3 Business model types
This section focuses on value creation and later on you will concentrate on value capture (aka revenue models). Baden-Fuller et al. (2017) provide an overview of the different business models that exist, based on the way value is created and captured (also see: Baden-Fuller and Haefliger, 2013; Baden-Fuller and Morgan, 2010).
Business models can be categorised between dyadic and triadic. Dyadic business models involve the exchange of a product or service between two parties. Triadic business models involve three parties in the interaction. Parties can be any type of business, organisation (e.g. a charity) or individual, such as consumers.
Dyadic business models can be split into product and solution business models. The organic farmer of the example used in Section 1 uses a product dyadic business model when selling the butter beans directly to end consumers.
Triadic business models can be either matchmaking or multi-sided. Although these terms might sound ‘foreign’ to you, you will have experienced a ‘multi-sided’ business model, such as when logging in to your Facebook account. Figure 3 (below) summarises the four categories of business. In the sections that follow you will look at each type of business model in turn.
