Dynamics of Business Models

Abstract

The case of the development of rural renewable energy projects is the subject of much debate due to the complexity of these markets and the difficulty of establishing businesses using a coherent business logic. This is helped by the use of frameworks such as the Business Model, but doesn’t account for the changes in these markets as well as the changes in the firms themselves. This work looks at developing the research into these changes, so called Business Model dynamics, and look specifically at the case of Indonesia. In doing so, it looks at covering two main gaps in the current research: Firstly, the gap in the literature on Business Model dynamics specifically for the case of rural renewable energy; and secondly, the gap in the literature on how renewable energy companies adapt to the rural market in Indonesia. To do so, a literature study provides the backbone of the research in terms of the Business Model’s history, its components, and the dynamics associated with it. It then goes further into defining what these dynamics consist of for the case of renewable energy in particular. This is followed by the development of a conceptual model, representing changes to the Business Model over time in a graphical representation. A case study is then performed on Indonesian companies, whereby the literature study is used as a basis for the interview questions and the conceptual model is then used on the results of this case study. Finally, the conceptual model is improved based on its application in the case studies to arrive at a final framework. The conclusions that can be drawn from this work is that there are various levels of Business Model dynamics and that these can be determined for various different types of markets. In this instance the levels of dynamics that were determined for the case of Indonesia include the list of internal and external components of the Business Model for rural renewable energy projects, their influencing factors that cause them to change, the interrelationships between the Business Model components and finally the overall change to the Business Model over time.