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Midterm Digital Business Models UvA Summary
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Private message me for a discount Final grade: 8.5 Summary covers the summary of articles which are midterm material. 2021 class
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Article 1 | Lauren et al. (2013) | Consumer Power: Evolution in the Digital AgeCentral Mission theoretical framework of four distinct online consumer power sources:
- Demand-based power: aggregated impact of consumption and purchase behaviours from
the Internet and social media technologies.
- Information-based power: through content consumption and content production.
information is a consumer thing.
- Network-based power: changes in content through network actions to build personal
reputation and influence markets through the distribution, remixing, and enhancement of
digital content. network is you can build personal reputation and influence markets it has
to do with sharing
- Crowd-based power: the ability to pool, mobilize and structure resources that benefit both
individuals and groups. empowerment + disempowerment (people getting fatigued with
facebook). crowd creations like wikipedia
● demand + information are individual based sources
● network + crowd are network based sources
social connectivity: access to communication and social networks
technologic: convenient having superior mobility
economic: value to increase the bargaining power
ability to construct economic value in c2c markets
Findings
Consumers can draw power from multiple sources, and each source’s boundaries are fluid
and permeable. Network owners have impact on how consumers interact because they control the
technology behind it. “Empowering to select” strategies enhance demand for the final product.
Information-based power consists of the ability to consume and produce content. The fact that
consumers are free to express their opinions can influence the market. Multiplicity gives
consumers more power because it increases consumers’ awareness when it is feeding consumers
more information for specific purchases. Network-based power focuses on consumer connection.
It promotes a many-to-many model that everyone has freedom to share their contents online and
encourages the production of more platforms for consumers to share. Openness of infrastructure
is essential for network-based power that consumers have free access online. Soft infrastructure is
for rewarding specific types of contribution that indirectly influence the nature of transformation
and directly influence personal reputation by sharing their publications. There is also a downside
for network connection that people’s privacy may be at risk.
Application: The article helps companies assess the power of customers. Where Porter’s five
forces focus most on individual sources, especially demand, this framework expands the theory to
better suit online environments and networks. The theory can be used to distinguish potential
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,market gaps, to better plan and manage the business model as well as communications. Influential
customers can impact the company if they disagree with the company’s actions for example.
Article 2 | Bordonaba-Juste et al. (2012)
Key Objective: What antecedents impact the extent of business’ e-business use + whether the
level of use impact strategy, management and marketing, model on p.238
Which of the hypotheses were proven? p.541
- E-business use leads to changes in corporate strategy (H1), management (H2) and
marketing (H3).
- IT expertise (H4), size (H5), perceived benefits (H6), pressure from customers +
suppliers (H7), and competitive pressure (H8) will positively influence the level of
e-business adoption.
To stay ahead in the competition and keep themselves up with innovations, companies started
adapting their existing process to e-business technologies. According to Simpson and Doherty
(2004), e-business integrates communication technologies with business processes and
management practices through the internet. Furthermore, e-commerce refers to the business
where products or services are arranged via computer-mediated networks. Research by
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,Bordonaba-Juste, Lucia-Palacios and Polo-Redondo (2012) explores this integration through the
lens of organizational, technological, and environmental factors in the context of European
countries. Bordonaba-Juste et al. (2012) 's research mainly explores various antecedents
impacting the extent of business' e-business use and whether the level of e-business use
impacts corporate strategy management and marketing.
The paper presents the result of a cross-country analysis between countries with high
level and low levels of e-commerce adoption. Furthermore, the data set of 691 retailers from
seven European countries were used to test the following hypotheses (Bordonaba-Juste et al.,
2012). Priorly mentioned organization context is regarding IT expertise and size; technological
context is on expected benefits and; environmental context is about stakeholder pressure and
competitive pressure. In these contexts, by taking prior existing research and theories into
consideration, authors formed and reached conclusions for the following eight hypotheses.
It has been found that e-business use leads to changes in corporate strategy (H1),
management (H2) and marketing (H3). Also, IT expertise (H4) has a positive impact on
e-business adoption. (H6) is partially supported since not all the expected benefits showed the
same effect. Meanwhile, several hypotheses (H5, H7 and H8) were rejected: There is no
significant firm size effect. Moreover, neither supplier pressure nor customer pressure showed a
significant effect on e-business use. Lastly, it is stated that competitive pressure has a negative
influence on the use of e-business.
This study's findings suggest that changes in management, corporate strategy, and
marketing of the firms are primarily explained by the extent of the firms’ e-business use.
Therefore, managers can create their business plan according to their company’s e-business use
to better integrate and position themselves in the competitive industry. Also, they can form
strategic decisions and take measurements more efficiently by considering the significant
findings.
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, Article 3 | Voelpel et al. (2004) | The wheel of business model reinvention: how to reshape your
business to leapfrog competitors.
- The model is used to analyze the case of Hardy’s Australian wines.
- Model based on sensing opportunities in the markets: so you can start from anywhere in
the model
- easy of acceptance of new value propositions
- economics and profitability
Leapfrogging describes a rapid change made by a company or any kind of organization
to a higher level of development.
Introduction: While the environment is so rapidly changing nowadays, a sustainable competitive
advantage is needed to stay ahead of competitors. Business model → the company’s idea of how
they do business. Companies gain a sustainable competitive advantage by the creation and
reinvention (not continuous improvement or incremental change) of new business models.
Generic Definition Business Model
There is no single set of dimensions in a business model that applies to all companies and
industries. However, all models should enable value creation for customers and value chain
participants.
Thus, a business model is defined as: “The particular business concept as reflected by the
business’s core value proposition(s) for customers; its configurated value network(s) to provide
that value, that consists of own strategic capabilities and other value networks and capabilities;
and its leadership that enables capabilities sustainability to satisfy objectives of stakeholders.”
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