iMade KULeuven Long tail business models

Faculteit Economie en BedrijfswetenschappenFaculteit Economie en Bedrijfswetenschappen

Long Tail (Business Models)

Some Reflections

Prof. Bart Van Looy

Faculteit Economie en Bedrijfswetenschappen

2004, 2006.


3

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=AXonCLHQIBW2tM&tbnid=uXOhQWYQ7h-RPM:&ved=0CAUQjRw&url=http://www.woitek.org/tag/financing&ei=rgEbUqLfD8el0AWDw4DIDQ&bvm=bv.51156542,d.d2k&psig=AFQjCNHYojBcZ26klFOPXvqZLmtuJldUOw&ust=1377588004497041


2006 – E.Brynjolfsson, Y.Hu & M. Smith (Sloan Management Review)


2013 – Does the promise hold?


2013 – Does the promise hold?

• Rhapsody – difficult to create (profitable) momentum. • APPL – Majority of turnover/profit comes from products which

do not appeal to the long tail…(Itunes – currently reflecting complementary (rather than substantial) sales)

• Success stories which also imply scale, are exceptions rather than the rule?

• At the same time, ‘anecdotic’ evidence of highly successful niche players (e.g. Materialize (BE); Techshop (?) (US)–Telenor/Grameen, Aravind, India…).


2013 – Current status academic research (Web of Science)

• Long tail – Topic or Title: 40.000 +• Social Sciences: 1.601• Business & Economics: 599• Articles only: 488 • Excluding ‘science’ again: 380

• Dominance of financial journals (distribution models, risk)

• Absence of the notion Business Models• Nothing published in Journals like AMJ, SMJ, SEJ,

ETP,…


Room for elaboration/expansion


Room for elaboration/expansion

• Topics: Sustainability (financial, social, ecological) &Profitability.

Which part(s) of the value chain impose most bottlenecks (in terms of achieving scale, in a sustainable manner – which for an economist implies at least some profit)?

Are these business models limited to ‘informational’ products/services (enabled by the ‘economic principles of information’ (almost zero reproduction costs etc.)? The answer seem to be at least partly ‘no’ (e.g. personalized medicine) which reinforces the relevance of further analyzing the first question (and introducing contingencies).

• Which related concepts/topics to embrace additionally? To enact potential spillovers but also in order to move towards more encompassing concepts (e.g. business model (innovation)) so that the ‘strategic’ weight increases (and ultimately impact/relevance increases)

(user-driven innovation, crowdsourcing, open source, bop,…)