Classroom Companion: Business

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Airbnb
Guest
Matching service
Guest fee
Host fee
Rent fee
Host
Host
Host
House
rental
. . .
. . .
. Fig. 19.13 Airbnb modeled using the SRM. (Authors’ own figure)
 
Chapter 19 · Digital Business Models

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19
19.5
 Conclusions
Business models are developed to identify key aspects of an organization’s business 
operations. The models are used both to describe the current state of the organiza-
tion and to identify key strategic actions required for taking the organization into the 
future. In other words, the purpose of the model is to identify the current market posi-
tion of the organization, estimate how the market and the technology will evolve, and 
on this basis, develop strategies for future market positioning and revenue generation.
The business model canvas developed by Osterwalder is a simple and effective 
tool to develop and analyze business models for enterprises in the digital econ-
omy. These enterprises are often multisided platforms where each business sector 
supported by the platform is based on entirely different value proposition, produc-
tion, cost, and revenue models. The stakeholder relationship model supplements 
the business model by identifying the type of relationship that exists between the 
stakeholders and the impact these relationships have on the business model. The 
principles have been illustrated for five enterprises with entirely different underly-
ing value proposition models.
 
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Questions
1. Massive Open Online Course (MOOC) was envisioned to disrupt the educa-
tional sector by offering virtually free and ubiquitous teaching online.
(a) Would you categorize MOOC as either a sustainable innovation or a dis-
ruptive innovation?
(b) Design the business model of a company offering an MOOC (e.g., 
Coursera) using the business model canvas.
2. Popcorn Time (now terminated by regulations) and Netflix were two digital 
services with similar value propositions.
(a) Use the BMC and the SRM to design the business model for Popcorn Time 
and Netflix.
(b) What are the major differences in the resulting business models?
(c) What is the major technological difference between Popcorn Time and 
Netflix?
3. Search the web and find answers to the following questions concerning Spotify:
(a) How many of Spotify’s users subscribe to its premium service?
(b) What is the largest cost of running Spotify?
(c) Does Spotify generate profits?
(d) Which companies are Spotify’s main competitors?
(e) What is Spotify’s market share in the music streaming industry?
(f) Based on your answers, identify the major strategic challenge for Spotify?
4. Wikipedia
(a) Why does Wikipedia rely on donations and not advertisements to provide 
revenue for its business operations?
(b) Is it possible for Wikipedia to use the subscription-based business model?