7.3 Sustainable Business Modelling Business models play a critical role in addressing the synergetic relationship between innovation, entrepreneurial behaviour, and sustainability. Lüdeke-Freund (2020) introduces a framework for business models for sustainability innovation called the BMfSI framework, where business models mediate between sustainability innovations and business cases for sustainability. Osterwalder et al. (2005) defines a business model as a conceptual tool that contains a set of elements and their relationships, allowing the expression of a company’s logic of earning money. It is a description of the value a company offers to its customers. It includes the architecture of the firm and its network of partners for creating value and to generate profitable and sustainable revenue streams. Thus, a business model positions itself in the firm and links the business strategy with the business organisation and technological capabilities, forming part of the business environment (see Figure 7.3). An important assumption is that the so-called valley of death is surpassed and that the management of the enterprise has worked out a financial structure for the business model based on either internal-, debt-, equity financing or public support such as grants. Figure 7.3: The Business Model’s Place in the Firm (Source: Osterwalder et al. (2005), modified by the author) Schaltegger et al. (2012) discusses three types of sustainable business strategies: defensive, accommodative, and proactive. Defensive strategies focus primarily on cost and risk minimisation, requiring minimal or no changes to the business model. Companies adopting this approach implement cost and efficiency-oriented measures, often treating sustainability issues as risks, with reputational activities being mostly superficial. In contrast, accommodative strategies involve moderate adjustments to the business model, such as renewing production processes, engaging new value network partners, or entering sustainability-driven market segments. These strategies aim to enhance reputation, brand value, and employee attractiveness, with sustainability becoming a more integrated consideration. Proactive strategies, however, represent a radical shift in business logic, 7.3. Sustainable Business Modelling 43 company offers to its customers. It includes the architecture of the firm and its network of partners for creating value and to generate profitable and sustainable revenue streams. Thus, a business model positions itself in the firm and links the business strategy with the business organisation and technological capabilities, forming part of the business environment (see Figure 7.3). An important assumption is that the so‐called valley of death is surpassed and that the management of the enterprise has worked out a financial structure for the business model based on either internal-, debt-, equity financing or public support such as grants. Figure 7.3: The Business Model’s Place in the Firm (Source: Osterwalder et al. (2005), modified by the author) Schaltegger et al. (2012) discusses three types of sustainable business strategies: defensive, accommodative, and proactive. Defensive strategies focus primarily on cost and risk minimisation, requiring minimal or no changes to the business model. Companies adopting this approach implement cost and efficiency-oriented measures, often treating sustainability issues as risks, with reputational activities being mostly superficial. In contrast, accommodative strategies involve moderate adjustments to the business model, such as renewing production processes, engaging new value network partners, or entering sustainability-driven market segments. These strategies aim to enhance reputation, brand value, and employee attractiveness, with sustainability becoming a more integrated consideration. Proactive strategies, however, represent a radical shift in business logic, leading to major 39 7.3 Sustainable Business Modelling
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