Literature Review- Clarifying the term ' Business Model'

The literature on e-business models reveals many different interpretations of the popular term 'business model'.  Where once companies talked about 'business plans', 'business models' became the catchphrase that encapsulated the e-commerce revolution in the 1990s.

Osterwalder, Pigneur and Tucci (2005) documented the various uses and meanings attributed by different researchers in the field.

Some like Galper (2001) and Gebauer and Ginsberg (2004) refer to business models as the way companies do business.  Others like Gordijn (2002) and Osterwalder (2004) considers it as a conceptualization of a company's business, that is, its elements and relationships.

Osterwalder et. al. (2005) proposed the following definition for business models:

A business model is a conceptual tool that contains a set of elements and their relationships and allows expressing the business logic of a specific firm.  It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.

They summarized the business model components studied in the literature and proposed Nine Business Model Building Blocks: