Wednesday, December 15, 2010

De Mey and De Ridder's Business Model Framework

Short description of framework: A framework illustrating how value is created and captured in the interaction between organizations through relationships and transactions.

Main strengths: The framework captures relationships, monetary and non-monetary transactions between organizations, and provides a snapshot of the interactions and dependencies on certain external actors. Transactions between several organizations in multiple steps can be illustrated, enabling a good understanding for the different revenue streams.

The framework was originally created by De Mey and De Ridder ( in 2009 to create a common visual language and consisted of 10 framework elements initially focusing on the sales side of a business with the only actors being the company itself and its client. The remaining 8 framework elements was items that can be transferred between the company and its client; product, service, experience, reputation, exposure, attention, money and less money.

In 2010 the business model framework was revisited and updated to include 16 framework elements to capture more aspects of a business case. Still, De Mey and De Ridder argues that they prefer not to include what they call secondary stakeholders, showing the supplier side of a business case.

Framework details
The 2010 version contains 16 framework elements, divided into players and objects to exchange further described below. De Mey and De Ridder do not provide their own definitions of the framework elements, so the definitions below are of the general meaning of the terms, based on how the objects are used by De Mey and De Ridder.

My Company - The element represents the organization being described, often at the center of the illustration.

Company - The element represents an external for-profit organization, often the customer in a business-to-business business model.

Consumer - The element represents any individuals or households that use products and services.

Supplier - The element represents any product or service provider to the organization being described.

Non-profit - The element represents organizations such as charity organizations that have an impact on the business model being described.

Government - The element represents an organization or agency, through which a political unit exercises its authority, controls and administers public policy.

Product - The element represents any physical or digital thing produced by labor or effort.

Service - The element represents the act of providing utility without the transfer of ownership.

Experience - The element represents the event of undergoing an emotional feeling.

Exposure/Attention - The element represents the event of concentrating on some features of the environment.

Reputation -The element represents a social evaluation of a person or organization.

Money - The element represents anything that is generally accepted as payment for products and services.

Less Money -The element represents a lower amount of money than the main money object.

Credits - The element represents a fictional currency that can be used as payment for certain products and services.

Data - The element represents information such as content, data and knowledge.

Rights - The element represents a legal freedom to act or refrain from acting.

Example using the framework
In the illustration below De Mey and De Ridder illustrates the business model of Niiu, a German start-up providing customized physical newspapers. Niiu will provide personalized and customized newspapers based on content from a variety of different news companies enabling the consumer to combine different sections from different newspapers. By using print-on-demand technology Niiu will create a unique paper version and deliver to each subscriber. The reader will pay for the newspaper and be exposed to targeted advertising based on their content preferences.

Video illustrating the framework:

Tools for using the framework:
Related publications of interest:
  • Weill, P., & Vitale, M. (2001). Place to space: migrating to ebusiness models. Boston: Harvard Business Press.
  • Gordijn, J., & Akkermans, H. (2001). Designing and Evaluating E-Business Models. Intelligent E-Business .
  • Poel, M., Renda, A., & Ballon, P. (2007). Business model analysis as a new tool for policy evaluation: policies for digital platforms. Research Paper . Emerald Group Publishing Limited.

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