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Outcome-based contracts as a new business model : the role of partnership and value-driven relational assets
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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 (No.4).
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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) | ||||
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Subjects: | H Social Sciences > HF Commerce | ||||
Divisions: | Faculty of Science, Engineering and Medicine > Engineering > 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 | ||||
Official Date: | February 2012 | ||||
Dates: |
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Volume: | Vol.2012 | ||||
Number: | No.4 | ||||
Number of Pages: | 44 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) |
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