Linking a service innovation-based framework to business model design

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Conference Proceeding
2014 IEEE 16th Conference on Business Informatics, 2014, 1 (1), pp. 191 - 198 (8)
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Technological innovations are said to be intricately linked to business models in order to create value for both the end users and the innovators, as exemplified by Amazon and Google. Yet, specifically how and by what mechanisms or approaches can new technologies be represented and systematically designed as customer-centric business models to create value is still an under-researched area. This paper proposes a new service innovation-based conceptual framework for designing new business models to create and capture the potential value of new technologies. By unpacking the theoretical constructs of various well-known business models from the extant literature and reframing them in the context of the “value co-creation” principle defined by service dominant logic, this paper shows that “service concept design” provides a conceptually sound yet practical method for incorporating the “outside-in” end-user view of a new technology into a new business model design. From this mapping a service innovation-based conceptual framework is proposed as a foundation of a new business model design method. Amazon’s famous technology-based retail business model is used to exemplify the practical applicability of the proposed new service innovation-based business model design method prescribed by the framework. In the process, the paper also sheds light on how service innovation may relate to business model innovation – a relationship which, to date, is not well understood
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