📝 Original Info
- Title: Sustainable Business Models: A Review
- ArXiv ID: 1907.10052
- Date: 2019-07-25
- Authors: Researchers from original ArXiv paper
📝 Abstract
The concept of the sustainable business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural, or other contexts, in a sustainable way. The process of sustainable business model construction forms an innovative part of a business strategy. Different industries and businesses have utilized sustainable business models concept to satisfy their economic, environmental, and social goals simultaneously. However, the success, popularity, and progress of sustainable business models in different application domains are not clear. To explore this issue, this research provides a comprehensive review of sustainable business models literature in various application areas. Notable sustainable business models are identified and further classified in fourteen unique categories, and in every category, the progress -- either failure or success -- has been reviewed, and the research gaps are discussed. Taxonomy of the applications includes innovation, management and marketing, entrepreneurship, energy, fashion, healthcare, agri-food, supply chain management, circular economy, developing countries, engineering, construction and real estate, mobility and transportation, and hospitality. The key contribution of this study is that it provides an insight into the state of the art of sustainable business models in the various application areas and future research directions. This paper concludes that popularity and the success rate of sustainable business models in all application domains have been increased along with the increasing use of advanced technologies.
💡 Deep Analysis
Deep Dive into Sustainable Business Models: A Review.
The concept of the sustainable business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural, or other contexts, in a sustainable way. The process of sustainable business model construction forms an innovative part of a business strategy. Different industries and businesses have utilized sustainable business models concept to satisfy their economic, environmental, and social goals simultaneously. However, the success, popularity, and progress of sustainable business models in different application domains are not clear. To explore this issue, this research provides a comprehensive review of sustainable business models literature in various application areas. Notable sustainable business models are identified and further classified in fourteen unique categories, and in every category, the progress – either failure or success – has been reviewed, and the research gaps are discussed. Taxonomy of the applications includ
📄 Full Content
The business model concept is an abstract representation of the value flow and the interactions between value elements of an organizational unit. The essential value elements of organizations are concerned with proposition, creation, delivering, and capturing value. A simplified way of communicating the connection and function of these elements is vital in the success of any business [1]. For this purpose, the concept of business model has originated to facilitate explanation of complex business ideas more efficiently. Through a business model, the business workflow is communicated to investors in detail within a short time frame [2]. In fact, the effective representation of planning, analysis, communication, and implementation of organizational complex units' performance are reported as one of the major reasons behind the popularity of business models [3]. Geissdoerfer et al. [4] present a detailed review of the different types and various definitions of business models where a vast number of definitions are presented. Model of an organizational system [5], a simplified characteristic of business concept [6], and a reduced scope of business [7] are suggested as the various types of business models. For decades the vital sustainability issues with their major societal and environmental effects influencing human beings and nature had not been the priorities of most business model types. Nevertheless, business models, for achieving the sustainability goals of companies have finally become under pressure to transform into a more sustainable economic system.
Internationalization along with the urge to keep up with the sustainable development goals ha s made the worldwide competition among the firms more complex with conventional business models struggling with finding appropriate solutions. In this context, the alternative concept of sustainable business model has brought competitive advantage to organizations through empowering the conventional business models meeting the sustainable development goals while maintaining productivity and profitability [8,9]. Thus, creating value for the triple bottom line, i.e. economic, society and environment, has been the ultimate goal of sustainable business models [10]. Sustainable business models have the great potential to incorporate the principles of sustainability and integrate sustainability goals into the value proposition, value creation, and value capture activities of businesses [11]. Sustainable business models aim at employing proactive multi-stakeholder management, innovation, and long-term perspective to meet sustainability goals. Sustainable business models, therefore, have been effectively contributing in reducing the harmful effects of business activities on the environment and society through providing solutions to help firms meet their economic and sustainability goals simultaneously [12]. Thus, the concept of sustainable business model has emerged to provide a platform for integrating sustainability considerations [13]. From this perspective circular business models [14] share similarity with sustainable business models. However, they include additional characteristics which are mainly concerned with slowing, intensifying, and narrowing resource loops [4].
The review paper of Evans et al. [15] shows how sustainable business models have helped businesses to achieve their sustainability ambitions. Further research, e.g. Boons et al. [11], Geissdoerfer et al. [4] and Schaltegger et al. [9] provide a collection of the definitions to the concept of sustainable business model. According to Lüdeke-Freund [16], sustainable business models are tools for delivering social and environmental sustainability to the industrial systems. Whilst, there are constraints for understanding the sustainable business models and the available innovative alternatives for transformation to sustainability [14]. Despite numerous research on sustainable business models in the literature, there is no comprehensive picture of how firms in different industries can implement sustainability in their business models. Although there exists literature on the definitions and overview of the concept of sustainable business model, there is a research gap in the progress and evaluation of the performance of sustainable business models in each specific application domain. The spread and effectiveness of sustainable business models in business domains have not been identified. Furthermore, the applicability, popularity, success, and future trends in various business domains have been not discussed yet. Consequently, the contribution of this article is to present a classification of the widespread applications of sustainable business models in addition to an in-depth investigation of various application domains considering the success and failure cases.
The rest of this paper is structured as follow. Section two presents the methodology of the review. Section three presents the taxonomy of the re
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