In the MIT eBusiness Process Repository, we organize our case examples by
Business Model. We define a business model as what a company does and
how they make money from doing it. The breadth of models can be explored by looking at two dimensions:
what rights are being sold and
what asset is involved.
We consider three basic types
of rights: ownership, use and matching:
Ownership means that the business sells ongoing
rights to an asset. This asset may have been created by the business from
raw materials or bought and sold without change. The amount of
transformation of the asset differentiates Creators from Distributors.
Use means the business retains ongoing rights to an asset but sells
the right to use the asset for a limited time.
Matching means matching buyers and sellers
without the business ever taking ownership of the asset.
We consider four types of
assets for which a company sells the rights: physical, financial,
intellectual and human.
assets include various products that can be sold including goods,
various forms of energy, food, etc. Physical assets may be reusable
or used once and consumed (such as food or energy.
assets are monetary in nature and need not physically change hands,
as long as accounting for ownership occurs.
- Intellectual assets include intellectual property, goodwill, brand image,
and human attention.
assets include people’s time and effort. Technically human resources
are not ‘assets’ in an accounting sense and cannot be bought and
sold. However, their time can be ‘rented’ out for a fee.
The table below shows a matrix of
what rights are being sold by what asset is being sold. This typology shows
16 possible models that we call Business Model Archetypes (BMA). While all
of the models are logically possible, some are not as common as others and
at least two (Human Trader and Human Creator) are currently illegal or there are
serious ethical issues.
Clicking on the type of right will bring you to the entry in the
process handbook. The bolded models have some examples in the handbook.
We have a
working paper that
describes our Business Model work in more depth.
Our research on Business Models was partially funded by the National
Science Foundation under grant number IIS-0085725.