Business Model Prototyping and Evaluation from an Ecosystem Perspective: An Actor-based Modeling Framework for Using System Dynamics (title of the paper)

A key challenge for companies engaged in business model innovation is to prototype and evaluate new business models quantitatively. The complexity of this challenge is compounded when companies operate in business ecosystems, due to the need for joint value creation and mutual value capture. However, extant evaluation approaches, such as spreadsheets, are insufficient for addressing the complex, multilateral dynamics inherent to ecosystems. Though research indicates that system dynamics simulation represents a promising approach to overcoming this gap, its application in ecosystem settings remains an unexplored area of research. Therefore, we develop an actor-based modeling framework to leverage system dynamics for business model prototyping and evaluation from an ecosystem perspective. Furthermore, we present nine good design practices to guide effectively a business model’s system dynamics modeling process in the context of a business model innovation project. Our findings are derived from a two-and-a-half-year action design research project conducted in collaboration with two German industrial companies. Our research contributes to the existing body of knowledge on business model innovation, particularly regarding quantitative business model prototyping and evaluation prior to market implementation. (abstract of the paper)