Organizational Transformation through Business Models: A Framework for Business Model Design

Organizations are increasingly inter-connected as they source talent, goods and services from other organizations located in disparate parts of the world. They seek new ways of creating value for themselves, customers and partners. They operate outside and across traditional industry boundaries and definitions. These innovations have lead to a focus on business models as a fundamental statement of direction and identity. This paper highlights what is known about the business model concept and where and why it differs from more established concepts of business strategy. It illustrates how the application of business models has transformed organizations. The contribution of this paper is the guidance that it provides for business model design and the insight it provides into business models and their effects on organizations. Following an analysis of how business models can transform organizations, this paper concludes with practical recommendations for business model design.