Arsenal Business Model

Business Models Evolution
Towards a Dynamic Consistency View of Strategy

Benoît Demil° & Xavier Lecocq°*
°IAE – Lille
*IESEG School of Management
°*LEM (UMR CNRS 8179)

Submitted to Universia Business Review

The term BM has flourished in the managerial literature since the end of the 90’s, especially with the emergence of Internet era and its massive adoption for commerce (Ghaziani and Ventresca, 2005). In the managers’ discourses BM is generally used to evoke the idea of change in the form of: “We have to make our BM evolving” (see for instance Yip, 2004 or Johnson et al. 2008). Moreover, a BM is rarely found immediately. It requires progressive refinements to create internal consistency or to adapt to the environment. As Winter and Szulanski (2001: 731) argue “The formula or business model, far from being a quantum of information that is revealed in a flash, is typically a complex set of interdependent routines that is discovered, adjusted, and fine-tuned by “doing””. Some massive change in BM may even radically transform an industry. For instance, the apparition of a free press sector is sometimes described as a factor of traditional medias decline.

Despite the interest of a dynamic view of BM, its use is paradoxically often static. A BM is indeed often describe as a ‘general blueprint’ of a business activity (Magretta, 2002) and helps to think more or less creatively to the basic question “How to make money in my industry?” (Afuah, 2004). In this view, a BM describes and synthesizes the way of creating value in a business. More precisely, it leads managers to conceptualize the different activities led by a company to generate value for customers and shareholders. For instance, the BM of low cost companies in the air transport is now well documented. These companies are using standardized resources and standardized types of planes, propose point to point liaisons, have a human resources management with low salaries and feeble unionization, make a... [continues]

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