Heterogeneity of Value Creation Processes: A Taxonomy of Social Enterprise Business Models

Figures & data

Table 1. Summary of the different business model frameworks.

References	Value identification		Value delivery					Value capture			Other elements	No. of citations (As of Google Scholar 2021-10-05)
	Value proposition	Key resource	Offering: Transaction content	Offering: distribution channel	Offering: transaction type	Offering: geographic scope	Market participant	Revenue stream	Key activity	Cost structure
Chesbrough (2002)	√		√	√			√	√		√	Competitive strategy	6,572
Hedman & Kalling (2003)	√	√	√	√			√		√		Competitors, management processes	1,410
Morris, Schindehutte, and Allen (2005)	√		√	√		√	√	√			Investor factor, economic factor, internal capability factors	3,793
Johnson, Christensen, and Kagermann (2008)	√	√						√		√	Key process	4,162
Osterwalder and Pigneur (2010)	√	√	√	√	√		√	√	√	√	Key partnerships	15,615
Baden-Fuller and Haefliger (2013)	√		√	√			√	√		√	N/A	1,215
This study	√	√	√	√	√	√	√	√	√	√	N/A	N/A

Table 2. Key elements and analytical constructs of a business model.

	Elements		Analytical constructs
Value identification	Value proposition	Aim of the business: In addition to generating commercial value to sustain their operations, social enterprises may specifically focus on environmental and/or social value creation at their core (Freudenreich, Lüdeke-Freund, and Schaltegger 2020; Santos, Pache, and Birkholz 2015).	Environmental value creation: Efforts that aim to address environmental issues, such as preventing green gas emission, reducing the use of plastic, and saving natural resources (Landy, Roberts, and Thomas 1990) Social value creation: The creation of desired social change or social impact through the resolution of social issues (Singh 2016).
		Target Group (Customer-Beneficiary relationship): Customers of the commercial value creation and beneficiaries of its social value spill-overs. Following the conceptualisation of Santos, Pache, and Birkholz (2015), we further differentiate between three mutually exclusive situations for the overlap between customers and beneficiaries.	Customers = Beneficiaries: situation in which customers who pay for a social enterprise are the same group of people who directly^1 benefit from its impact. For example, people who use environmentally friendly products will benefit from less environmental pollution. Customers ≠ Beneficiaries: situation in which customers and beneficiaries are two different groups. For example, people who purchase fair-trade products will benefit local farmers but not themselves. Customers < Beneficiaries: situation in which customers are just one subset of the beneficiaries of a social enterprise. For example, customers shop for fair-trade products that are also environmentally friendly.
	Key resources: The most important resources for a social enterprise to offer the aimed value (Osterwalder and Pigneur 2010).		Physical resources: Physical assets a company processes such as machines, lands, factories, vehicles, and facilities (Osterwalder and Pigneur 2010) Intellectual resource: Proprietary knowledge and knowing capability such as technology, proprietary knowledge, patents, and copyrights of a social collectivity (Nahapiet and Ghoshal 1998; Osterwalder and Pigneur 2010). Human resource: Learned skills, knowledge, and experience that require some investment in education, training, or learning from individuals (Adner and Helfat 2003; Helfat and Peteraf 2003) Network resources: Social ties and relationships with external market players (Helfat and Peteraf 2003) Financial resources: The funds an organisation obtained to finance its investment activities (Osterwalder and Pigneur 2010).
Value delivery	Transaction content: Object being exchanged by an organisation, which can be products, services, or a mix of both (Casadesus-Masanell and Ricart 2010)		Product: items being exchanged by a business entity that are highly tangible, manufactured, and can be stored (Nijssen et al. 2006). Services: items being exchanged by a business entity that are highly intangible, perishable, and co-produced with customers (Nijssen et al. 2006)
	Transaction type: The format of transaction, which can be online or offline (Täuscher and Laudien 2018)		Online: situations in which customers interact with employees in a virtual environment through the website interface (e.g. Internet, online platform, or mobile APPs) to perform transactions (Broekhuizen 2006). Offline: situations in which customers interact with employees in a physical space (e.g. restaurants, shops, or supermarkets) to perform transactions (Broekhuizen 2006).
	Marketplace participant: The way in which products or services are delivered to the end customers, which includes direct and indirect distribution (Eggert, Henseler, and Hollmann 2012)		Individual customer (B2C): direct transactions of products or services between businesses and their customers who are the end-users of those products or services (Kumar and Raheja 2012) Business organisation (B2B): transactions of products or services between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer (Kumar and Raheja 2012).
	Geographic scope: The customer geographic dispersion of an organisation (Morris, Schindehutte, and Allen 2005).		Global: situations in which the geographical scope of a business covers multiple countries across different continents. Regional: situations in which the geographical scope of a business covers multiple neighbour countries within the same continent. Local: situations in which the geographical scope of a business covers the domestic country or a specific local community within the country.
	Distribution channel: The way in which products or services are delivered to the end customers, which includes direct and indirect distribution (Eggert, Henseler, and Hollmann 2012).		Direct distribution: situation where goods or services are directly delivered from the manufacturers to the end customers without any intermediaries (Eggert, Henseler, and Hollmann 2012). Indirect distribution: situation where goods or services are relied on the intermediaries/distributors to pass from the manufacturers to the end customers (Eggert, Henseler, and Hollmann 2012).
Value capture	Key revenue stream: The major revenue sources through which an organisation generates profits from its operations (Osterwalder and Pigneur 2010).		Asset sales: revenue stream that derives from selling ownership to a physical product; Usage fees: revenue stream that derives from the provision of a particular service; Brokerage fees: revenue stream that derives from the intermediation services performed on behalf of two or more parties in terms of commission fee (Osterwalder and Pigneur 2010).
	Social outcome: The most significant social impact that can be achieved in fulfilling social objectives (Doherty, Haugh, and Lyon 2014; Santos, Pache, and Birkholz 2015).		Social cohesion: practices that promotes the solidarity and connectedness among groups in a society, such as reducing wealth gap, reducing poverty, preventing modern slavery, improving working conditions, and improving the cohesion of a community (Kawachi and Berkman 2000). Labour participation: practices that contributes to the employability and the long-term work opportunities of people (e.g. the disabled, refugees, and migrants) who have been marginalised from the main job market. Environmental protection: practices that protect the natural environment, minimise harmful environmental impact, and limit secondary wastes (Panwar, Kaushik, and Kothari 2011). Physical and/or mental well-being: individual perception of happiness and life satisfaction (i.e., health) (Helliwell and Putnam 2004). It shows the extent to which individuals can use their psychological, social, and physical resources to meet a particular challenge (Dodge et al. 2012).

Table 3. Descriptive statistics of business sectors in the sample (N = 357).

Size (Mean = 67)	1-10	146	40.9%
	11-50	133	37.3%
	51-200	39	10.9%
	200+	15	4.2%
	Unknown	24	6.7%
Year of founding (Mean = 2011)	Before 2000	29	8.1%
	2000-2005	21	5.9%
	2006-2010	57	16.0%
	2011-2015	150	42.0%
	2016-2020	90	25.2%
	Missing	10	2.8%
Sector	Construction	5	1.4%
	Manufacturing	128	35.9%
	Transportation & Public Utilities	12	3.4%
	Wholesale Trade	3	0.8%
	Retail Trade	58	16.2%
	Finance, Insurance, & Real Estate	15	4.2%
	Services	129	36.1%
	Public Administration	7	2.0%

Table 4. Final cluster results, representative medoids, and percentage of total sample.

Cluster	1	2	3	4	5	6	7
Number of cases	59	52	39	50	42	42	73
Physical resources	1 (96.6%)	1 (100%)	1 (94.9%)	0 (80.0%)	1 (64.3%)	1 (92.9%)	1 (84.9%)
Human resources	0 (66.1%)	1 (98.1%)	0 (84.6%)	0 (68.0%)	1 (95.2%)	1 (90.5%)	1 (98.6%)
Intellectual resources	1 (59.3%)	0 (96.2%)	1 (76.9%)	0 (94.0%)	0 (81.0%)	0 (92.9%)	0 (94.5%)
Network resources	0 (96.6%)	0 (73.1%)	0 (89.7%)	1 (96.0%)	0 (90.5%)	0 (81.0%)	0 (90.4%)
Customers ≠ Beneficiaries	0 (76.3%)	0 (73.1%)	0 (100%)	0 (92.0%)	0 (100%)	0 (100%)	1 (100%)
Customers = Beneficiaries	0 (98.3%)	0 (100%)	1 (100%)	0 (78.0%)	1 (78.6%)	0 (95.2%)	0 (100%)
Online	1 (81.4%)	1 (80.8%)	1 (76.9%)	1 (90.0%)	0 (73.8%)	0 (88.1%)	0 (63.0%)
Indirect Distribution	1 (61.0%)	1 (44.2%)	1 (53.8%)	0 (96.0%)	0 (97.6%)	0 (95.2%)	0 (100%)
B2B	1 (93.2%)	1 (67.3%)	1 (84.6%)	1 (82.0%)	1 (64.3%)	1 (92.9%)	1 (97.3%)
B2C	1 (76.3%)	1 (96.2%)	1 (84.6%)	1 (68.0%)	1 (88.1%)	0 (57.1%)	0 (68.5%)
Asset sales	1 (93.2%)	1 (100%)	1 (84.6%)	0 (76.0%)	0 (95.2%)	0 (97.6%)	0 (98.6%)
Usage fees	0 (93.2%)	0 (100%))	0 (84.6%)	1 (60.0%)	1 (95.2%)	1 (97.6%)	1 (98.6%)
Brokerage fees	0 (98.3%)	0 (73.1%)	0 (100%)	1 (76.0%)	0 (97.6%)	0 (92.9%)	0 (94.5%)
Environmental protection	1 (72.9%)	1 (71.2%)	1 (94.9%)	1 (76.0%)	0 (85.7%)	1 (92.9%)	0 (100%)
Labour participation	0 (86.4%)	1 (100%)	0 (100%)	1 (52.0%)	0 (85.7%)	1 (88.1%)	1 (89.0%)
Social cohesion	1 (89.8%)	0 (86.5%)	0 (100%)	1 (76.0%)	0 (66.7%)	0 (78.6%)	0 (87.7%)
Well-being	0 (74.6%)	0 (96.2%)	0 (82.1%)	1 (70.0%)	1 (71.4%)	0 (85.7%)	0 (94.5%)
Cluster Type	E	C	D	F	G	B	A

Table 5. Profile information of the seven clusters.

Business model	Key resources	Customer-beneficiary relationship	Transaction content & transaction type	Distribution channel	Marketplace participant	Key revenue stream	Key social outcome
Contract Manufacturing Work Integration Social Enterprises	Physical resources Human resources	Customers ≠ Beneficiaries	Offline services provision	Direct	B2B	Usage fees	Labour participation
Green Service Work Integration Social Enterprises	Physical resources Human resources	Customers < Beneficiaries	Offline services provision	Direct	B2B, (B2C)	Usage fees	Labour participation, & Environmental protection
Green Product Work Integration Social Enterprises	Physical resources Human resources	Customers < Beneficiaries	Offline & Online product sales	Direct Indirect	B2B, B2C	Asset sales	Labour participation, & Environmental protection
Green Innovation Social Enterprises	Physical resources Intellectual resources	Customers = Beneficiaries	Offline & Online product sales	Direct Indirect	B2B, B2C	Asset sales	Environmental protection
Fair-trade Social Enterprises	Physical resources Intellectual resources	Customers < Beneficiaries	Online & Offline product sales	Direct Indirect	B2B, B2C	Asset sales	Social cohesion, & Environmental protection
Platform-based Social Enterprises	Network resources	Customers < Beneficiaries	Online service provision	Direct	B2B, B2C	Usage fees Brokerage fees	Labour participation, Social cohesion, Well-being, & Environmental protection
Community-based Social Enterprises	Physical resources Human resources	Customers = Beneficiaries	Offline service provision	Direct	B2B, B2C	Usage fees	Well-being

Figure 1. Cluster distribution across industries.

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