Business models of mining machinery industry

  • Posted on November 30, 2014 at 9:06 am

Few concepts in business today are as widely discussedand as seldom systematically
studiedas the concept of business models. Many people attribute the success of companies
like eBay, Dell, and Amazon, for example, to the ways they used new technologiesnot just to
make their operations more efficientbut to create new business models altogether. In spite of all the talk about business models, however, there have been very few large-scale systematic empirical studies of them. We do not even know, for instance, how common the different kinds of business models are in the economy and whether some business models have better financial performance than others.
This paper provides a first attempt to answer these basic questions about business models.
To answer the questions, we first develop a comprehensive typology of four basic types of
business models and 16 specialized variations of these basic types. We hypothesize that this
typology can be used to classify any for-profit enterprise that exists in todays economy. As artial confirmation of this hypothesis, we classify the business models of the 1000 largest US enterprises. Finally, we analyze various kinds of financial performance data for the different kinds of business models to determine whether some models perform better than others. We find that some business models are much more common than others, and that some
do, indeed, perform better than others.
For example, the most common business models for large US companies involve selling ownership of assets to customers (e.g. manufacturers and distributors). However, in the time period of our study (fiscal year 2000), these business models perform less well (in terms of both profitability and market value) than business models in which customers usebut dont buyassets (e.g. landlords, lenders, publishers, and contractors).
This study does not answer other questions like why these differences exist, whether they
are changing over time, or how individual companies can exploit or modify their business
models to improve their performance. But we hope that the work described here will provide a
foundation for future work on these questions. >

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