1. Advanced Management Control and Sustainable Development
Lecture 9: “Integrating” Business Model and Strategy
Prof. Angelo Riccaboni
University of Siena
Department of Business and Law

2. Agenda Business Models and to IIRC framework
Business Models and academics
Business Model Capitals
5 groups of components between Strategy and Business Models
6 fundamental factors included into the Business Model
Business Models and IR Framework
Financial capitals of Business Model
Intangible capitals of Business Model
Natural capitals of Business Model
Interaction between BM with Internal and External capitals

3. BUSINESS MODEL
IIRC framework
“The organization’s chosen system of inputs, business activities, outputs and outcomes that aims to create value over the short, medium and long term”

4. Business Models according to academics
Timmers (1998) defines BM: «an architecture of the product, service and information flow, including a description of the various business actors and their roles»
Tucker (2001) defines BM “a description of how your company creates value for customers that in turn generated revenue and profits for your company”
Zott and Amit (2001) defines BM “the content structure, and governance of transactions designed so as to create value through the exploitation of business opportunities”
Chesbrough and Rosenbloom (2002) defines BM «as a heuristic logic that connects technical potential with the realisation of economic value»
Seddon and Lewis (2003) defines BM as “an abstract representation of some aspects of an organization’s strategy; it outlines the essential details one needs to know to understand how an organization can successfully deliver value to its customers ”

5. Industry, customers and competitors Product offering
5 groups of components between strategy and Business Models have been identified :
Industry, customers and competitors
Product offering
Activities and organization
Resources and competences
Factor markets and suppliers

6. 6 fundamental factors included into the Business Model:
How does the organization create value? – factors related to the offering
Who does the organization create value for? – market factors
What is its source of competence? – internal capability factors
How does the organization position itself competitively? – competitive strategy factors
How does the organization make money? – economic factor
What are its time, scope and size ambitions? – personal/investor factors

8. Business Models and IR Framework
Business Model- is at the heart of the organization
Key elements – inputs, activities, outputs and outcomes
Aim of the company - to create value over the short, medium and long term

9. Financial capitals of business Model
Financial and manufactured capitals are the ones organizations most commonly report on
These capitals are the core and the real capitals of the company
Financial capital – are debt and equity finance
Manufactures capital – are set of tools and equipment used in production process

10. Intangible capitals of Business Model
Intangibles capitals - Human, Intellectual and Social and Relational
Human capital includes – stock of knowledge, skills, abilities of people (employees and managers)
Intellectual capitals include – value of brand and reputation, licences, patents, intellectual property, copyrights
Social and Relationship capital include – different effective relationships with other economic actors in order to mediate economic transactions, enhancing individual and collective well-being

11. Natural capital of Business Model
Natural capitals – represent the stock of natural resources or environmental assets (soil, air, water), that can contribute to the development of the organization’s activities, coming out affected, positively or negatively

12. Interaction between BM with Internal and External capitals

13. Interaction between BM with Internal and External capitals
IR Framework considers the linkages between an organization’s Business Model and its strategy.
The Multi-stage approach follows the following steps:
Focus on the concepts of strategy and the business model in use
Identify their main components and relationships, and understand how they are linked with the external environment
combine all these elements within the IR, receiving an information feedback in terms of performance metrics and recommendation for future changes