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Business model innovation for asphalt with rubber content

The road towards a circular economy and a sustainable society

Written by Sebastian Andrén, Mattias Hedin

Paper category

Master Thesis


Business Administration>Management




Master Thesis: Business model Since the rise of the Internet era, the concept of business model (BM) has recently become more familiar to scholars and practitioners. The reason is new technology; the introduction of information and communication technology (ICT) companies has brought great possibilities to reshape the way organizations operate to add value, and has become an issue of increasing concern in research (Amit & Zott 2001; Teece 2010). Later, this concept was separated from ICT to include all types of organizations (Osterwalder 2004). The reason why this concept is getting more and more attention may be because researchers and practitioners are seeking to find the correlation between the company's competitive advantage and its business model (Amit & Zott 2001). Despite recent interest in the subject, there is no consensus on the definition of the concept. Table 1 lists the different definitions of well-known scholars. As shown in Table 1, this concept has multiple definitions. Recent research tends to include the views of stakeholders in order to better understand BM. In addition to differences, what BM has in common is often a systematic approach that can answer how an organization conducts business and how to deliver value from a series of activities (Amit & Zott 2010; Osterwalder & Pigneur 2010; Teece 2010). Since the definitions are different, there is no consistent element structure. However, as Johnson et al. (2008) Description There are often four components in all business models: key resources, key activities, customer value propositions, and profit formulas. Business models are often described as how to design a map of certain elements and their interactions. Related to this, business model innovation (BMI) focuses on the process of exploring multiple elements and interactions. By focusing on BMI, the purpose is to collect information to create new or reshape existing business models. The current research will adopt the definitions of Osterwalder & Pigneur (2010) and Amit & Zott (2001:2015), in which the business model is regarded as an activity system, and the understanding of structure and activity is very important for answering the purpose of the report. 2.2. Business Model Canvas Business Model Canvas (BMC) is a concept that can describe and analyze BM, and it has been used hard by scholars and practitioners. BMC is a strategic tool that can be used to map a company's structure, processes, and systems. BMC is composed of nine different building blocks; customer segmentation, value proposition, channel, customer relationship, key resources, key activities, key partners, cost structure, and revenue stream, as shown in Figure 3. 2.3. Sustainability of business model The value of sustainable development to the company is increasing. With the increase in resource expenditures of the corporate social responsibility reporting plan, research has begun to solve the problem of sustainable development-oriented business model innovation. It is expected that organizations will have higher standards in addressing economic and social inequality, financial crises, environmental incidents, resource scarcity, energy demand, and technological development issues involved in their business models (Joyce & Paquin 2016). These challenges can be seen as risks for organizations to promote sustainable development-oriented innovation, but they are also opportunities (Adams et al., 2015; Hart 2005; McDonough & Braungart 2002). The "triple bottom line" urges organizations to consider their social and environmental factors in addition to their financial bottom line. In recent years, they have made great contributions to incorporating sustainability into the company (Isil & Hernke 2017). In order for an organization to succeed, it is important to creatively innovate ecologically effective and ecologically efficient innovations, focusing on maximizing the use of natural, financial and social resources and integrating them into BM. As described by Adams et al. (2015), sustainability-oriented innovation needs to transcend the boundaries of incremental change, but expand within the organization and its larger stakeholder environment. For many years, companies have viewed sustainability aspects from an inaccurate perspective, and the result has rarely been a meaningful reduction in their overall energy and resource use (Joyce & Paquin 2016). Joyce & Paquin (2016) expanded the original BMC into a new and practical tool that integrates social, economic, and environmental issues into a more comprehensive view of the organization's BM, called the three-tier business model canvas (TLBMC). Similar to the model proposed by Osterwalder & Pigneur (2010), this tool is easy to use and practical because it supports creative visualization and development of business models. In addition, it provides a way to communicate sustainable business model innovations and changes to different audiences, thereby supporting the transition from gradual to more integrated and systematic sustainability-oriented innovation (Joyce & Paquin 2016). The distinguishing feature of this concept is that it utilizes the stakeholder management perspective and life cycle analysis in the newly created environmental and social canvas to coordinate and conceptualize different types of value creation within the business model perspective (Joyce & Paquin 2016). Read Less