ABSTRACT
This chapter examines the importance of the firm's business model, the underling architecture needed to create and maintain value through the value linkage model, and explains what types of business models may exist in the future. The concept of a firm's business model can be considered to conflate corporate strategy, economics, entrepreneurship and organisational design literature. The efficiency-centred business model is anchored in transaction cost economics. Transaction cost economics focuses on the cost of economic organisation and recognises that there are costs to using the market mechanism. A new business models (NBM) may represent a better way than the existing alternatives. Though NBM can be applied to different industries, the profit formula is the same and usually follows long periods of incremental change punctuated by revolutionary change. Many of firms look vastly different from those of the past, as their scope, structure and relationships are redefined across increasingly blurred industry boundaries.
