The Case of an Agricultural Information Service Provider in India
By Chander Velu
Business models are complex activity systems
that summarise the architecture and logic of a business, and defines the
organisation’s value proposition and its approach to value creation and capture. The role of the business model is to act as a mechanism to
enable the core value proposition to be transferred as benefits to the customer.
This is especially so when new technologies provide the basis for new customer
value propositions. However, often new business models need to be altered from
the initial version in order to create the design that might be sustainable and
profitable. We present a longitudinal and in-depth single case study of a
unique, mobile-phone-based
information service for farmers in India. The firm was formed by a major global
blue-chip company. In particular, the case study examines how the new firm
evolved its initial business model from a mobile-phone-based information
service for farmers to a transactions platform for agricultural crops between
buyers and sellers, and subsequently incorporating an engagement-based
solutions provider business model for banks and other agricultural-related
businesses.
The study
builds on three themes emerging from the systems thinking literature in
order to highlight the organisational capabilities that enables business model
evolution. The three themes are:
- Balanced redundancy refers to the ability of the firm to stretch and create additional overlapping resources in order to perform experiments while running the existing business model.
- Requisite variety refers to the extent to which components of the system obtain a variety of information to understand the environment better.
- Cognitive discretion refers to the freedom to perceive and construct an idiosyncratic meaning.
We explain
how these three constituent organisational capabilities enabled the new firm to
innovate its business model in
order to explore and develop an appropriate customer value proposition to
create and capture value. The lessons from the paper would be helpful
for managers as they create new business models and need to evolve them from
their original design.
Read our papers:
Velu, C. (2017) A Systems
Perspective on Business Model Evolution: The Case of an Agricultural
Informational Service Provider in India, Long Range Planning,
forthcoming.
Velu, C. (2017) A Systems Perspective on Business Model Evolution: The Case of an Agricultural Informational Service Provider in India, Working Paper, Cambridge Service Alliance, June 2017
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