test the distribution chain, we already have a guy who supplies us.” They often prospect suppliers for substitutive products, such as chicken or obligator meat (depending on the price and quality control standards) and they test them to guarantee their food quality.

Critical factors of value proposition (CFVP) are essential factors that underpin the value proposition and represent the main link between it and those activities performed to create value. We elaborate on the CFVP construct as a way to understand how an AS creates value. The CFVP may be determined in two different ways: the first and primary way is based on the value proposition (i.e., what are the critical factors that enable the BM to create and deliver its value proposition?); the second way emerges from the AS analysis (i.e., what does make the AS singular? Considering the activities performed, which are the essentials for the BM?). Case D has its value proposition defined as “to offer unique literary experiences to members who establish a literary community.” Therefore, it must commit to the following CFVP: attract interest in their literary work, create exclusive editions, establish a literary community, and deliver products at home periodically. Each CFVP has a group of activities connected.

An AS represents activities connected to the CFVP. We call primary activities those linked directly to a CFVP and secondary activities those that support the primaries. We recommend choosing three to four primary activities for each CFVP along the analyses. Case D, for example, has four primary activities connected the CFVP to attract interest in their literary works and multiple secondary activities associated as show in Table 5. While an activity is mainly related to a CFVP, it may be connected to another CFVP or even another activity due to interdependencies. We propose to illustrate those activities on a map and link their relationships for better illustrating and understanding resource sharing and synergies.

Table 5
Case D example of primary and secondary activities

Dimension analysis may be guided by multiple aspects (see Table 6). We propose some memorable and simple sentences in order to guide the description and characterization of each dimension so it can be used in the visual representation of the BM later (the Second Pillar).

Table 6
Dimensions, aspects, and sentences for descriptions

Second pillar: visual representation of the BM

The Second Pillar provided the c-suite executives with a systemic understanding to their BM. The visual representation of the BM offers a holistic view of it. It helps to present the main results of the dimension analysis (the First Pillar), in order to enable organizations to identify opportunities for improvement. In addition, it offers a more visual and objective language, which allows for a holistic understanding, while becoming an important tool for BM communication. In order to identify opportunities for improvement, the following questions were proposed: What dimensions should be changed in order to ensure greater alignment in the organization’s BM? Which activities should be included, modified, or excluded from the AS considering the other dimensions of the BM? Figure 4, for example, illustrates the business model of Case B.

Figure 4
BM of case B

A preliminary version of the BM was presented to each c-suite executive in order to explore what dimensions should be changed and which activities should be included, modified, or excluded. In Case B, for example, we decided to include the keyword practical in the value proposition. Although we describe the food as easily mixed with dry food, we understood that the value proposition was more than this. It is practical because it provides a complete and balanced food ready to eat. If it is compared with dry food, there is no difference.

When we were reviewing the AS, we understood that fast response to clients’ doubts should be included, because this is important for the CFVP Pass confidence. If a client’s dog has food poisoning, for example, the company shall respond rapidly to avoid crisis propagation. We also made some minor adjustments such as change manage store sales for manage distributor sales. The distributors are intermediates responsible for sales in general. We also excluded activities when necessary.

Third pillar: competitive analysis

The Third Pillar offered opportunities to explore strategic issues related to the companies’ BM. Once the researcher or analyst has a visual representation of the BM (and its AS), it is then possible to (a) identify the current design themes, (b) compare with models of competitors, (c) instantiate modifications in order to explore strategic decisions, and (d) reflect about opportunities for innovation.

We adopted the design themes, based on Amit and Zott (2012)Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. and Zott and Amit (2010)Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
, which are sources of value creation: novelty (the extent in which the Activity System adds innovation and differentiation), lock-in (the extent in which the Activity System retains customers), complementarity (the extent in which activities of the system complement each other and generate synergic use of resources), and efficiency (the extent in which the activities of the system promote cost reductions/savings). By looking to them, researchers or analysts should explore content, structure, and governance of the activities in the system. Table 7 provides important guidelines for such analyses.

Table 7
Design themes and elements guidelines

We understand that these four sources of value creation may be presented in a BM with different strengths (e.g., very strong, strong, neutral, weak, very weak). Our analysis focused on the strongest ones and those we found promising to deepen in the value creation system.

An understanding of the business logic of companies competing may emerge when comparisons with competitors are made (i.e., examining similitudes and differences among Activity Systems). The comparison of different BMs, for example, may highlight reasons why some competitors in the same industry have similar value propositions and customer segment despite delivering different values. At the same time, it helps to identify valuable resources and instantiate opportunities for innovation and differentiation.

For example, Cases A and B have a similar value proposition, both of them offer healthy pet food to a customer segment who cares a lot about their pets. But these cases have different AS: while Case A is based on a vertical integration design with most activities performed by its company, Case B has an outsourcing model based on many partnership and contract arrangements.

Even though the comparison with a competitor may be more difficult when carried out by a player with limited knowledge about a competitor’s strategy, it is still a valid step and exercise of competitive analyses or benchmarking. During our filed work, comparisons were often made while participants were reflecting on their competitors’ BM and AS. Questions about the value proposition of competitors and activities performed by them were often discussed for analysis of competition.

Instantiate modifications in a BM constitute a strategic exercise of elaborating scenarios of the AS and their implications for competition (Casadesus-Masanell & Ricart, 2010Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2-3), 195-215. https://doi.org/10.1016/j.lrp.2010.01.004
https://doi.org/10.1016/j.lrp.2010.01.00...
). For example, during the case studies we instantiated scenarios where Case B would sell a pet food subscription, especially to customers who have dogs with special needs. These customers constitute a potential segment of clients who need to buy every month the Case B kind of food, although it may feel pricey for them. The subscription format would guarantee regular income for the company, create a kind of lock-in, and generate discounts for a yearly contract. While instantiating a BM and its AS, executives or analysts may prospect future scenarios and study strategy formulation.

Opportunities for innovation are evidenced when a BM presents a novel design theme (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). Case D, for example, is a new entrant with a different BM. We examined that there is innovation possibilities to establish new business from their experience in creating a literature community and developing an application platform. The company could make this application as the main product and offer a curatorship for different books (where they recommend books and also create a social network to connect readers) charging monthly per user.

Discussions: A Set of Outcomes and Evaluation of Artefact

The DSR approach adopted in this study resulted in a set of outcomes each one addressing different classes of problems identified in the literature and during interviews with SME (first, exploratory phase): (a) delivering of a method for business model (BM) analysis based on three pillars (i.e., dimension analysis that provides a definition of a company’s BM; visual representation of BM that allows exploring primary and secondary activities; competitive analysis for instantiations and prospection of business configuration); (b) delivering a set of constructs that may be adopted to characterize a BM in each analytical phase (i.e., Business Definition, Profit Logic, Client Segment, Value Proposition, Critical Factors of Value Proposition, Activity System; Opportunities for Improvements; Opportunities for Innovation); and (c) delivering an illustrative map of BM for analyses and instantiations.

As we mentioned in previous section, Consolidation phase, we had three main moments of artefact evaluation. First, we improved the protocol by reviewing questions and focusing on the business dimensions analyzed as a starting point. We learned that mapping activities should come after the understanding of such dimensions because it usually becomes visible while doing that. Once an Activity System is mapped, they are perceived as relevant for business analysis. One participant, for example, established a direct connection between activity, value perceived, and strategy. He analyzed the importance of buying ingredients like tomato and flour in an Italian restaurant: “It’s a purchasing activity, a bureaucratic activity, but if this activity is poorly developed a differentiated pizza will not happen.”

Second, the BM illustrations we created were scrutinized by c-suite executives during the second-round interviews. All of them mentioned that the visual representation of BM is an easy tool to communicate important features of their business to co-workers and partners. Third, we conducted four competitive analyses. While doing that, c-suite executives were able to instantiate, look for change and innovation opportunities, and formulate business strategy.

The artefact evaluation is summed up in Table 8, considering Hevner, March, Park and Ram (2004)Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design science in information systems research. MIS Quarterly, 28(1), 75-105. https://doi.org/10.2307/25148869
https://doi.org/10.2307/25148869...
criteria of quality, utility, and usability.

Table 8
Artefact evaluation

Our proposed artefact is a method for business model analysis. It has three pillars: dimension analysis, representation of BM, and competitive analysis. First, the dimension analysis examines how a company creates value through its AS. The notion of dimensions was already proposed by Afuah and Tucci (2001)Afuah, A., & Tucci, C. (2001). Internet business models and strategies: Text and cases. New York, NY: McGraw-Hill. , Chesbrough and Rosenbloom (2002)Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11(3), 529-555. https://doi.org/10.1093/icc/11.3.529
https://doi.org/10.1093/icc/11.3.529...
, Christensen, Johnson, and Rigby (2002)Christensen, C. M., Johnson, M. W., & Rigby, D. K. (2002). Foundations for growth. MIT Sloan Management Review, 43(3), 22-31. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=6553416&site=ehost-live%5Cnhttp://0-content.ebscohost.com.library.wofford.edu/ContentServer.asp?T=P&P=AN&K=6553416&S=R&D=buh&EbscoContent=dGJyMMTo50SeqLQ4yOvqOLCmr0uep7FSsqe4SLWWxWXS&ContentCustom
http://search.ebscohost.com/login.aspx?d...
, and Osterwalder (2004)Osterwalder, A. (2004). The business model ontology: A proposition in a design science approach (Doctoral dissertation). Université de Lausanne, Lausanne, Switzerland.. Likewise, literature reviews by Morris, Schindehutte, and Allen (2005)Morris, M., Schindehutte, M., & Allen, J. (2005). The entrepreneur’s business model: Toward a unified perspective. Journal of Business Research, 58(6), 726-735. https://doi.org/10.1016/j.jbusres.2003.11.001
https://doi.org/10.1016/j.jbusres.2003.1...
and Wirtz, Pistoia, Ullrich and Göttel (2016)Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long Range Planning, 49(1), 36-54. https://doi.org/10.1016/j.lrp.2015.04.001
https://doi.org/10.1016/j.lrp.2015.04.00...
show that there is no consensus on the main components of BM. We believe our dimension analysis presents the main components and expands them through the AS examination, as previously suggested by Amit and Zott (2001Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6-7), 493-520. https://doi.org/10.1002/smj.187
https://doi.org/10.1002/smj.187...
, 2012). Furthermore, the critical factors of value proposition (CFVP) emerged from our empirical work as an important contribution to define relations between primary and secondary activities. Like Osterwalder (2004), we also advanced in proposing guiding questions for investigating business dimensions - especially those related to the Activity System perspective.

Second, the visual representation of BM and its AS prove to be a valuable tool for business analyses consistent with Osterwalder and Pigneur’s (2010)Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. New Jersey, NJ: John Wiley & Sons. Business Model Canvas. During the artefact development, we adopted (as a reference) Porter’s (1996)Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61-78. Activity System framework, but we decided to include other dimensions in order to have a deeper understanding of the businesses analyzed. Porter’s Activity System (1996) added contributions in relation to his previous Value Chain analysis (Porter, 1996Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61-78., 2004Porter, M. E. (2004). Vantagem competitiva (26a. ed.). Rio de Janeiro, Brazil: Campus.).

However, his Activity System still requires a more instrumental and prescriptive way to generate its representation for business analysis purpose. While Zott and Amit (2010)Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
recognize the importance of Activity System for BM analysis and extend notions of business dimensions, type of activities, and configuration of systems, they do not offer a prescriptive way on how to carry it out. Also, our artefact in this study is slightly different from Osterwalder and Pigneur’s (2010)Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. New Jersey, NJ: John Wiley & Sons. Canvas, because it indeed considers the Activity System and shows how to generate it during the analysis.

Third, the competitive analysis may be proposed when the BM representation is completed. The design themes are based on works of Amit and Zott (2012)Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. and Zott and Amit (2010)Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
(i.e., four sources of value creation: Novelty, Lock-In, Complementarity, Efficiency). In our case studies we found that a company may often present a predominance of one or two sources of value creation. Therefore, we purpose to analyze it one by- one and find out the most relevant ones in the AS. Our artefact offered some guiding questions for this analysis, also considering each one of the design themes.

The comparisons with competitors aim to examine similarities and differences between business models and Activity Systems. Porter (2004)Porter, M. E. (2004). Vantagem competitiva (26a. ed.). Rio de Janeiro, Brazil: Campus. proposed a framework in which competitors with the same strategy are arranged in groups. The perspective is a structural analysis within industries aiming to understand the competitive strategy. We do see similarities between Porter’s strategic groups and our approach but there are some notable differences. The business model view understands that there are numerous ways to capture and deliver value (Teece, 2010Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003
https://doi.org/10.1016/j.lrp.2009.07.00...
), which depends on the set of activities and how they are performed, as well as who performs them (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). Our analysis does not intend to understand the pet food or book industries, rather we examined at each company to understand how their BMs differ and why.

Instantiate modifications in a BM enable researchers or analysts to reflect about company’s future. The notion of business model offers a holistic view, which explains why BM studies are receiving more attention among scholars of strategy (see Foss & Saebi, 2018Foss, N. J., & Saebi, T. (2018). Business models and business model innovation: Between wicked and paradigmatic problems. Long Range Planning, 51(1), 9-21. https://doi.org/10.1016/j.lrp.2017.07.006
https://doi.org/10.1016/j.lrp.2017.07.00...
). Casadesus-Masanell and Ricart (2010)Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2-3), 195-215. https://doi.org/10.1016/j.lrp.2010.01.004
https://doi.org/10.1016/j.lrp.2010.01.00...
understand strategy as an exercise of describing, designing, and instantiating business models; in this study we attempted to generate an artefact for instrumentalizing this strategic exercise.

Opportunities for innovation may be explored when considering novelty in the design themes (Zott & Amit, 2010Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
https://doi.org/10.1016/j.lrp.2009.07.00...
). Teece (2010)Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003
https://doi.org/10.1016/j.lrp.2009.07.00...
states that developing a successful BM is not enough to assure competitive advantage: companies should innovate their BMs just like innovating in products and process. Business model innovation is not easy to achieve (Chesbrough, 2010Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Planning, 43(2-3), 354-363. https://doi.org/10.1016/j.lrp.2009.07.010
https://doi.org/10.1016/j.lrp.2009.07.01...
), but at least companies must try to innovate and our artefact aims to look at opportunities for it.

Conclusions

In this study, DSR offered a valuable course of work in order to generate a possible solution for a theoretical problem: literature on BM has worth stressing the need to adopt an Activity System perspective, but without providing guidelines on how to operationalize such analysis from a methodological stand point. Based on Amit and Zott (2001)Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6-7), 493-520. https://doi.org/10.1002/smj.187
https://doi.org/10.1002/smj.187...
and Zott and Amit (2010) conceptual categories of BM from an Activity System perspective, our empirical work resulted in a roadmap for such analyses based on the three pillars presented in fifith section, Results.

The study of four business cases in two industries provided a rich empirical field for testing and applying theoretical concepts while establishing the proper condition for contrasting BM Activity Systems in the same industry (i.e., Case A versus Case B; Case C versus Case D). By such comparison, distinctive features of each case brought about possibilities to instantiate strategic changes in the architecture of value creation, innovation, and competition.

The Design Science Research approach allowed the development of a pragmatic solution for BM analysis in light of AS, in addition to offering valuable contributions to discuss a set of problems identified in the literature of business modeling.

We recognize that the final BM analysis of the four companies constitutes representations mainly based on the understating of their top leaders. Future researches should also explore multiple views by also listening to managers, workers, partners, and customers in order to understand how a business design creates value (or helps to foster its co-creation, assuming that customers may take part in the process of value creation). Likewise, it is important to mention that we were not looking for a descriptive validity in our analysis of the empirical cases; instead, we seek to generate a valid prescriptive and pragmatic solution to guide business model analysis in light of Activity System perspective to contribute with this literature gap.

Future studies should consider investigate how secondary (and even tertiary) activities generate synergy with each other. We also recognize that our resulting artefact also needs further applications in order to test its pragmatic value in a more comprehensive way. In this study, we focused on the generation of the artefact by means of DSR approach. Likewise, future studies should focus on exploring its potential for strategy formulation and innovation.

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Publication Dates

  • Publication in this collection
    06 Apr 2020
  • Date of issue
    2020

History

  • Received
    15 Apr 2019
  • Accepted
    17 Jan 2020
  • Published
    17 Mar 2020
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