Business model design methodology for innovative product-service systems: A strategic and structured approach

Abstract

The business model is receiving considerable attention these days as companies achieve great success, or suffer damaging failure, by changing their way of doing business. Most of the literature on this subject has looked to establish the taxonomy, architecture, or constituent elements of business models, with the aim of isolating their key characteristics. However, only a few have dealt with supportive methodologies for business model design. The present study aims to provide a structured methodology for business model design. At the core of the methodology lies a design template with which a current business model can be analyzed or reinvented in a systematic manner. The template consists of a set of predefined building blocks that describes a business model's strategic patterns and/or constituent elements, which building blocks were collected and verified through an investigation into more than one hundred real-world business model cases. in addition to the design template, a framework for new business model design also is provided. With the help of the representational schemes and procedures therein defined, one can design a business model in a more structured way. The framework is illustrated by means of a case study of an apparel company that set out to commercialize its newly designed product-service system concept. © 2011 IEEE.