A Brief History of the Business Model Concept

The basic idea of the business model concept is that it should spell out the unique value proposition of the firm and how such a value proposition ought to be implemented. For customers such “value creation” could be related to solving a problem, improving performance, or reducing risk and costs, which might require specific value configurations including relationships to suppliers, access to technologies, insight in the users’ needs etc. Taking one’s point of departure in a business model perspective can have multiple purposes. Among the advantages of this approach is the possibility of enabling company management to structure their thoughts and understanding about strategic objectives and other relevant issues. Furthermore, this facilitates the conveyance of ideas and expectations the management has to the employees on the business process level and to the technically oriented functions. There are clear linkages to creating an understanding of the overall functioning of the firm in and, in addition, a focus on communicating the management perceptions of the business internally in the firm.