There remains an opportunity to use the business model outside of intra-application and act as a unit of analysis for comparison between enterprises. This research applies the MIT typology to New Zealand's publicly listed companies to generate a business model landscape. Various financial metrics are used to compare the performance and patterns of different business models.
The two research questions proposed are; a business model can be used as a unit of analysis.
Introduction
Literature Review
- History
- Definitions
- Definitions: Summary
- Typology
- Typology: Summary
- Measuring performance through a business model
- Literature review: Overall Summary
Chesbrough & Rosenbloom (2002) identify the business model as "heuristic logic that connects technical potential with the realization of economic value". Further value is added with the important demarcation between strategy and a business model; "Every organization has a business model. Through Weill et al's (2006) definition, a typology can be constructed to form the units of analysis for business model comparison.
Casadesus-Masanell & Ricart (2010) state that the complexity of an individual business model is too cumbersome to analyze. Zott & Amit (2002) adapt previous research (Amit & Zott, 2000) to a transaction-based perspective that encompasses the economic exchanges enabled by the business model. Adding this creates a matrix of 16 archetypes called the MIT Business Model Archetypes (BMA).
Research Design
Methodology
- The MIT Business Model Archetypes Defined
Companies can be grouped into one of these models based on the type of assets being sold and the rights being distributed. The types of legal rights being sold; and second, the type of assets involved in the transaction. The rights that are being sold are divided into four groups, including the legal right of ownership of assets, where the sale transfers the current rights to use the asset in any way desired.
A lessor: The right to use asset takes into account a temporary sale or loan of an asset, applying restrictions on its use, while the origin of the asset retains ownership; And.
Method
- Data Collection and Classification
- Assessing Performance and Behaviour of BMAs
- Limitations
Where possible, as much information has been included to fully represent each BMA explanation captured in detail below for each analysis objective. The Briscoe Group is a well-known household brand that operates 90 stores throughout New Zealand (including Rebel Sports). An important distinction is required when reviewing the classified ads, as this is divided into three subcategories in the reported segments.
A certain percentage of the classified income segment will then be attributed as Human Resource Broker. Supporting information will be sought to approximate the percentage of income applicable to the asset type. New Zealand and USA BMA comparison of percentage of firms and percentage of revenue represented by each BMA category.
Market value (or market capitalization) is defined as the total number of shares (common stock) multiplied by the share price. Due to the simplified level of analysis, the ability to compare New Zealand results with US analyzes will be limited, so most of the analysis will be on the behavior of New Zealand BMAs. Several limitations emerged during the analysis that reduced the total number of securities used in the sample.
Twelve of the fourteen unit trusts (e.g. Aus Property Units, Aus Resource Units, Aus Dividend Units, etc.) had no financial data available and were excluded altogether. Weill et al.'s academic team consisted of several research teams that validated each step over several years of analysis.
Results
- The New Zealand Business Model Landscape 2015
- New Zealand Business Model Revenue and Net Profit 2015
- New Zealand and US comparison
- Business Model Behaviour
- Gross Shareholder Returns
- Market Valuation
- EBITDA
- ROA
- Daily Share Price Change (%)
All securities have been classified into a business model with several metrics used to show patterns of behavior. This section will summarize the results of the BMA classification and introduce the New Zealand business model. The largest number of companies is represented by the Lessor category, where it is a transaction for the legal right to use funds.
In contrast, Creator's concentration includes 44 companies representing 29% of New Zealand's listed companies in a single asset class. Switching to an analysis of asset type results, physical assets dominate the New Zealand listings with 89 companies (59%) included in this category. Skycity, Tourism Holdings, Port of Tauranga, Infratil and Auckland International Airport are examples of companies represented by the Physical Landlord model.
Each company mentioned above operates a business model where the use of large assets, often cornerstones of the business, is used to generate revenue. The following scatter diagram maps the diversity of revenue and profitability of New Zealand's publicly listed companies. Both in New Zealand and in the US, manufacturing BMAs represent approximately 30% of all listed companies.
The Lessor category now corresponds to 42% New Zealand and 43% US companies trading legal rights of asset use. This is of particular interest as the S&P/NZX50 is also included as a benchmark for comparison representing New Zealand's largest market traded shares. Market valuation is equal to the number of shares multiplied by the share price on a particular date.
The highest daily average share price change in is represented by Wholesaler / Retailers and Physical Brokers.
Key Findings and Discussion
Where it had the highest positive average change in 2015, it drops to 6th out of 9 when assessing the past 3 years. As a result, outliers have greater influence on certain results such as revenue and profit volumes. The manufacturer archetype stands out with the highest number of companies (44), but produces only 0.5% of total revenue.
Financial assets on the other hand account for nearly 70% of revenues from only 25 companies listed. A group of physical landlords shows high net profitability in the distribution diagram and is further evidenced in the net profit margin. A similar distribution of companies exists in several categories, including the Lessors (40%), physical assets (60%) and financial assets (17%).
Gross shareholder returns were interesting as the 10-year analysis proved a macro impact on the full market. Physical landlords stand out as the only BMA showing consistent positive market growth and high share prices. EBITDA follows a similar pattern with the top three positions held by Financial Trader, Financial Lessor and Physical Lessor.
The financial broker has the highest average profit on operating income, closely followed by the physical landlord. Only four of the nine BMAs showed positive growth in 2015, while all categories showed longer-term growth.
Conclusion
53 Similarities between the US business model landscape distribution of companies and New Zealand's call for further investigation. Are patterns around landlord and physical asset categories mirrored on other markets such as the ASX. Back to the original questions: can a business model be used as a unit of analysis for investment consideration.
Although this analysis is a simplified version of its predecessor, the results indicate an opportunity for academics and practitioners to further explore the performance patterns of different business models and the companies they represent.
Business Model Reference
55 (8) A human distributor buys and sells human assets. business model is illegal and rare in most places and is only included here for logical completeness. Examples: Bank of America, Fannie Mae. 9b) Insurance companies provide their customers with financial reserves that the customers can. only use if they experience losses. The fee for this service is usually called a. 10) A physical lessor sells the right to use a physical asset.
Depending on the type of asset, customer payments may be referred to as "rent", "lease", "admission" or other similar terms. This business model is common in industries such as real estate rental and leasing, lodging, airlines, and recreation. 56 assets, the customer receives certain limited rights to use the information, but the publisher usually retains the right to make additional copies and resell the information.
This business model is common in radio and television broadcasting, some forms of publishing, and some Internet-based businesses. Payment is a fee for service, often (but not always) based on the time required for the service. A further example to note is that a passenger airline will generally be considered a physical lessor – even if it provides significant human services along with its aircraft – because the essence of the service provided is to transport passengers from one place to another by aircraft .
Conversely, a package delivery service (such as Federal Express) would generally be classified as a carrier because the essence of the service offered is to have packages. 57 are picked up and delivered (usually by people) regardless of the physical means of transport used (bike, truck, train, etc.).
Categorised Securities List
USD) Intangible Landlord Intellectual Landlord DIV NZDividend Units Financial Broker Financial Broker DNZ DNZ Physical Property Landlord Physical Landlord EBO Y Ebos Group Physical Distributor Wholesaler. FSF Y Fonterra Fund Units Financial Broker Financial Broker GMT Y Goodman Property Trust Physical Landlord Physical Landlord. KPG Y KPG Limited Orders Physical Lessor Physical Lessor KRK Kirkcaldie & Stains Physical Distributor Wholesaler.
Retailer MAD Energy Mad Simply Physical Creator Manufacturer MCK Millen'm & Copth Hotels Physical Landlord Physical Landlord MDZ SmartMIDZ Financial Broker Financial Broker. Holdings Physical Lessor Physical Lessor MOA Moa Group Limited Physical Maker Manufacturer MPG Y Metro Performance Glass Physical Maker Manufacturer MRP Y Mighty River Power Physical Maker Manufacturer. PFI Y Industrial Real Estate Physical Landlord Physical Landlord PGC Pyne Gould Corp Human Landlord Contractor PGW PGG Wrightson Physical Distributor Wholesaler.
SCL Scales Corporation Physical Creator Manufacturer SCL Scales Corporation Human Lessor Contractor SCL Scales Corporation Physical Lessor Physical Lessor SCT Scott Technology Physical Creator Manufacturer SCY Smiths City Group Physical Distributor Wholesaler. SEK Seeka Kiwifruit Inds Physical Creator Manufacturer SKC Y SKYCITY Entertainment Physical Lessor Physical Lessor SKL Y Skellerup Holdings Physical Creator Manufacturer SKO Serko Limited Intangible Lessor Intellectual. Shares Physical Creator Manufacturer THL Tourism Holdings Physical Lessor Physical Lessor THL Tourism Holdings Physical Distributor Wholesaler.
TRS Training Solutions Plus Human Landlord Contractor TTK TeamTalk Physical Landlord Physical Landlord TWF Total World Units Financial Broker Financial Broker. VHP Y VITAL HEALTH Physical lessor Physical lessor VIL Veritas Investments Physical distributor Wholesaler /. Dealer WBC Y Westpac Banking Corp. AUD) Financial Distributor Financial Trader WDT Wellington Drive Tech Physical Creator Manufacturer.
ASD AusDividend Financial Broker Units ASF AusFinancials Financial Broker Units ASP AusProperty Units Financial Broker ASR AusResources Financial Broker Units. The role of the business model in capturing value from innovation: Evidence from Xerox Corporation.
