Innovations and Business Development

Question: Discuss about the Innovations and Business Development. Answer: The concept of business model has been existence for quite a long time with its existence spanning back to the pre-classical times. However, Teece (2010) in his research maintains that the concept of business became known and widely used during the mid1990s with the advent of the internet. Since this time, the concept has gained widespread interest and various researches have been conducted and documented on this concept. Some of the notable researches who have been involved in researches in this area include Kodama (2009), Zott and Amit (2010), as well as Itami and Nishino (2009). For instance, Amit Zott (2001) maintain that dominance in the use of the word business model in the mid 1990 was spurred by the advent of the internet as well as by the rapid growth and changes in the market marked by a high a number of entrants into the market by new players as well as an increase in the interest in the bottom-of-the pyramid (Al-Debei Avison, 2010). The popular use of the word was also necessitated by the rapid expansions in the industries and organizations marked by both the expansion of the existing industries as well as the entrant of new players which are dependent on the post-industrial technological advancements (Teece, 2010). A business model is an abstract; could be in contextual form, textual form, charts or in some cases graphs representing a given business whose main aim is to show the operations of the business (Zott, et al. 2011). The model apart from showcasing the financial arrangements of the business also represents the products on offer as well as the measures that the business has put in place meant to ensure growth such as innovations in various fields such as in the field of technology. According to the definition by Al-Debei, et al. (2008), the structure of a business model represents the value proposition of the business, the architectural value of the business, the financial value of the business and the network value of that particular business. The architectural value in the business model could include the organizational infrastructure as well as the technological structure of the business which enable the products, information and services of the business to move within and without the business (Spieth, et al, 2014). A business model offers a description of the methods and means used by the organization in the creation of wealth, a description of how the organization delivers its products to its customers as well as capturing the values of the business in the socio-cultural and economic context (Chesbrough, 2010). Business systems are the value added chain in a business that are used to offer a description and meaning to the value-added business processes. Business systems entail the supply of goods and services across the business line with the aim of making profit. In order for one to conceptualize a business model as a system, one needs to consider the functionality of the business as well as the organizational model of that particular business (Osterwalde Pigneur, 2010). For instance, just as the definition of a business model emphasizes on the processes within the business line that explains how the business operates and makes profits, business systems emphasizes on how the business operates with the aim of making profits, that is, the supply chain within the given business (Baden-Fuller Morgan, 2010). Various scholars have provided a definition of business models from varied lines of thought. Some of these notable scholars in this line who have set out to provide a varied outline of business model include Kodama (2009), Zott Amit (2010) as well as Itami Nishino (2010). For instance, Zotti and Amit (2010) in their definition look at a business model from the point of how the internet has impacted operations of businesses. There focus is on how doing business electronically has impacted and transformed how business is done. According to Amit Zott (2010), the recent transformations in the organizational set up has been impacted by the rapid growth in the field of technology as well as by the adoption of new technologies in doing the business. They explain the business models adopted by businesses based on the recent advancements in the field of communication and information technology. Some of the communication and technological advancements that have had an impact in business models include the emergent as well as the rapid expansions in the internet use as well as the drastic reduction in the costs of communications and computing (Doz Kosonen, 2010). These changes have had an impact on the development of new ways of doing business that enables a creation of new business models as well as a new delivery value for goods and services (Zott Amit, 2008). These have in turn provided a platform for the development of unconventional exchange mechanisms as well as transaction architectures. To them a busines s model should be looked at as a system made up of activities that are independent and which go beyond the activities of the local firm (Amit Zott, 2012). The activities carried out by the firm enables it to develop a value system through which a business is associated with. The two conducted a research on a young engineering firm FriCSo that has managed to make steps using a friction reduction technology. Through the example of FriSCo, Zott and Amit demonstrate how technological advancements can be used to shape a business model. Kodama (2009) on the other hand gives an example of the business models adopted by Japan and recommends an adoption of the Japanese models by other nations as the system according to him is the reason behind Japans rapid growth in the area of business. In his paper, Kodama gives an example of Japans business models that have seen tremendous success in the consumer electronics, communications devices, Japans semiconductors as well as her mobile phone services in an attempt to demonstrate the origin of competencies in Japanese outstanding firms that have seen the nation make important steps in these sectors of her economy. According to Kodima, Japan has made tremendous steps in the growth of the outlined sectors as a result of her business models which emphasizes on the development of an organizational culture that is deeply rooted in the values that are shared among the people of Japan such as the value of teamwork, commitment to the tasks by the people of Japan as well as community spirit while performing tasks (Balmer Greyser, 2006). These value systems allows for the creation of organizational knowledge that is based on the tacit knowledge that is accumulated among the people of Japan. Furthermore, Itami and Nishino (2010) view a business model as that comprising of the elements of profit as well as a business system. To them, maximization of profits is the driving force behind every business model. He maintains that through the analysis of the profits generated by the firm, the firm is able to measure the viability of its operations as well as the behaviours of its suppliers and its customers. On the other hand, through an analysis of the business systems, the firm is able to learn on information about the business that it will use in the growth of the business in the long run (Demil Lecocq, 201). Hence he maintains that the success of any business model is measured by how much it is able to account for both the two outcomes. Having studied the three business models as provided for by Kodama, Amit and Zott as well as by Itami and Nishino, I find the business model postulated by Kodama as the best and that helped me understand business model better. Kodama, in his model uses the success made by Japan to offer his explanations of the best business models. In his system, Kodama points out that the electronics and communication firms in Japan have developed due to the development of a business model based on the development of organizational cultures that emphasizes on values that are commonly shared among the people of Japan such as the values of team work, commitment as well as community spirit. In conclusion, business systems postulated by various researches such as Kodama, Itami and Nishino as well as Zott and Amit gives an insight on the various models employed by businesses. A study of the systems helps existing businesses as well as emerging businesses come up with the best business models that will help them compete with current competitions in the market as well as predict the future trends in market competition and device the best models to help them cope with such competitions (Casadesus-Masanell Ricart, 2011) References Al-Debei, M. M., Avison, D. (2010). Developing a unified framework of the business model concept. European Journal of Information Systems, 19(3), 359-376. Amit, R., Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41. Baden-Fuller, C., Morgan, M. S. (2010). Business models as models. Long range planning, 43(2), 156-171. Balmer, J. M., Greyser, S. A. (2006). Corporate marketing: Integrating corporate identity, corporate branding, corporate communications, corporate image and corporate reputation. European journal of marketing, 40(7/8), 730-741. Casadesus-Masanell, R., Ricart, J. E. 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