Business model loom: A pattern-based approach towards the definition of business models

Abstract

To understand what an organization does one must comprehend the business model, which describes the way in which an organization acquires raw materials, transforms them into a product or service that is delivered to a client, and gains money in exchange. In consequence, it is possible to decompose the model into four core processes: supply, transformation, delivery, and monetization, which have both structural and behavioral dependencies among them. Unfortunately, identifying the business model demands an overall view of the business, and most representations focus only on the structural part leaving aside the interactions between core processes. The objective of this paper is twofold. Firstly, it presents a conceptualization and representation for business models that is capable of handling their components and interactions. Secondly, it uses the proposed representation to introduce a catalog of business patterns applicable in the design, portrayal, and analysis of business models. Each pattern includes the basic participants, resources, activities and interactions that must be accounted for in order to perform the core process. When different patterns are joined together, a complete business model can be portrayed.