[Note: This is the 25th post in our “Papers in Brief” series. This series offers a special service as it explains the core ideas of chosen research papers in a nutshell.]
Papers in Brief (XXV) by Sarah Carroux & Florian Lüdeke-Freund (with support from Josh Haney)
Lüdeke-Freund, F.; Carroux, S.; Joyce, A.; Massa, L. & Breuer, H. (2018): The Sustainable Business Model Pattern Taxonomy – 45 Patterns to Support Sustainability-Oriented Business Model Innovation, Sustainable Production and Consumption, Vol. 15, pp. 145-162, https://doi.org/10.1016/j.spc.2018.06.004.
Background and relevance
As research in the area of sustainable business accumulates, a general sentiment is emerging that unlocking the full potential of organisations to solve ecological, social, and economic problems requires more than new products, new processes, or new organisational practices. It necessitates innovative architectures of how they create, deliver, and capture value, i.e., business models that contribute to a sustainable development of the natural environment, society, and economy (Dentchev et al., 2018; Lüdeke-Freund & Dembek, 2017; Schaltegger et al., 2016).
Business model patterns have been proposed as a promising approach for facilitating corresponding business model innovations (e.g., Remane et al., 2017). Yet, there is still scarce research on the existing kinds of potentially sustainable business model patterns. Critical research areas to be covered include: (1) definition of the term “sustainable business model pattern” (SBM pattern), (2) consolidation of current knowledge on SBM patterns, and (3) a pattern taxonomy that can be used to support business model innovation for sustainability – in research and practice.
To realise these research objectives, this paper provides a comprehensive and up-to-date overview of presently known business model patterns that hold the potential to contribute to the diffusion of ecologically and socially beneficial innovations. Accordingly, we developed a structured patterns system, a new taxonomy of 45 patterns organised into 11 groups, including experts’ expectations for their contributions to sustainable value creation.
The SBM pattern taxonomy was derived through a review of 14 studies proposing different classifications of SBMs, which identified 102 potential SBM patterns. These were critically assessed and duplicates were eliminated, resulting in a sample of 45 SBM patterns.
These were reviewed and organised into groups by 10 international experts, using a modified Delphi card-sorting method (Paul, 2008), to condense the considerable number of patterns in a way that allowed for recognising a systematic order. This resulted in the classification of the 45 SBM patterns into 11 groups. In the final step, the experts were asked to associate the SBM patterns and groups with the three dimensions of sustainable value creation (ecological, social, economic), using a survey instrument that included an interactive visualisation of the “sustainability triangle” (Kleine & von Hauff, 2009) for guidance.
The resulting SBM pattern taxonomy is comprised of 45 patterns that were each allocated to one out of the 11 identified groups based on similarities of the patterns’ problem-solution combinations (e.g., patterns that help solve primarily economic problems, or patterns describing solutions to ecological challenges such as closing resource loops; for the notion of patterns as problem-solution combinations see Alexander et al., 1977). The participating experts agreed on these groups:
- Pricing & revenue patterns
- Financing patterns
- Eco-design patterns
- Closing-the-loop patterns
- Supply chain patterns
- Giving patterns
- Access provision patterns
- Social mission patterns
- Service & performance patterns
- Cooperative patterns
- Community platform patterns
These groups can be characterised based on (i) their specific problem-solution combinations (e.g., solving the problem of limited access to health care through a specific pricing model), and (ii) their expected ecological, social, and/or economic effects (i.e., their expected contribution to sustainable value creation). Based on the experts’ feedback, the groups were located on the sustainability triangle in a way that represents their expectations for ecological, social, and/or economic value creation (Figure 1).
Figure 1. The sustainable business model pattern taxonomy (triangle view) – group and pattern level.
The taxonomy holds some practical value. For instance, it can be used as an instrument in innovation workshops to inspire new business model layouts based on single SBM patterns or pattern combinations. Furthermore, it can be used in combination with tools such as the Business Model Canvas, the Business Innovation Kit, or the Smart Business Modeler. It also holds the potential to guide future research – particularly to explore the blank spots on the SBM pattern map shown in Figure 1.
Our pattern taxonomy is based on an essential principle in business and innovation: “learning by example”. Companies that want to integrate sustainability into their business models can refer to this taxonomy for guidance and inspiration and use it as a catalogue that also includes several practical examples. Existing companies do not have to completely restart their business, but rather learn from the experiences of others and use these experiences to progress towards their own realisation of corporate sustainability.
The SBM pattern taxonomy is an efficient and effective instrument that enables practitioners and scholars alike to benefit from vast years of experience gathered in a broad range of industries and contexts, including emerging and developing countries. The SBM pattern taxonomy is dynamic in nature and can be easily expanded with new patterns and examples and can thus become the foundation for a new “pattern language” (Lüdeke-Freund et al., 2019). It can already be used for online business modelling with the Smart Business Modeler.
Alexander, C.; Ishikawa, S.; Silverstein, M.; Jacobson, M.; Fiksdahl-King, I. & Angel, S. (1977): A Pattern Language: Towns, Buildings, Construction. Cambridge, MA: Oxford University Press.
Boons, F. & Lüdeke-Freund, F. (2013): Business Models for Sustainable Innovation: State of the Art and Steps Towards a Research Agenda, Journal of Cleaner Production, Vol. 45, pp. 9-19.
Dentchev, N.; Rauter, R.; Jóhannsdóttir, L.; Snihur, Y.; Rosano, M.; Baumgartner, R.; Nyberg, T.; Tangh, X.; van Hoof, B. & Jonker, J. (2018): Embracing the variety of sustainable business models: A prolific field of research and a future research agenda, Journal of Cleaner Production, Vol. 194, No. 1, pp. 695-703.
Kleine, A. & von Hauff, M. (2009): Sustainability-Driven Implementation of Corporate Social Responsibility: Application of the Integrative Sustainability Triangle, Journal of Business Ethics, Vol. 85, pp. 517–533.
Lüdeke-Freund, F.; Bohnsack, R.; Breuer, H. & Massa, L. (2019): Research on Sustainable Business Model Patterns – Status quo, Methodological Issues, and a Research Agenda, in: Aagaard, A. (ed.): Sustainable Business Models. Houndmills: Palgrave.
Lüdeke-Freund, F. & Dembek, K. (2017): Sustainable business model research and practice: Emerging field or passing fancy?, Journal of Cleaner Production, Vol. 168, pp. 1668–1678.
Paul., C. (2008): A Modified Delphi Approach to a New Card Sorting Methodology, Journal of Usability Studies, Vol. 4, No. 1, pp. 7–30.
Remane, G.; Hanelt, A.; Tesch, J. & Kolbe, L. M. (2017): The Business Model Pattern Database – A Tool for Systematic Business Model Innovation, International Journal of Innovation Management, Vol. 21, No. 1, Article No. 1750004.