I. General Objectives
Different surveys to Top Management Teams (TMTs) show that business model innovation (BMI) is at the forefront of their thoughts and challenges1. The ultimate goal of a business model is to create and capture value, i.e. to get a sustainable competitive advantage.
The decision of which business models to operate is the highest level choice of a company. An airline can be full-service or low-cost, a retailer can focus on a brick and mortar business model and/or an online platform, an e-commerce operator can specialize in selling the products bought from suppliers (merchant) or it can open its platform to facilitate the direct interaction between suppliers and consumers (marketplace), whereas a streaming service can broadcast content produced by third parties or concentrate in producing and showing its own content. Each of the available options involve a substantially different "architecture" for the business and, as such, requires a different business model.
Additionally, companies are increasingly operating more than one business model at the same time. An hotel conglomerate can have very different hotels chains (each, operating with a different business model) and supermarkets can have different formats to serve different types of clients. With high probability, it is not far the day in which UBER could combine the operations of a business model based on external drivers with the offering of rides in driverless cars. The scope and structure of a combination of business models may represent an important advantage for multi-business model firms.
A major objective of this course is to discuss how to design and operate business models. The tools to be learned should help students understand how to think about business model innovation, how to respond to the entry of disruptive business models and how to decide whether the company should operate a single or multiple business models.
II. Course Content and Organization
The first part of the course addresses the following questions: What is a business model? What features should a good business model possess? What are the building blocks of a successful business model? How to think about complementarities in business model design and operation?
The second part of the course analyzes business model innovation, with special focus on multiple side platforms and digitalization. We will also analyze other types of innovations at the business model level, including business model innovation at the industry and at the revenue levels.
The third part of the course discusses the management of multiple business models for the same company, and how the organization of the different business models depends on the firm´s goals. In this part, we also analyze business model transformation, including the discussion of the conditions required to transform the business model of an established organization.
In each of the sections we will review several examples of real life situations and discuss cases. Thus, we will combine conceptual and practical discussions.