Sunday, January 11, 2009

Multi-Layer Business Models

This is the last post in a series of four on my view on business models, more specifically the different directions for product and service refinement and monetary flow. The other posts have be on One-Sided Business Models, Two-Sided Business Models and Horizontal Business Models.

When the refinement of products and services, or the monetary flow comes from different industries I refer to it as Multi-Layer Business Models.

Cross-industry technology, IPR and brand licensing is common Multi-Layer Business Models in which a company in- or out-license assets to a company in another industry in return for upfront payments, royalties, shares in a joint-venture etc.

An interesting example is how companies are pushed into cross-industry collaboration and the use of Multi-Layer Business Models through technology development. The convergence in mobile devices where cameras, calendars, music and movie players, payment services, transport tickets etc. are all being integrated into single hand-held devices, where no company can do everything themselves, will open up for new interesting Multi-Layer Business Models.

Mobile phone operator example
In the Two-Sided Business Models example, mobile phone operators charged advertisers, brand-owners, developers of applications, content or games, instead of only charging end-users as in One-Sided Business Models. In the Horizontal Business Models example, competitors were charged for developed or in-licensed applications and services. With a Multi-Layer Business Model, different industries that would benefit from for example user-data could be approached. Value propositions towards other industries could be to provide restaurants and store owners with information on where different user-groups hang out, provide companies, governments and tourist information companies with information such as when users arrive at new destinations. Also, as described above, the convergence in mobile services open up for new cross-industry services such as movie rentals, photo printing, tickets to concerts or transportation, banking services etc.

Further reading:
One-sided business models
Two-sided business models
Horizontal business models

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