List of Key Terms

The term ‘business model’ has historically been defined differently by different academics and consultants, with no common consensus being established. It is not until the last few years that a common definition of what a ‘business model’ is has started to emerge, with an increasing number of authors emphasizing the concepts of value creation and value capture as central to the definition.

One challenge is that frameworks developed from the perspective of enabling business model innovation, are often equated with a definition of the concept of the business model itself. This creates considerable confusion in terms of the differences between the business model of a company, the business model concept as such, and ways of describing business models by adopting different perspectives and frameworks.

In order to provide posts that are easy to follow and to reduce the risk of misunderstandings and confusion, I use the definitions below:

• Business model – the way an organization creates and captures value
• Business model concept – the general idea of illustrating how value is created and captured
• Business model element – a component of how value is created and captured by an organization
• Business model framework – an abstraction to describe and represent different business models
• Business model framework element (or framework element) – a component of a business model framework
• Business model innovation – an innovative business model or the process of innovating a business model
• Business modeling – the process of testing and simulating different business models

Please consult the list above when confused about my use of any of the terms.