Walk into any real estate office right now, and the marketing conversation sounds pretty familiar. Listing videos, Instagram boosts, Zillow reviews, maybe some paid ads when things get quiet. That approach worked well for a long time, and nobody’s suggesting you throw it out entirely. But the way buyers and sellers actually find and vet who they work with is shifting in a way most of the industry hasn’t fully reckoned with yet……Continue reading….

By Patrick Hagerty

Source: Entrepreneurs

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Critics:

There are three elements to a successful platform business model. The toolbox creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants. The magnet creates pull that attracts participants to the platform. For transaction platforms, both producers and consumers must be present to achieve critical mass.

The matchmaker fosters the flow of value by making connections between producers and consumers. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. Chen (2009) stated that the business model has to take into account the capabilities of Web 2.0, such as collective intelligence, network effects, user-generated content, and the possibility of self-improving systems.

He suggested that the service industry such as the airline, traffic, transportation, hotel, restaurant, information and communications technology and online gaming industries will be able to benefit in adopting business models that take into account the characteristics of Web 2.0. He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect.

He gave the example of the success story of Amazon in making huge revenues each year by developing an open platform that supports a community of companies that re-use Amazon’s on-demand commerce services. The concept of a business model has been incorporated into certain accounting standards. For example, the International Accounting Standards Board (IASB) utilizes an “entity’s business model for managing the financial assets” as a criterion for determining whether such assets should be measured at amortized cost or at fair value in its International Financial Reporting Standard, IFRS 9. 

In their 2013 proposal for accounting for financial instruments, the Financial Accounting Standards Board also proposed a similar use of business model for classifying financial instruments. The concept of business model has also been introduced into the accounting of deferred taxes under International Financial Reporting Standards with 2010 amendments to IAS 12 addressing deferred taxes related to investment property.

Both IASB and FASB have proposed using the concept of business model in the context of reporting a lessor’s lease income and lease expense within their joint project on accounting for leases. In its 2016 lease accounting model, IFRS 16, the IASB chose not to include a criterion of “stand alone utility” in its lease definition because “entities might reach different conclusions for contracts that contain the same rights of use, depending on differences between customers’ resources or suppliers’ business models.”

The concept has also been proposed as an approach for determining the measurement and classification when accounting for insurance contracts. As a result of the increasing prominence the concept of business model has received in the context of financial reporting, the European Financial Reporting Advisory Group (EFRAG), which advises the European Union on endorsement of financial reporting standards, commenced a project on the “Role of the Business Model in Financial Reporting” in 2011.

Business model design generally refers to the activity of designing a company’s business model. It is part of the business development and business strategy process and involves design methods. Massa and Tucci (2014) highlighted the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high technology entrepreneurship, and changing an existing business model, such as when the tooling company Hilti shifted from selling its tools to a leasing model.

They suggested that the differences are so profound (for example, lack of resource in the former case and inertia and conflicts with existing configurations and organisational structures in the latter) that it could be worthwhile to adopt different terms for the two. They suggest business model design to refer to the process of crafting a business model when none is in place and business model reconfiguration for the process of changing an existing business model.

Also highlighting that the two processes are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model. Developing a framework for business model development with an emphasis on design themes, Lim (2010) proposed the environment-strategy-structure-operations (ESSO) .

Business model development which takes into consideration the alignment of the organization’s strategy with the organization’s structure, operations, and the environmental factors in achieving competitive advantage in varying combination of cost, quality, time, flexibility, innovation and affective..

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