The Network Challenge (Chapter 15)

The Business Model as the Engine of Network-Based Strategies

Business & Finance, Management & Leadership, Planning & Forecasting
Cover of the book The Network Challenge (Chapter 15) by Christoph Zott, Raphael Amit, Pearson Education
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Author: Christoph Zott, Raphael Amit ISBN: 9780137015108
Publisher: Pearson Education Publication: May 19, 2009
Imprint: FT Press Language: English
Author: Christoph Zott, Raphael Amit
ISBN: 9780137015108
Publisher: Pearson Education
Publication: May 19, 2009
Imprint: FT Press
Language: English

Zott and Amit explore the role of business models in creating value through networks. They review earlier, firm-centric views of value creation, including Porter’s value chain, the resource-based view, and the transaction costs approach. They point out that business models go well beyond classic views of network theory (e.g., topography and structure) and include notions of purpose, acceptance, fairness, coherence, and viability. Based on their earlier framework for e-business models, they explore the role of four major interlinked value drivers: efficiency, complementarities, lock-in, and novelty. They argue that the focal firm’s business model acts as both an engine for value-creation and an invaluable construct for understanding the firm’s role in relation to other business model participants in the networks in which it is embedded.

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Zott and Amit explore the role of business models in creating value through networks. They review earlier, firm-centric views of value creation, including Porter’s value chain, the resource-based view, and the transaction costs approach. They point out that business models go well beyond classic views of network theory (e.g., topography and structure) and include notions of purpose, acceptance, fairness, coherence, and viability. Based on their earlier framework for e-business models, they explore the role of four major interlinked value drivers: efficiency, complementarities, lock-in, and novelty. They argue that the focal firm’s business model acts as both an engine for value-creation and an invaluable construct for understanding the firm’s role in relation to other business model participants in the networks in which it is embedded.

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