A Critical Assessment of Business Model Research

TLDR

Since the mid‑1990s internet boom, firms have experimented with new business models, producing diverse scholarly interpretations and sparking debate on their relationship to strategy. The authors aim to critically review the extensive business model literature to organize it and clarify its broader implications. They conduct this review by analyzing existing interpretations, extending prior surveys, and investigating the causes of disagreement and the link between business models and strategy. They conclude that the business model perspective can enrich research across fields and propose future research directions.

Abstract

Ever since the Internet boom of the mid-1990s, firms have been experimenting with new ways of doing business and achieving their goals, which has led to a branching of the scholarly literature on business models. Three interpretations of the meaning and function of “business models” have emerged from the management literature: (1) business models as attributes of real firms, (2) business models as cognitive/linguistic schemas, and (3) business models as formal conceptual representations of how a business functions. Relatedly, a provocative debate about the relationship between business models and strategy has fascinated many scholars. We offer a critical review of this now vast business model literature with the goal of organizing the literature and achieving greater understanding of the larger picture in this increasingly important research area. In addition to complementing and extending prior reviews, we also aim at a second and more important contribution: We aim at identifying the reasons behind the apparent lack of agreement in the interpretation of business models, and the relationship between business models and strategy. Whether strategy scholars consider business model research a new field may be due to the fact that the business model perspective may be challenging the assumptions of traditional theories of value creation and capture by focusing on value creation on the demand side and supply side, rather than focusing on value creation on the supply side only as these theories have done. We conclude by discussing how the business model perspective can contribute to research in different fields, offering future research directions.