Ng, Irene C. L., Ding, Xin and Yip, Nick (2012) Outcome-based contracts as a new business model : the role of partnership and value-driven relational assets. Working Paper. Coventry: Warwick Manufacturing Group. (Service Systems Research Group Working Paper Series, Vol.2012).

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Abstract

The concept of business models has been increasingly discussed in academic literature since the advent of internet and proliferation of e-businesses in the 1990s (Morris, Schindehutte & Allen, 2005). To attract funding, the early “dot.com” companies used the idea of business models to pitch the attractiveness of their proposed business ventures (Shafer, Smith & Linder, 2005). In academic literature on business models, several themes have emerged that are key concepts of a business model. First, value drivers are important elements for businesses and new business models are often a consequence of changes in these value drivers. These are defined as valuecreating activities or transformations that generate revenue for the firm (Chesbrough, 2007). Second, the performance of a company, through the change in such value drivers, is an essential element in a business model. Literature have described performance of business models as that which requires a joined-up, systems-focused and holistic understanding across the firm’s existing resources and capabilities to retain or achieve a competitive advantage in the industry it sits within as environmental conditions change (Wirtz, Schilke & Ullrich, 2010). Third, the formation of successful partnerships is a feature of new business models. This is echoed in strategy literature where the ability to establish strong partnerships as capabilities is recognised as core-competencies (Johnson, Christensen & Kagermann, 2008). According to Demil and Lecocq (2010), the firm’s “value chain of activities” should include the fostering of partnerships as part of the building blocks of a business model. Clearly, business models exhibit a need to be value-driven, partnership focused, and with the unit of analysis centred on the value-creating system which spans boundaries (Zott & Amit, 2010). There is also the need to understand the inter- or intra-organisational activities that contribute to that system, of which revenues are derived from its performance.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Science > WMG (Formerly the Warwick Manufacturing Group)
Library of Congress Subject Headings (LCSH):	Business enterprises, Strategic planning, Value, Partnership
Series Name:	Service Systems Research Group Working Paper Series
Publisher:	Warwick Manufacturing Group
Place of Publication:	Coventry
ISSN:	2049-4297
Date:	February 2012
Volume:	Vol.2012
Number:	No.4
Number of Pages:	38
Status:	Not Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access
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URI:	http://wrap.warwick.ac.uk/id/eprint/44354

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