Business Model Measurements: A Systematic Literature Review
Paper in proceedings, 2015
Objectives: In this paper, we systematically review the ways to measure business models and we explain what measures would help us to further develop our study of the link between business architectures and performance. Indeed, until today, a great variety of measures of business model have been made, but no consensual measurement tool has emerged. The absence of general measurement tools makes it hard to analyse the effects that a business model might have on firm performance.
Prior work: Focus of business models has been shifting from understanding how organizational design allows firm growth in internet industry (Timmers 1998) to the study of value creation in any industry (Amit & Zott 2001). As such, business model research produced many different definitions of the concept (Onetti et al. 2012), and there are some literature reviews trying to understand what a business model is and what it aims for (e.g. George & Bock 2011; Zott et al. 2011; Sahut et al. 2012). Most frameworks on business models describe the concept as configuration of business activities to create and deliver value for customers, converting it into economic value (Chesbrough & Rosenbloom 2002; Magretta 2002). Thus, it starts to be consensus on what a business model is, but we still need a clarification of business model measurement tools.
Approach: We conduct a systematic review of prior research on business models, focusing on how the business model is measured, and why. We also consider what conclusions can be drawn by authors with their measurement tools. This systematic review method has shown its relevance in context of research topics that are dispersed and need focus and clarification (Schneider & Spieth 2013). This is especially the case for the literature on business models (Baden-Fuller & Morgan 2010). The review process is adapted from systematic review methodology (Tranfield et al. 2003) to make the literature review transparent and replicable. As such, we have a two steps review process: first, we select papers on business model measurements, and then, we analyse them with systematic methods.
Results: Beyond classifying and evaluating business models based on proposed components in models, our results show that research has mainly focused on the change and innovation of business models on the one hand, and on efficiency on the other hand. The more quantitative measurements have focused on how the entire business model affects innovativeness or performance of the firm, not providing however, a consensus of how business models in general can be measured across different industries.
Implications and Value: Previous research on business model focusing on qualitative measurement does not fully support practitioners or academia to understand the impact of business models and how different choices influence some firm dimensions. The results of this systematic literature review bring some solutions to this measurement issue of business models and contribute to extend the scope of business model measurements. A standard measure of business model allows academics to actually assess the effect of firms’ architecture across industry. Thus, it is adding value to the research field on business models as well as to practitioners who want to be able to measure the effects of their business activities.
systematic literature review