Although decades have passed since the business model was first discussed (Bellman et al., 1957), Amit and Zott (2001) developed this concept in an innovative and revolutionary way in response to the use of digital technologies and the Internet and to the creation of new virtual markets.

The business model is a multi-stakeholder structural model (Teece, 2010; Foss and Saebi, 2017). Its system of activities stretches beyond the limits of the company, covering all its resources, activities and actors, all linked by transaction mechanisms (Amit and Zott, 2001; Zott and Amit, 2010). Actors such as customers, suppliers and partners are not involved independently but interact in pursuit of the same objective or need—namely, the creation and appropriation of value (Brandenburger and Stuart, 1996).

The business model is also a competitive advantage, and one that differs from the market position of the company’s products (Amit and Zott, 2008). Business models consider value creation on both the supply and demand sides, contrary to traditional theories, which consider value creation only on the supply side (Massa et al., 2017). It means this concept of Musiness Model includes all kinds of activities and resources, networks of actors and company transactions (Zott et al., 2011; Massa et al., 2017).

The business model concept has been the subject of research for over two decades (Ghaziani and Ventresca, 2005; Kulins et al., 2016). Business model theorisation is beginning to become part of the academic literature (Amit and Zott, 2001), possibly due to the confluence of two realities (Zott et al., 2011; Massa et al., 2017). The first relates to the changes in the global economy due to development and digital technologies, the globalisation of markets and production chains, and regulation agreements among markets. The second is the inability of orthodox theories to explain the surprising value creation of companies such as Apple (Parker et al., 2016).

The construction of the business model has suffered from a certain fragility and lack of agreement among those who define it (Ritter and Letti, 2018; Ricciardi et al., 2016; George and Bock, 2011). Despite the existence of different definitions of varying complexity, there seems to be some consensus that the business model of a company is the “architecture of the value creation, delivery, and capture mechanisms” (Teece, 2010, p. 172). Here, the term architecture refers to “the functional relations among those mechanisms and the underlying activities” (Foss and Saebi, 2017, p. 215).

Due to the limited theoretical basis of most definitions (Kulins et al., 2016), we use the definition provided by Amit and Zott (2001). Thus, the business model is defined as “the design of transaction content, structure, and governance so as to create value through the exploitation of business opportunities” (Amit and Zott, 2001, pp. 494–495). This definition was adopted to ensure the relationship of our findings with other studies, especially the work of Zott and Amit (2007). Amit and Zott developed a business model conceptualisation that broke new ground in reference to the use of the Internet and digital technologies. Their approach is based on the unification of previous theoretical bodies: the resource-based view (Wernerfelt, 1984; Barney, 1991), configuration theory (Miles and Snow, 1978, 1986), value chain analysis (Porter, 1985), transaction cost theory (Williamson, 1975), externality theory (Katz and Shapiro, 1985), strategic network theory (Doz and Hamel, 1998; Gulati et al., 2000), Schumpeterian innovation theory (Schumpeter, 1934) and contingency theory (Donaldson, 1987; Miller, 1992). They fused these bodies of theory in a coherent theoretical aggregate that allows the interpretation, explanation and prediction of the creation of economic value in (digital) business models.

Amit and Zott’s contribution to this research is significant for the following reasons: -

Most existing business model definitions are not based on traditional theoretical bodies; they are typically theoretical. This means that they ignore many years of research on economic value creation;

The three elements incorporated by Amit and Zott (2001) in their definition of the business model are transaction content, structure and governance. These elements can be understood as basic elements that are capable of describing the architecture of a business model (Zott and Amit, 2010). However, they do not explain how such an architecture should be designed to create and capture value.

In this context, Amit and Zott (2001) suggest four configurations or designs that drive value creation in business model design: complementarity, efficiency, novelty and lock-in (Amit and Zott, 2001, 2008; Zott and Amit, 2007; Kulins et al., 2016). BMTs, together with firm and industry-specific effects, condition firm performance (Rumelt, 1991; Hawawini et al., 2003; McGahan and Porter, 2002). The following figure (Figure 1) by Amit and Zott (2001) details a series of concepts that characterise and help to identify each of the BMTs.

The business model incorporates the essence of previous theoretical insights (Amit and Zott, 2001): the resource-based view, value chain analysis, Schumpeterian innovation, strategic network theory and transaction cost economics. Amit and Zott (2001) establish these four dimensions of value creation based on their presence in these traditional theories. Figure 2 summarises how firmly the BMTs are anchored in these theories.

- Complementarity

The essence of designing business models for complementarities is the synchronisation of resources and capabilities (inputs) or products and services (outputs). Complementarities are present when the value of the whole exceeds the sum of the values of the parts (Zott and Amit, 2002, Milgrom and Roberts, 1995; Ennen and Richter, 2010). The resource-based view highlights the role of complementarities among strategic assets as a source of value creation (Amit and Schoemaker, 1993). Strategic network theory highlights the importance of complementarities among network participants (Gulati, 1999). Therefore, complementarities can be expected to increase the value of the firm by allowing income to grow.

- Efficiency

Efficiency is described by Zott and Amit (2002) as the reduction of transaction costs and the optimisation of a company’s resources, compared to its peers, by the agents involved in its system of activities. Efficiency includes the time that managers and staffs spend searching for customers and suppliers, communicating with their equivalents in other firms, travel expenses, physical space for assemblies and processing of paper documents, as well as production expenses and inventory management (Lucking-Reiley and Spulber, 2001). Transaction costs can also be borne by customers, for example, in the form of search costs. In addition to these direct costs of economic transactions, there are indirect costs, such as the costs of adverse selection, moral hazard and retention (Williamson, 1975). Therefore, efficiency creates value directly for clients and can serve as an incentive.

- Lock-in

The design of a business model to increase lock-in is made possible by providing incentives for customers, suppliers and partners to engage in repeat transactions and by creating disincentives to switch to rivals (Zott and Amit, 2002). Lock-in can manifest itself through sunk costs (Parayre, 1995). It can also manifest itself through exchange costs, which are anchored in the Williamson (1975) transaction costs framework. Similarly, it can manifest itself as network externalities (Boshuijzen-van Burken and Haftor, 2017), which have their roots in strategic network theory (Katz and Shapiro, 1985; Shapiro and Varian, 1999) and which refer to situations where the value of a product or service to a user depends not only on the product itself but of the number of users consuming that product or service (Fuentelsaz et al., 2002). Amit and Zott (2001) suggest that under the RBV, a company’s strategic assets, such as its brand name and trust between buyers and sellers, contribute to lock-in.

- Novelty

The essence of designing novel business models is to conceive and adopt new ways of conducting economic exchanges (Amit and Zott, 2001; Zott and Amit, 2007). This can be achieved, for example, by uniting previously unconnected parties, linking participants of transactions in new ways or designing new transaction mechanisms (Zott and Amit, 2002). The unique characteristics of virtual markets (i.e., the removal of geographical and physical constraints, the potential reversal of information flow from customers to suppliers, and other novel techniques of bundling and channelling information) make the possibilities for innovation seem endless (Amit and Zott, 2001).

Understanding the interconnections between the design elements of the business model is fundamental to view the role of the business model not only as a way of generating value but also as a way of retaining value that has already been created. A good example is provided by examining the lock-in dimension (Amit and Zott, 2001). It is the only BMT that is not necessarily beneficial to customers because it is based on imposing switching costs on them. Therefore, it may have to be combined with other dimensions to constitute a significant value driver. Thus, Zott and Amit (2007) found no statistically significant impact when testing lock-in business model designs. Therefore, research on combinations with other design themes should be conducted because such research could provide interesting findings (Kulins et al., 2016).

In their early studies, where they propose the importance of BMTs, Amit and Zott (2001) refer to the need for interdependence of sources of value creation and describe their role in e-commerce. The following figure (Figure 3) summarises the relationships that the authors describe between the BMTs in determining variation in company performance.

Subsequent studies have tried empirically to demonstrate the real consequences of the combination of different BMTs. Kulins et al. (2016) tested the effect of different combinations, such as novelty with lock-in and efficiency with complementarity and lock-in. The study of the interaction between novelty and efficiency has led different researchers to different conclusions. This combination has been observed by Zott and Amit (2007) to have slightly negative effects, whereas Kulins et al. (2016) concluded a significant interaction in support of company performance.

Other factors are involved in the effect of BMTs on the success or failure of a company. These include environmental factors, contextual factors, different market strategies and evolutionary factors. One example is the study of the interaction between business models focused on novelty or efficiency and an environmental factor such as a company’s degree of access to the external resources it needs (or munificence).

The product market strategy (PMS) is the way a company decides to position itself with respect to its competitors in its target market areas. It refers to decisions regarding price, quality and timing (Geroski, 1997; Porter, 1985), which drive customer demand. The two fundamental strategic choices are therefore (1) product market positioning, cost leadership, and product or service differentiation (Porter, 1985); and (2) when to enter the market (Montgomery and Lieberman, 1988).

Some interactions between BMTs and PMS focused on testing their effect on company performance have been confirmed empirically. Examples include business models focused on novelty, along with differentiation, cost leadership and PMS based on early market entry (Amit and Zott, 2008).

According to Beck and Rygl (2015) and Verhoef et al. (2015), omnichannel retailing is defined as: The sale of goods or services through all extended channels, which have been entirely linked to each other from the customer’s perspective, allowing full interaction between all channels and/or from the retailer’s perspective, establishing total control of channel integration.

Constant and rapid technological development has led in recent years to the transition from the traditional retail model of “brick and mortar” to a digital retail model. In doing so, the online and physical stores of modern retailers are integrated into a seamless shopping experience on digital and physical platforms (Piotrowicz and Cuthbertson, 2014; Ovezmyradov and Kurata, 2017). Omnichannel’s retailing is a relatively recent phenomenon that has been transforming the retail landscape, and which has not yet been solidly established among retailers due to its complexity and lack of understanding, and the lack of research and empirical experience in this regard.

Omnichannel retailing is differs from multichannel retail in terms of customer participation and retailer control. While omnichannel retailing derive synergies from the integration of the entire channel through the rationalisation of multichannel interactions with customers, multichannel retail focuses on the importance of the presence of retailers through various channels (Li et al., 2018).

The goal of omnichannel is to coordinate fragmented service processes and technologies across multiple channels to deliver a consistent and integrated customer experience. In an omnichannel environment, a focal enterprise designs its transaction content, structure and governance to create and retain value by exploiting business opportunities (Amit and Zott, 2001). This design requires a basic functional architecture (Foss and Saebi, 2017) to boost company performance. The study of BMTs is fundamental for the effectiveness of the transformation towards an omnichannel model because these value creation configurations are implicit in the very definition of omnichannel. Omnichannel involves novelty in services, technology, transaction mechanisms and relationships between actors; efficiency in the management of resources in a predominantly digital environment; complementarity between channels, products or services, and transactions to offer actors a more valuable experience than with a single channel; and actions focused on lock-in to maintain the company’s position with respect to competitors in a digital commercial network that is constantly changing and innovating.

Taking a broader view of organisations that transcends traditional business boundaries has been shown to be valuable in understanding wealth creation and performance. A study from this perspective can thus inspire new research on the relationship between company strategy, structure and boundaries. Probing into this area, we identified specific research gaps that can serve as a starting point and guide towards our main goal of advancing the strategic literature based on Amit and Zott’s business model theory. Such an approach reveals the best practices and guidelines for a successful transformation process to the digital environment, as well as the creation and retention of value for the company. Some of the theoretical gaps are summarised below.

In their early work, Amit and Zott (2001) developed the notion of the business model and its sources of value creation. This initial development was based on a qualitative and exploratory study. Subsequent endeavours have empirically attempted to test the effects of BMTs on variation in company performance. Independently, we have found empirical confirmation of the model for the themes of novelty (Zott and Amit, 2007; Wei et al., 2014; Brettel et al., 2012) and efficiency (Zott and Amit, 2007; Brettel et al., 2012). However, performance improvements derived from complementarity or lock-in have not been empirically confirmed, except in isolated case studies (Parker et al., 2016). This is the first theoretical gap.

Despite the interdependence of the theoretically explained BMTs and the effects of their interactions, only some of the possible combinations of BMTs have been tested. Examples of this testing are given by Kulins et al. (2016) and Zott and Amit (2007), in the case of the combination of efficiency and novelty, and by Kulins et al. (2016), in the case of the combination of novelty and lock-in and of complementarity, lock-in and efficiency. Accordingly, a second gap is the empirical study of untested BMT combinations.

Amit and Zott (2008) tested several BMTs together with PMS (differentiation, cost leadership or market entry) to link the notion of BMT to the traditional knowledge of competitive strategy. The cited study shows that, while a PMS and BMTs can act on their own as a source of economic value creation, the combination of BMTs and PMS can also act on their own as another source of economic value creation. However, not all combinations of PMS and BMTs have been tested to date. This is the third gap.

In recent times, research has examined the evolution of the business model, but considering only its internal elements such as products, activities or actors (Demil and Lecocq, 2010; Foss and Saebi, 2017). However, there is scant reference to the evolution and transformation of BMTs in terms of their effect on performance. The existing research on the variability of BMTs has been conducted from a static perspective by studying cross-sectional data from public companies. However, we know that business model configurations are transformed over time, so this dominant study approach does not consider these evolutionary and temporal dynamics (Nelson et al., 2018). For a complete picture of the role of BMTs in the dynamics of the company instead of just a static view at a given moment, the effectiveness of specific combinations of theories must be studied through, for example, panel data analysis. This approach would combine the longitudinal dimension with the cross-sectional dimension. It is therefore an area for further research, resulting in the fourth theoretical gap.

As noted above, some, but not all, of the four BMTs have been tested quantitatively (Zott and Amit, 2007). Other themes and combinations of themes still have to be tested in other contexts. This is a key theoretical gap.

As mentioned earlier, the combination of BMTs and PMS can also act on its own as another source of economic value creation (Amit and Zott, 2008). However, as discussed at length, not all combinations of PMS and BMTs have been tested. Therefore, several new combinations require thorough research to support such claims.

Based on the conclusions of the study by Amit and Zott (2008), we assume that a company’s strategy and business model are different constructs that affect the company’s ability to generate market value and that the different types of PMS are complementary to the business model. Companies looking for market strategies for similar products can do so with very different business models and can thus increase their value with respect to competitors. Therefore, a business model can affect a company’s performance in the same way that the company’s PMS does.

Amit and Zott (2008) evaluated the combination of two of the business model designs (novelty and efficiency) with the PMS (cost leadership, differentiation and market entry). They concluded that positive interactions are found in the case of novelty and suggested that these concepts are complementary rather than substitutive. In the case of efficiency, the study did not provide support for a positive interaction and did not reveal any complementarity with a differentiation strategy or with the timing of market entry.

The figure below (Figure 4) summarises the proven combinations of the BMTs and PMS, as well as their results. The figure also shows interactions that have not been tested and the need to replicate and add new knowledge about BMT and PMS combinations in different contexts and at different times. This matter is discussed later on in this paper.

Proposal 4:

The proposal is to further investigate the relationship between research model design and conventional PMS, especially in regard to the dimensions of value creation based on complementarities and linkages.

Sohl et al. (2017) concluded that different types of business models can initially determine performance heterogeneity and that the effect of the business model varies with the company’s operational experience (resource and capacity development). Even if a BMT itself and the combinations of BMTs and PMS are tested statically in companies, these forms evolve. Thus far, there has been little research on the time-dependent dynamics of evolution, which is an attractive third area of research.

References are found in the article by Kulins et al. (2016). Their study leaves room for the construction of theories about the evolution of a business model within a central company and its adaptation to different influences over time. Those authors propose as an essential and promising additional research topic to address the question of whether the full range of theoretically possible configurations is available to all companies in all sectors at all times.

Time must pass for organisations to adapt to change. This idea was proposed by Foss and Saebi (2018) in relation to the role of external actors (Ferreira et al., 2013), changes in the competitive environment (De Reuver et al., 2009), new information and communication technologies or ICTs (Pateli and Giaglis, 2005; Sabatier et al., 2012; Wirtz et al., 2010), and dynamic capabilities (Achtenhagen et al., 2013) to bring about change in the business model. According to Foss and Saebi (2018), the link between environmental conditions and organisational response has been studied in several streams of strategic and organisational literature.

The combinations of BMTs and PMS have been investigated at a specific, static time (Figure 5). The proposal is for them to be investigated longitudinally to capture their dynamics and transformations.

Proposal 5:

The greater the adaptation of the company to different influences over time, the more effective the specific combinations of BMTs will be and hence the greater the positive impact will be on its performance.