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  • 2015
  • Working Paper
  • HBS Working Paper Series

The Business Model: Nature and Benefits

By: Ramon Casadesus-Masanell and John Heilbron
  • Format:Print
  • | Language:English
  • | Pages:28
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Abstract

This paper considers the nature of the business model and its strategic relevance to negotiations. We elaborate a substantive definition of the business model as decisions enforced by the authority of the firm; this definition enables the analysis of business models through the analysis of individual firm choices. We situate negotiation outcomes within the strategy literature by considering "ambivalent value"—value produced by the interaction of partner firms that does not necessarily accrue to any of them. The extent of "ambivalent value" is unclear, but its persistence, despite changing structural market features, promises to help sustain superior profits in the long run. We conclude with an exploration of some ways in which firms' business models may impact their negotiation outcomes. Several of the proposed pathways work intuitively through the intrinsic characteristics (motivation, personality, etc.) of agents negotiating on behalf of the firm; others operate independently of those characteristics.

Keywords

Business Models; Value Capture; Value-Based Business Strategy; Ambivalent Value; Business Model; Negotiation Deal

Citation

Casadesus-Masanell, Ramon, and John Heilbron. "The Business Model: Nature and Benefits." Harvard Business School Working Paper, No. 15-089, May 2015. (Revised June 2015.)
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About The Author

Ramon Casadesus-Masanell

Strategy
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