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Innovation And Sustainable Business Development Model

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Discuss about the Innovation and Sustainable Business Development Model.



The business models are considered as an effective representation of the overall business processes. It can take various forms such as textual, contextual and graphical and these elements are interrelated (Chesbrough 2013). There are also financial considerations that are designed by the organization including the present and the future services or products. The primary constructs of the business models include value proposition, organizational infrastructure, value architecture, value network and technological architecture (Boons & Lüdeke-Freund, 2013). A business model explains the rationale behind the creation, delivery and capture of value in the social, economic or cultural constraints. This essay would describe the different attributes of the business model and how business model can be perceived as a system (along with the use of different scholarly articles).


The concept of business models is used to represent the formal as well as informal descriptions in understanding the core business aspects (Chesbrough 2013). There can be variety of the business processes such as target customers, purpose, organizational structures, operational policies and others (Baden-Fuller & Haefliger, 2013). The business models are used to explain as well as classify the business processes in order to explore different possibilities of the future development (Chesbrough 2013). The business models can be considered as a set of the assumptions and the hypothesis that is used to determine the key resources as well as important activities in the value chain (Boons & Lüdeke-Freund, 2013). According to Bohnsack, Pinkse and Kolk (2014), the design logic views of the different business models considers the process as outcomes for the creation of new organizational structures in order to pursue an entirely new opportunity.


As opined by Baden-Fuller and Haefliger (2013), the value chain activities are defined by the different system components such as marketing, sales, outbound logistics, services and others, which are important components of a system. The partnership is considered as a business relationship that is based on openness, mutual trust, shared rewards and shared risk management in an organization. This leads to greater business performance in the organization.

When the business models are considered as part of the systems, then the overall model helps in knowing, understanding and stimulating the model representation (Chesbrough 2013). The system modeling can also be used to define the different interdisciplinary study of the application of the models to construct as well as conceptualize the systems mainly in the IT and business development aspects (Veit et al., 2014). The systems that involve the function modeling are concerned with the application of specific techniques such as functional flow diagram and others. The “business process modeling notation” is one of the graphical representations for the purpose of specifying the business process in a typical workflow (Flowers & Edeki, 2013). The conceptual models are often considered as considered as the abstracts derived from “real” world and it can be physical or social (Boons & Lüdeke-Freund, 2013). The value of a model is related to the well representation of the present, past, future and the actual state of the affairs (Veit et al., 2014).

The business models act as systems, which are able to solve dynamic and static problems (Farahani et al., 2014). The static models are defined as the relatively stable components of the business models that undergoes minimal change over a period of time. The business models are considered as equivalent to the managerial style of the scientific method in which the hypothesis is the starting point for solving the problems in a rational manner. The business managers use the business models to increase a large number of static as well as dynamic issues (Flowers & Edeki, 2013). The spreadsheet gives more analytical approach to the planning process and the managers are able to analyze the components as well as sub-components of the system in a logical problem (Veit et al., 2014). The static problems can be solved by asking “what-if” questions in order to gain critical assumptions for the business. The companies can also handle the dynamic problems by gaining market insights and take care of the resulting economics (Veit et al., 2014). The managers can gain an idea regarding the overall business functioning and the detailed system processes provide valuable feedback for improving the systems processes (Boons & Lüdeke-Freund, 2013).


The business models can be used to understanding the partnerships of the firm (Boons & Lüdeke-Freund, 2013). This can be done through the use of the Business Model Canvas. The entrepreneurs need to be careful about the key partnerships which would help them to perform the business activities in a smooth manner. This would be done with the formulation of suitable questions to understand the nature of partnerships (Flowers & Edeki, 2013). The questions include the critical partnerships for business, who are the different critical suppliers, type of partnerships according to the needs, location of the best supply chain and others (Flowers & Edeki, 2013). The business models help in the identification of different factors that help in the identification of the right partnerships (Zou et al. 2014). This comprises of the right partnership agreements, defining of expectations, impact on the clients, determination of the win-win situation and the right selection of the partners. The business entities need to decide the various types of partnership options such as strategic alliances, joint ventures and buyer-supplier relationships (Boons & Lüdeke-Freund, 2013).

The business systems are useful for understanding the innovation process used in a firm (Davenport, 2013). They define the set of processes that are used by the companies for sustaining in the market. Flowers and Edeki (2013) defines innovation as the process of sustaining themselves over the competitors is done with the help of innovative processes. The business system outlines the different modes of innovation that takes place in a business environment (Camisón & Villar-López, 2014). The different process flows would be displayed in the business systems. This would make it possible to understand the different levels of creative business solutions that are used by the organizations.


The article on “Boundaries Innovation and Knowledge Integration in the Japanese firm” by Mitsuru Kodama throws light on the Japanese firms which are in the process of restructuring their organizations for the purpose of competing in the global market (Kodama, 2009). The paper evaluated the competency of various Japanese firms in diverse industries such as electronics, telecommunications and others. The article focused on the “knowledge integration firm”, new kind of corporate model. The objective of the paper is to analyze the success factors of the Japanese firms in the technology domains and how they set an example to the world (Kodama, 2009). The primary argument of the article is on the knowledge integration process which is concerned with skillful collaboration between different organizational entities. The main idea behind the Japanese firms revolves around the technological as well as marketing innovation. They also have path-dependant knowledge and the firms implement diverse knowledge from various sources. A new business framework is proposed, which is known as the knowledge integration model. This model is an integration model for the heterogeneous knowledge, which is prevalent in the internal as well as external environment of the organization (Kodama, 2009). This model is sensitive to the dynamic changes in the horizontal as well as vertical corporate boundaries (Kodama, 2009). It has integration of vertical value chain and co-evolution model, which is used for analyzing “win-win” business models (Kodama, 2009). The internal knowledge is being integrated with the help of internal networks and the external knowledge is done through the external networks. The corporate boundaries are transcended with the help of knowledge transfer process (Kodama, 2009). The two aspects of the business process is concerned with the new boundary conceptions and the dynamic human networks (Kodama, 2009). For example, the knowledge integration model is being used by major firms such as Toyota and DoCoMo. They make use of i-business model which comprises of the vertically integrated value chains.


The article on “Killing Two Birds with One Stone” helped me to understand the business models in a better manner. This article clearly defined the composition of a business model – profit model and the business systems (Itami & Nishino, 2010). The business system is responsible for the delivery of the services or the products of a firm. The reason for selecting this article is that it gave a clear view of the current situation of the company and incorporation of value added features in the business processes (Itami & Nishino, 2010). The unique business model would help the businesses to gain sufficient competitive advantage by handling the risks associated with the business. The article stated clearly the actual business framework of an organization in simplistic terms (Itami & Nishino, 2010). The profit model of the companies is also explained in the article along with real examples (such as Google). It is important to understand the core assets of a business which are often invisible, however, they do affect the business in a major way (Itami & Nishino, 2010). The core competence of a firm determines the revenue generation and the competitive advantage.


This paper presented some of the interesting findings that would be helpful in understanding the future business trends. The business models are considered as a part of the overall business systems. The business models are able to solve both static as well as dynamic problems, which is helpful for the organizations in the long run. The effective use of the Business Model Canvas is done, which is helpful for answering several critical questions. The new concept of knowledge integration firm would gain more prominence in the new future. This essay would broaden the understanding regarding business systems in innovative business environment.



Baden-Fuller, C., & Haefliger, S. (2013). Business models and technological innovation. Long range planning, 46(6), 419-426.

Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2), 284-300.

Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, 9-19.

Camisón, C., & Villar-López, A. (2014). Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of Business Research, 67(1), 2891-2902.

Chesbrough, H. (2013). Open business models: How to thrive in the new innovation landscape. Harvard Business Press.

Davenport, T. H. (2013). Process innovation: reengineering work through information technology. Harvard Business Press.

Farahani, R. Z., Rezapour, S., Drezner, T., & Fallah, S. (2014). Competitive supply chain network design: An overview of classifications, models, solution techniques and applications. Omega, 45, 92-118.

Flowers, R., & Edeki, C. (2013). Business process modeling notation. International Journal of Computer Science and Mobile Computing, 2(3), 35-40.

Itami, H., & Nishino, K. (2010). Killing two birds with one stone: profit for now and learning for the future. Long Range Planning, 43(2), 364-369.

Kodama, M. (2009). Boundaries innovation and knowledge integration in the Japanese firm. Long Range Planning, 42(4), 463-494.

Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., ... & Spann, M. (2014). Business models. Business & Information Systems Engineering, 6(1), 45-53.

Zou, W., Kumaraswamy, M., Chung, J., & Wong, J. (2014). Identifying the critical success factors for relationship management in PPP projects. International Journal of Project Management, 32(2), 265-274.


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