ITS business and revenue models Chapter | 10 117the moral view, conflicts checking, accounting rules, success in the past and
relationship with partners. Products analysis is based on competitive advantage,
brand loyalty, creating new products, differentiation, sale places, and innovation
of value chain. Suppliers are defined by their negotiation power and opportunis-
tic buying. This uniqueness of the model is that it analyzes sector factors, such
as competition.
Alan Afuah (2003) divides the business model into four components
(Fig. 10.1) which influence all the activities in a company. The industry fac-
tors component analyzes the impact of market elements—competitors, barri-
ers, and customers. Resources help to create value differentiation. Cost brings
new type of value—low-cost model. Positions are about looking for the right
places, which are not occupied, or the company can deliver to the existing
market new and interesting values. Cooperation of these components creates
a successful business model and their uniqueness is a source of competitive
advantage.
According to Slávik & Bednár (2014), there are several limitations to this
model, First, it cannot define the complexity of the company. Slávik & Bednár
(2014) argue that a business model should describe a system of creating revenue
and value, their relationship with processes, and provide an overview of the
business model structure. Second, there is no connection of components into
a causal chain that would demonstrate the connectivity and bonds of elements.
Third, the model does not allow the clear practical application to concrete nu-
merical results. The model should include components—industrial factors that
do not belong to the business model. The external environment may well-deter-
mine the characteristics of the business model but is not part of it.
FIGURE 10.1 Components of business model. (Afuah, 2003)