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Emerald Article: An evaluation model of business value for research and development of technology to improve the competitiveness of companies Sang-Chul Lee, Kwang-Hyuk Im, Sang-Chan Park, Liu Fan

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To cite this document: Sang-Chul Lee, Kwang-Hyuk Im, Sang-Chan Park, Liu Fan, (2012),"An evaluation model of business value for research and development of technology to improve the competitiveness of companies", Asian Journal on Quality, Vol. 13 Iss: 1 pp. 22 - 36 Permanent link to this document: http://dx.doi.org/10.1108/15982681211237806 Downloaded on: 28-01-2013 References: This document contains references to 23 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 66 times since 2012. *

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An evaluation model of business value for research and development of technology to improve the competitiveness of companies
Sang-Chul Lee
Department of Business Administration, Korea Christian University, Seoul, Korea

Kwang-Hyuk Im
Department of Electronic Commerce, Pai Chai University, Daejoeon, Korea

Sang-Chan Park
School Of Management, Khyhee University, Seoul, Korea, and

Liu Fan
School of Management/Management Reserach Institute, Kyung Hee University, Seoul, Korea
Abstract
Purpose The purpose of this research is to establish an evaluation model for business value of a companys existing patents portfolio to improve the performance of the technology development and the companys competitiveness through identifying the right direction for technology development. Design/methodology/approach This research targets 11 leading companies in ten manufacturing industries and one e-business industry and evaluates their existing patents portfolios. This research developed a core business model set by using clustering and classification. For comparative analysis, this research sets NAVER as a leading company and DAUM as a following company in e-business industry. Findings This research proposes nine business model components to evaluate a patent from business perspectives. Second, by evaluating a companys existing patents portfolio in view of business model components, this research proposes the importance of business model components and developed six core business models. Through these role models, companies can analyze the directions for development in the future and find companies with similar characteristics. Originality/value This research develops a methodology to provide the direction for technology development of a company by evaluating technologies through the patents portfolio of a company rather than evaluating the value of a single patent. It is different from previous research that evaluates R&D from technology perspectives; this research takes account of the business value of technologies by developing tools in view of business model components. Keywords Research and development, Business model, Patents, Clustering, Benchmarking Paper type Research paper

1. Introduction Today innovation can be seen from the perspectives of economics, business, technology, sociology, and engineering. Innovation can relate to business models,
Asian Journal on Quality Vol. 13 No. 1, 2012 pp. 22-36 r Emerald Group Publishing Limited 1598-2688 DOI 10.1108/15982681211237806

This work was supported by the Industrial Strategic Technology Development Program (10035481-2011-02, R&D Integrated Modeling and Simulation Supporting Service) funded by the Ministry of Knowledge Economy (MKE, Korea).

markets, organizations, processes, products, services, and supply chains. According to the APO Innovation Strategy and Framework (APO, 2009), innovation shall be viewed from a broad perspective, not merely as technological improvement. As to the APO Innovation Framework, three major triangles of material, human, and knowledge form a cycle of knowledge creation by utilizing both material and human resources. The derived knowledge is fed into the resource side for further enrichment. Viewed from the angle of innovation policy, patents aim to foster innovation in the private sector by allowing inventors to profit from their inventions (OECD, 2002). Patents have long been considered to represent a trade-off between incentives to innovate on the one hand, and competition in the market and diffusion of technology on the other. Changes in patent policy in OECD countries over the past two decades have fostered the use and enforcement of patents with the aim of encouraging investments in innovation and enhancing the dissemination of knowledge. Markets for technology are increasingly important for the circulation of knowledge. Patents play a pivotal role in the development of technology transactions. Governments need to improve their knowledge of the functioning of markets for technology and the effect of such markets on economic performance in order to support their development in the most socially beneficial directions. Services are a new subject matter for patents. The impact of patents on innovation and diffusion in this area has not yet to be systematically evaluated, and such evaluation is sorely needed. With respect to both APO and OECD concepts, special guidance to foster the company in private sector for research and development (R&D) of technology transaction becomes an utmost necessity. In a first step to establish the guidance, we need to identify whether a companys existing patents portfolio fits well to the right direction in technology development, which in turn, leads to economic performance in the market. In this regard, representing patents in view of business model components should be the natural thing to do, because a business model describes the design or architecture of the value creation, delivery, and captures mechanisms employed by the business enterprise. The essence of a business model defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit (Hedman and Kalling, 2003; Ostenwalder et al., 2005; Shafer et al., 2005). Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created entirely new models that depend solely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs. Identifying which role model companies should benchmark is another critical step in comparing a companys patents portfolio. By identifying the role model companys patents portfolio described in terms of business model components, we can disclose necessary conditions of technology development guiding principles as to whether a company has developed technologies in economically successful direction or not. We can carefully select role model companies from each and all industries and describe their patents portfolio in terms of business model components. Business focus will differ among different industries and companies. In other words, the relative importance of business model components will vary from company to company, thus we can identify a set of most influential business components for each company. Some role model companies from different industries may share the same subset of most influential business model components. In contrast, even a single role model company may have more than one subset of most influential business model components. If we can obtain a sufficient number of most influential business

Model of business value for R&D 23

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component subsets reflecting companies patents portfolios, we could summarize those subsets into a binary knowledge tree. The nodes of this knowledge tree are most influential business components and their threshold values, and each leaf of a branch on the knowledge tree is a role model for the companys patents portfolio. The node threshold value is induced from the relative importance of each business component between role model companies patents portfolios. With this binary knowledge tree, any company having its own patents portfolio can find the role model company whose patents portfolio matches the most with it. The purpose of this research is to establish an evaluation model for business value of a companys existing patents portfolio to improve the performance of the technology development and the competitiveness through identifying the right direction of technology development. For this purpose, this objective of the research is divided into three parts: (1) (2) to propose business model components to evaluate a patent from business perspectives; to evaluate a companys existing patents portfolio in view of business model components and to propose a benchmarking role model by developing a knowledge tree; and to compare the leading and following companys patents and provide a direction to the followers.

(3)

To establish an evaluation model, this research targets 11 leading companies ten manufacturing industries and one e-business industry and evaluates their existing patents portfolios. For comparative analysis, this research sets NAVER as a leading company and DAUM as a following company in the e-business industry. 2. Development of business model components 2.1 Business model Although various studies have been conducted on business models to date, no general agreement on a standard definition of business model exists. Ostenwalder et al. (2005) define a business model as a conceptual tool that contains a set of elements and their relationships and allows the expressing of the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers, and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams. By pointing out that the concept of business model is often used independently from theory, i.e. the meaning of model components and their interrelations are relatively obscure, Hedman and Kalling (2003) offer an outline for a conceptual business model, and propose that it should include customers and competitors, the offering, activities and organization, resources and factor market interactions. By reviewing the above literature, Morris et al. (2005) suggest that diversity in the available definitions of a business model poses substantive challenges for delimiting the nature and components of a model and determining what constitutes a good model. It also leads to confusion in terminology, as business model, strategy, business concept, revenue model, and economic model are often used interchangeably. Moreover, the business model has been referred to as architecture, design, pattern, plan, method, assumption, and statement. After a general review of literature, they propose an integrative definition as: A business model is a concise representation of how an interrelated set of decision

variables in the areas of venture strategy, architecture, and economics are addressed to create sustainable competitive advantage in defined markets. To help managers better understand business models, Shafer et al. (2005) review the extant literature, identify, and classify the components of business models cited therein. To address the absence of a generally accepted definition of a business model, a new definition that integrates and synthesizes the earlier work is offered. To them a business model is a representation of the underlining core logic and strategic choices for creating and capturing value within a value network. In their work in 2001, Amit and Zott (2001) have defined the business model as depicting the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities. In 2010, they argue that the activity system perspective on business models is consistent with the various approaches that have been advanced in the literature. Thus, a business model can be viewed as a template of how a firm conducts business, how it delivers value to stakeholders (e.g. the focal firms, customers, partners, etc.), and how it links factor and product markets. The activity systems perspective addresses all these vital issues, and gives managers and academics a language and a conceptual toolbox to address 246 them and engage in insightful dialogue and creative design. Following a general concept of a business model, which refers to the articulation between different areas of a firms activity designed to produce a proposition of value to customers, Demil and Lecocq (2010) note two different uses of the term. The first is the static approach as a blueprint for the coherence between core business model components. The second refers to a more transformational approach, using the concept as a tool to address change and innovation in the organization, or in the model itself. Through the literature reviewed above, we come to a consensus that a business model can be comprehended as demonstrating how an organization purchases and sells goods and services as well as obtains profits. 2.2 Business model components As discussed previously, there is no general agreement on a standard definition of business model. Thus, rather than conducting research on the definition of business models, recent research takes more efforts to study the components of business models (Stahler, 2002; Hamel, 2000; Linder and Cantrell, 2000; Osterwalder et al., 2005). Although there are diverse terms defining business model components, most of them share certain similarities in meaning. Stahler (2002) suggests four components such as value proposition, product and service, architecture, and profit model. Hamel (2000) suggests four components such as the scope of core strategy, strategic resources, value network, and customer interface. Similarly, Linder and Cantrell (2000) take a comprehensive approach to a business model. They define a business model by using price model, profit model, distribution model, commercial process model, commercial relations using the internet, and value proposition. Based on the Balanced Scorecard approach, Ostenwalder et al. (2005) propose the nine components of a business model and suggest that components of business models in literature can be matched to the suggested nine components. In this study, the nine components of a business model developed by Osterwalder (2010) are adopted because it is a general model that can best define the components of a business model. Based on a review of previous literature, this research finds a similar result to the nine components of a business model suggested by Ostenwalder et al.

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(2005) (as shown in Appendix 1). The framework of the nine components is shown in Table I. First, product implies the types of project, product, or value proposition offered to the market. Second, customer interface defines the target customers of an organization, and how the organization is going to deliver the goods and services to these customers as well as establish strong relations with them. Third, infrastructure management concerns how a business entity deals with infrastructure or logistics issues with efficiency and the participating network partners in the process. Finally, financial aspect defines the profit model, and concerns sustainability of the cost structure and business model (Ostenwalder et al., 2005; Ostenwalder, 2010). 3. Evaluation of a companys patents portfolio 3.1 Data In order to compare a companys patents portfolio and identify a benchmarking role model, this research selects 11 major leading companies: ten in manufacturing industry and one e-business company. The list of industries and major leading companies is shown in Table II. Data are collected from Korea Intellectual Property Rights Information Services (www.kipris.or.kr), with information of patents over a period of ten years from 2000 to 2009. However, since we are limited to analyzing all patents from each company, we finally get 100 sample patents from each company for analysis. Stratified sampling method is used to select samples, and the ratio of the year when the patent was published is also taken into consideration (as shown in Appendix 2). 3.2 Analysis of a companys patents portfolio First, the business value of each patent is evaluated based on nine components of business model. The patents with significant relevance to the respective business

Four pillar Product Customer interface

BM components Value propositions Customer segments Channels Customer relationships Key activities Key resources Key partnerships

Definition A value proposition is an overall view of a companys bundle of products and services that are of value to the customer The target customer is a segment of customers a company wants to offer value to A distribution channel is a means of getting in touch with the customer The relationship describes the kind of link a company establishes between itself and the customer The value configuration describes the arrangement of activities and resources that are necessary to create value for the customer A capability is the ability to execute a repeatable pattern of actions that is necessary in order to create value for the customer A partnership is a voluntarily initiated cooperative agreement between two or more companies in order to create value for the customer The cost structure is the representation in money of all the means employed in the business model The revenue model describes the way a company makes money through a variety of revenue flows

Infrastructure management

Financial aspects Table I. The nine components of business model

Cost structure Revenue stream

Industries Manufacturing Machine industries IT industries

Company

Materials industries High-tech industries Service e-Business industries

Shipping Auto Semiconductor Display Electronics Telecommunications Petrochemistry Textile Steel Bio e-Business

STX Hyundai Motors Hynix Semiconductor LG Display Samsung Electronics LG Telecom Kumho Petrochemical Cheil Industries POSCO Hanmi Pharmaceutical NAVER

Model of business value for R&D 27

Table II. List of target industries

model components are inputted 1, while those with low relevance are inputted 0. Based on an analysis on companies patents portfolio, the result reveals that there are differences for the importance of nine components among different companies (as shown in Figure 1), which means that companies develop different business models for creating value.

Revenue stream

Value proposition 1.00 Customer segments 0.80 0.60 0.40

Value proposition 1.00 Revenue stream 0.80 0.60 0.40 Customer segments

Cost structure

0.20 0.00

Channels

Cost structure

0.20 0.00

Channels

Key partnerships

Customer relationships Key activities Hyundai motors

Key partnerships

Customer relationships Key activities LG display LG telecom

Key resources STX

Key resources Hynix semiconductor Samsung electronics

Value proposition 1.00 Revenue stream 0.80 0.60 0.40 Cost structure 0.20 0.00 Channels Cost structure Customer segments Revenue stream

Value proposition 1.00 0.80 0.60 0.40 0.20 0.00 Channels Customer segments

Key partnerships

Customer relationships Key activities Cheil industries POSCO

Key partnerships

Customer relationships Key activities NAVER

Key resources Kumho petrochemical

Key resources

Figure 1. Business value of companies patents portfolios

Hanmi pharmaceutical

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The results show that most of the manufacturing companies, such as STX, Hynix Semiconductor, LG Display, Samsung Electronics, LG Telecom, Kumho Petrochemical, Cheil Industries, and Hanmi Pharmaceutical, do not have a special preference in certain components of a business model. While some of the other companies emphasize specific components of a business model, such as Hyundai Motors, POSCO, and NAVER. The patents portfolios of these three companies indicate a high emphasis on three components of value propositions, key activities, and key resources. While POSCO emphasize only these three components, Hyundai Motors also have a preference for channels. This may be explained as that, as an automobile company, Hyundai Motors need to pay attention to the channel that connects itself to its customers. At the same time, as a company in e-business industry, NAVER also needs to pay efforts to channels and key partnerships. 3.3 Clustering analysis Innovation is viewed across all industries. In doing so, clustering is a useful means to form groups with common interests and goals, and the use of role models is a good approach to level up on innovation. In order to develop a benchmarking role model, all patents of companies are clustered using two-step clustering method and are divided into groups. Clementine is used for clustering analysis, while a two-step clustering method adopting Schwarz criterion and Akaike information criterion are used for capturing the optimized number of clustering group. The result of clustering analysis shows that 1,100 patents are divided into six groups (Table III). 3.4 Development of role models for benchmarking Third, role models for benchmarking are developed using classification. This research obtains a sufficient number of most influential business component subsets reflecting companies patents portfolios. Clementine is used for classification analysis, and C5 algorism is adopted. The results indicate that six role models are developed, as shown in Table IV. The order of components indicates their importance, where key activities are revealed to be the most important component in finding a role model. Table V shows the benchmarking role models that are owned by the role model companies. The results indicate that a company has more than one subset of role models. Most of the manufacturing companies, such as STX, Hynix Semiconductor, LG Display, Samsung Electronics, LG Telecom, Kumho Petrochemical, Cheil Industries, and Hanmi Pharmaceutical, have role model 2 (RM2), which means that their business
C1 Channels Customer relationships Cost structure Customer segment Key activities Key partnerships Key resources Revenue stream Value propositions Note: C, cluster 0.48 0.49 0.52 0.51 0.10 0.41 0.66 0.51 0.53 C2 0.54 0.52 0.52 0.59 0.62 0.67 0.10 0.47 0.49 C3 0.79 0.56 0.45 0.56 0.90 0.76 0.90 0.45 0.90 C4 0.65 0.45 0.45 0.47 0.87 0.62 0.90 0.51 0.10 C5 0.14 0.25 0.67 0.27 0.90 0.27 0.87 0.59 0.82 C6 0.39 0.33 0.10 0.16 0.90 0.10 0.84 0.10 0.90

Table III. Results of clustering

Components Key activities Key resources Key partnerships Customer segments Value proposition Channels Customer relationships Cost structure Revenue stream

RM1 0 0 1

RM2 0 1

RM3 1 0 1

RM4 1 1 0 1 0 0

RM5 1 1 0 1 0 1

RM6 1 1 1 1 1

Model of business value for R&D 29

Table IV. The node of benchmarking role models

Notes: RM, role model; 0 or 1: threshold value of a binary knowledge tree

Role model STX Hyundai Motors Hynix Semiconductor LG Display Samsung Electronics LG Telecom Kumho Petrochemical Cheil Industries POSCO Hanmi Pharmaceutical NAVER Total

RM1 12 1 13 13 7 17 9 17 0 12 1 102

RM2 30 1 12 30 31 21 30 18 3 25 0 201

RM3 17 4 7 10 10 19 7 18 0 14 9 115

RM4 2 24 12 2 2 2 2 1 48 4 13 112

RM5 0 3 14 7 2 1 3 0 22 0 0 52

RM6 1 34 9 2 4 4 0 2 6 Table V. 2 60 The number of companies portfolios in role models 124

models are oriented at key resources. Besides, RM1 and RM3 are also showing a relevant importance. In contrast, Hyundai Motors, POSCO, and NAVER have different role models. Hyundai Motors set RM4 and RM6 as its most important role models, while POSCO regards RM4 more significant. NAVER sets RM6 as the most important role model. With this role model set, any company having its own patents portfolio can find the role model company whose patents portfolio matches with it most. 4. Comparative analysis on patents between the leading company and following company Following companies are in need of the direction of technology development from leading companies in their industry. With this role model set, they can find the core business role model and a benchmarking role model company. This research selects NAVER and DAUM as leading and following companies, respectively, in e-business industry for a comparative analysis. Annual patents of NAVER and DAUM are shown in Table VI. It is shown that DAUM owns similar business models to NAVER. That is to say, DAUM follows the business model of its leading company in its industry. It also provides implications when comparing the changes of patents and its market share. DAUM developed a large quantity of patents in 2007, with many patents developed in its core business model in

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particular. In contrast, NAVER developed most patents in other fields rather than in its core business model in 2008 and it developed very few patents in 2009. This results in an influence on the market share in 2009 (shown in Table VII). One of the reasons can be explained that NAVER may develop technologies even without notifying the direction for technology development. Therefore, as is suggested in the purpose of this research, companies should develop technologies after analyzing the patents portfolio, which can provide a guide on the direction of technology development. 5. Conclusion and limitations R&D of technology is important for improving a companys competitiveness. Thus, it is necessary to analyze the patents portfolio in view of business value and notify the direction for technology development exactly. Therefore, this research aims to establish an evaluation model for a business value of a companys existing patents portfolio to identify the right direction for technology development and to identify which role model companies should be benchmarked. To test the evaluation model, this research selected core leading companies in 11 industries and their patents. First, this research proposes the nine business model components to evaluate a patent from business perspectives. Second, by evaluating a companys existing patents portfolio in view of business model components, this research suggests the companys development direction and deduces six core business models. Through these role models, companies are able to analyze the direction for technology development and find out the companies share similar characteristics for analysis. This research develops a methodology to provide the direction for technology development of a company by evaluating technologies through the patents portfolio of a company rather than evaluating the value of a single patent. By contrast with previous research which evaluates R&D from technology perspectives, this research takes account of the business value of technologies by developing tools in view of business model components. Although this research has the above implications, it still has limitations. Due to the stratified sampling method, which selects 100 samples from each company, there are

BM BM6 BM4 Others Table VI. Annual patents of NAVER Total and DAUM (%)

Company NAVER DAUM NAVER DAUM NAVER DAUM NAVER DAUM

2002 0.0 6.7 1.0 0.0 0.0 0.0 6.7 1.0

2003 5.0 1.3 0.0 0.0 1.0 0.0 1.3 6.0

2004 12.0 1.3 3.0 1.3 6.0 0.0 2.7 21.0

2005 10.0 9.3 2.0 0.0 0.0 1.3 10.7 12.0

2006 10.0 8.0 3.0 1.3 0.0 2.7 12.0 13.0

2007 11.0 21.3 9.0 6.7 1.0 6.7 34.7 21.0

2008 10.0 8.0 2.0 9.3 11.0 5.3 22.7 23.0

2009 2.0 8.0 0.0 1.3 1.0 0.0 9.3 3.0

Total 60 64 20 20 20 16 100 100

2001 Table VII. Market share of NAVER and DAUM (%) NAVER DAUM

2002

2003

2004 30.9 24.7

2005 38.4 21.7

2006 48.5 16.7

2007 61.5 14.3

2008 72.3 11.1

2009 68.6 23.2

24.0

certain errors in sampling. It is necessary to take careful consideration when adapting the result of this research to other companies, because this research does not include all patents of each company for analysis. It is better to collect all data of an industry for analysis in the future for further study. Second, this research only takes ten typical industries for analysis. It is necessary to consider more companies from diverse industries for future study. Furthermore, the companies selected in this research are only domestic companies in Korea, it would be better if foreign companies are taken into consideration, or even for comparative analysis.
References APO (2009), Innovation Framework and Strategies: An APO Perspective, Asian Productivity Organization, Tokyo. Applegate, L.M. (2001), E-business models: making sense of the Internet business landscape, in Dickson, G., Gary, W. and DeSanctis, G. (Eds), Information Technology and the Future Enterprise: New Models for Managers, Prentice Hall, Upper Saddle River, NJ, pp. 49-169. Afuah, A. and Tucci, C. (2003), Internet Business Models and Strategies, McGraw-Hill, Boston, MA. Amit, R. and Zott, C. (2001), Value creation in e-business, Strategic Management Journal, Vol. 22 Nos 6-7, pp. 493-520. Chesbrough, H. and Rosenbloom, R.S. (2000), The Role of the Business Model in Capturing Value from Innovation: Evidence from XEROX Corporations Technology Spinoff Companies, Harvard Business School, Boston, MA. Demil, B. and Lecocq, X. (2010), Business model evolution: in search of dynamic consistency, Long Range Planning, Vol. 43 Nos 2-3, pp. 227-46. Gordijn, J. (2002), Value-Based Requirements Engineering Exploring Innovative e-Commerce Ideas, Vrije Universiteit, Amsterdam. Hamel, G. (2000), Leading the Revolution, Harvard Business School Press, Boston, MA. Hedman, J. and Kalling, T. (2003), The business model concept: theoretical underpinnings and empirical illustrations, European Journal of Information Systems, Vol. 12 No. 1, pp. 49-59. Johnson, M.W., Christensen, C.M. and Kagermann, H. (2008), Reinventing your business model, Harvard Business Review, Vol. 86 No. 12, pp. 50-9. Linder, J. and Cantrell, S. (2000), Changing Business Models: Surveying the Landscape, Institute for Strategic Change, Accenture, Chicago, IL. Mahadevan, B. (2000), Business models for internet-based e-commerce: an anatomy, California Management Review, Vol. 42 No. 4, pp. 55-69. Maitland, C. and Van de Kar, E. (2002), First BITA case study experiences with regard to complex value systems, BITA-B4U Symposium Business Models for Innovative Mobile Services, Delft. Morris, M., Schindehutte, M. and Allen, J. (2005), The entrepreneurs business model: toward a unified perspective, Journal of Business Research, Vol. 58 No. 6, pp. 726-35. OECD (2002), Measuring the Information Economy, Organization for Economic Cooperation and Development (OECD), Paris. Osterwalder, A. (2010), Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, Wiley, New York, NY.

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Osterwalder, A., Pigneur, Y. and Tucci, C.L. (2005), Clarifying business models: origins, present, and future of the concept, Communications of the Association for Information Systems, Vol. 15 No. 1, pp. 1-40. Stahler, P. (2002), Business Models as an Unit of Analysis for Strategizing, International Workshop on Business Models, Lausanne.

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Shafer, S.M., Smith, H.J. and Linder, J.C. (2005), The power of business models, Business Horizons, Vol. 48 No. 48, pp. 199-207. Tapscott, D., Lowi, A. and Ticoll, D. (2000), Digital Capital Harnessing the Power of Business Webs, Harvard Business School Press, Boston, MA. Weill, P. and Vitale, M.R. (2001), Place to Space: Migrating to eBusiness Models, Harvard Business School Press, Boston, MA. Yunus, M., Moingeon, B. and Ortega, L.L. (2010), Building social business models: lessons from the Grameen experience, Long Range Planning, Vol. 43 Nos 2-3, pp. 308-25. Further reading Dubosson, M., Osterwalder, A. and Pigneur, Y. (2002), eBusiness model design, classification and measurements, Thunderbird International Business Review, Vol. 44 No. 1, pp. 5-23.

Appendix 1

Component Structure of the value chain Relationship Core dynamics processes Commerce relationship Logistical stream B-webs B-webs Transaction component Partners Commerce process model Core competencies, strategic assets Suppliers, partners, coalitions Pricing structure Pricing model, revenue model Revenue stream Position in the value chain Cost structure

Value proposition Key activity Key resource

Customer segmentation Channel

Customer interface

Cost Revenue Key partnership Structure model

Chesbrough Value Market and proposition segment Rosenbloom (2000) Hamel (2000) Product/ Market scope Fulfillment market scope and support, information and insight Linder and Value Channel Cantrell, proposition model (2000)

Mahadevan Value stream (2000) Tapscott et al. (2000) Amit and Transaction Zott (2001) component Applegate Product and Market (2001) services opportunity offered Marketing/ sales model Customer relationship Architecture Customer segments Channels Brand and reputation Architectural configuration Operating Organization model and culture, management model Infrastructure and network of partners Architecture Core E-business competencies, schematics competitive strategy factors

Benefits to firm and stakeholders Financial aspects Revenue model Source of revenue

Dubosson et al. (2002)

Product

Stahler (2001) Value proposition Weill and Value Vitale (2001) proposition, strategic objective

(continued)

Model of business value for R&D 33

Table AI. Ontologies of components of business model

34

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Component E3-value configuration Companies involved in creating value Actors

Gordijn (2002) Maitland and Vande Kar (2002)

Value offering Market segment Value Market proposition, segment assumed value Afuah and Customer Scope Tucci (2003) value Customer

Hedman and Offering Kalling (2003)

Morris et al. Factors Market factor (2005) related to the offering Key resources

Johnson et al. Customer (2008) value proposition Demil and Value Lecocq (2010) proposition Yunus et al. Value (2010) proposition

Table AI. Customer segmentation Channel Key activity Key resource Customer interface Cost Revenue Key partnership Structure model Value Value exchange exchange Revenue model Cost Pricing, structure revenue, source Connected Capabilities activities, value configuration Activities and Resources, Competitors organization supply of factor and production inputs Competitive Internal strategy capability factors factors, personal/ investor factors Key processes Organization Resources and competences Value constellation Economic factors Profit formula Profit equation

Value proposition

Appendix 2

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Total

STX

Hyundai Motors

Hynix Semiconductor

LG Display

Samsung Electronics

LG Telecom

Kumho Petrochemical

Cheil Industries

POSCO

Hanmi Pharmaceutical

NAVER

0 (0) 12 (4,009) 14 (4,222) 2 (695) 5 (4,874) 8 (95) 12 (32) 9 (146) 14 (1,559) 0 (0) 0 (1)

0 (0) 14 (4,171) 12 (3,615) 3 (1,095) 7 (6,318) 6 (72) 11 (29) 8 (130) 25 (2,803) 12 (19) 0 (2)

0 (0) 13 (4,017) 11 (3,368) 6 (1,883) 9 (7,993) 4 (44) 16 (40) 9 (140) 19 (2,219) 12 (18) 1 (9)

1 (2) 12 (3,931) 9 (2,637) 8 (2,404) 12 (10,554) 5 (61) 8 (20) 10 (154) 11 (1,310) 12 (18) 6 (68)

4 (8) 11 (3,878) 10 (2,928) 6 (1,871) 15 (14,080) 8 (94) 11 (30) 8 (122) 6 (716) 14 (20) 21 (234)

29 (51) 8 (2,646) 9 (2,684) 5 (1,746) 14 (12,605) 13 (148) 4 (11) 7 (116) 3 (392) 10 (16) 13 (140)

0 (0) 10 (3,017) 12 (3,472) 57 (18,321) 11 (10,117) 20 (227) 10 (26) 16 (252) 8 (883) 17 (26) 21 (234)

50 (89) 10 (3,027) 12 (3,483) 4 (1,310) 8 (7,091) 19 (226) 19 (50) 22 (350) 9 (1,005) 10 (16) 23 (258)

16 (28) 1 (225) 3 (863) 1 (236) 3 (2,848) 1 (11) 3 (8) 4 (69) 2 (226) 3 (5) 3 (46)

100 (178) 100 (31,637) 100 (29,750) 100 (31,958) 100 (91,246) 100 (1,161) 100 (262) 100 (1,594) 100 (11,418) 100 (154) 100 (1,125)

Total

0 (0) 9 (2,716) 8 (2,478) 8 (2,397) 16 (14,766) 16 (183) 6 (16) 7 (115) 3 (305) 10 (16) 12 (133) 1,100

35

Table AII. Data sets of companies patents

Model of business value for R&D

AJQ 13,1

36

About the authors Sang-Chul Lee is an Assistant Professor in the Department of Management Information Systems at Korea Christian University, Korea. He holds BS from Asia United Theological University, and MBA and PhD in Management Information Systems from Kyung Hee University. His research interests include e-business strategies, e-commerce, data mining, customer relationship management and multigroup structural equation modelling (MSEM). He has published papers in Cyber Psychology, Behavior, and Social Networking, Total Quality Management & Business Excellence, Expert Systems with Applications, Journal of MIS Research, Korean Management Review, Journal of the Korea Society for Quality Management, Information Systems Review, etc. Kwang Hyuk Im is an Assistant Professor of Electronic Commerce at Pai Chai University. He received his MS and PhD degrees in Industrial Engineering from Korea Advanced Institute of Science and Technology (KAIST) in 2000 and 2006, respectively. His teaching and research specialties are in the fields of data mining, intelligent systems, electronic commerce and customer relationship management (CRM). Sang-Chan Park is a Professor at Department of Healthcare Management, KyungHee University. He was formerly a Professor at the Department of Industrial Engineering of the Korea Advanced Institute of Science and Technology. He was formerly an Assistant Professor at the Department of Information Systems of the School of Business, University of Wisconsin in Madison. He received his Bachelor of Management degree from the Seoul National University, MBA degree from the University of Minneapolis, and his PhD degree in MIS from the University of Illinois, Urbana-Champaign. His research interest includes the application of artificial intelligence, especially machine learning methodologies, to the design of knowledge-based systems for various management principles. He has also expanded his research domain into internet on things, healthcare management, management of technology, total quality management, quality information systems, e-commerce, e-learning, e-government, data mining and educational technology for the gifted. Liu Fan is currently a PhD Candidate at Kyung Hee University, and is working as a Researcher for E-business Center of School of Management, Kyung Hee University. She received her MS degree from Kyung Hee University, Korea, in 2009. Her research interest includes consumer behaviour in e-business, management information systems and quality management. Liu Fan has had many papers published in international journals and conferences. Her previous work has been published in Cyber Psychology, Behavior, and Social Networking, International Journal of E-education, E-business, E-management and E-learning, Journal of Korean Society for Quality Management, etc. Liu Fan is the corresponding author and can be contacted at: fanliu@khu.ac.kr

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