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Showing posts with the label pipeline business model

Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Evolving Business Models from Pipeline to the Platform

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Alexander Osterwalder developed a canvas to decode business model of a firm. The simplicity and linearity in terms of its organization, made it convenient and popular to shape and comprehend the business models being operationalized at the firm level. The canvas grounded on the rectilinear business and thus the assumption behind pipeline nature of the underlying firm value chain. A representative canvas is illustrated below Source: the image is borrowed from Wikipedia for a mere illustration of the model.  At the core of the business model, is the value proposition which the firm offer to its customers. In absence of clarity on value proposition, the firm is bound to agonise in terms of its business sustenance.   The key driver of the pipeline business model is the assumed flow from producers to the customers, the association being the value proposition. To any firm, there has to be a clarity of its key activities. The key activities delineate its business presence.   For a