The Conceptualization of Business Model: A Dual Dimension Typology and Research Implications

As an emerging field in entrepreneurship research, business model has attracted the attention from scholars in entrepreneurship, strategy, organization, and technological innovation fields. Although the number of literature has experienced a substantial increase in the last ten years, the academic understanding of business model is not improved. The key reason could lie in the broad use of business model in the extant literature. The comprehensive literature review of business model has suggested that researchers have yet to develop a common and widely accepted language that would allow researchers to draw effectively on the work of others. To fill up this theoretical gap, this paper addresses the following research questions: how to conceptualize business model to integrate the different views on business model, and what are the theoretical implications to the business model research, especially in China’s context. Our purpose is to improve the business model research in general by developing a dual-dimension conceptualization and typology of business model, and contribute to the business model research in China’s context by highlighting the implications of our developed theoretical typology. Specifically, we firstly draw a comprehensive review on the origin and development of business model concept, and conclude that the extant literature mainly addresses the business model as the design or architecture of the value creation, delivery, and capture mechanisms of a firm. Secondly, we highlight the limitations of the current understanding by addressing the value attribute of business model, which leads to the competitive advantages of new ventures. We develop a dual-dimension conceptualization and typology of business model based on the characteristics of the business architecture and value attribute. And lastly we highlight the implications of the typology to the business model research in general, as well as the business model research in China’s context. Our theoretical exploration might contribute to the business model research. Firstly, we explore and integrate the differences of business model concept in extant literature. Specifically, we highlight the nature of business model concept in terms of the business architecture on how to create value, and the value attribute on how to compete the established business. We could understand that they are two sides of the same coin. Future research might take more efforts to the origin and development of the value attribute of business model. Secondly, we develop a typology model to highlight the differences of business model in the real business. We believe that this typology model might inspire the researchers to define, observe and measure the nature of business model. By doing so, it might contribute to the theoretical development of business model research in the future.