Journal of Entrepreneurship Research

Journal of Entrepreneurship Research

Performance Measurement Based on the Business Model (Case Study: Online Advertising Business)

Document Type : Research Article

Authors
Fatemeh Akbari Ahmadabadi 1
Saeed Safari 2
Reza Abbasi 2
Seyed Hossein Hakimzadeh Hosseini 3
1 Department of Industrial Management and Entrepreneurship, Faculty of Human Sciences, Shahed University, Tehran, Iran.
2 Department of Industrial Management and Entrepreneurship, Faculty of Human Sciences, Shahed University, Tehran, Iran,
3 Department of Business Management, Science and Research Branch, Islamic Azad University, Tehran, Iran.
10.22034/jer.2024.2027596.1109
Abstract
Introduction: Today's competitive business landscape necessitates that organizations continually evaluate their performance, for which they leverage an instrument known as Key Performance Indicators (KPIs). These indicators focus on the most influential aspects of organizational performance for both current and future viability. However, performance measurement systems are not easily transferable from one organization to another. Consequently, organizations often need to design customized systems encompassing all influencing factors. Since business models illustrate the logic of business operations and play a pivotal role in explaining organizational performance, performance measurement based on the business model is a pragmatic approach, enabling organizations to comprehensively understand their unique operations. The present study aimed to identify and measure performance measurement indicators based on the business model and examine them in an online advertising company.
Methodology: This research falls into the category of applied research in terms of goal and in the category of descriptive-survey research in terms of methodology. The statistical population was divided into two groups: the company’s customers and senior managers, experts, and employees of the studied company. After establishing the current business model of the studied company, this research identified and prioritized KPIs based on the business model. Using a combination of literature review and expert opinions, 180 KPIs were identified across eight categories. Subsequently, using the Delphi method and the opinions of company managers, the most important business indicators were identified and prioritized in two steps through the Analytical Hierarchy Process (AHP). Finally, the company's performance was evaluated and scored based on these indicators, using the opinions of the company's employees.
Findings: The results showed that out of the identified 180 KPIs within the customer, service, technology, organizational, financial, exchange, information exchange, and process categories, 29 KPIs were validated. According to the results, financial KPI (with a weight of 0.279), service KPI (with a weight of 0.218), organizational KPI (with a weight of 0.157), customer KPI (with a weight of 0.093), exchange KPI (with a weight of 0.092), information exchange KPI (with a weight of 0.073), process KPI (with a weight of 0.056), and technology KPI (with a weight of 0.032) were ranked as the top KPIs in order of importance. The evaluation of the company's performance based on these KPIs yielded an overall score of 515.53 out of 1000, suggesting a moderate performance level.
Conclusion/ Implications: This study emphasizes the importance of developing performance measurement systems tailored to the unique business models of organizations. By identifying and prioritizing relevant KPIs, organizations can gain deep insights into their business model's performance, better understand their decision-making processes, enhance operational efficiency, and ensure agility in the face of evolving market conditions and customer needs. The findings of this research provide a practical framework for improving performance measurement within organizations.
Keywords
Business Model
Key Performance Indicators
MCDM
Online Advertising Companies

Subjects

Afuah, A., & Tucci, C. L. (2001). Internet Business Models and Strategies: Text and Cases (2nd ed.). US: Irwin/McGraw-Hill, available at: https://www.researchgate.net/publication/215915163_Internet_Business_Models_and_Strategies_Text_and_Cases (retrieved December 2023).
Akbari Ahmadabadi, F. (2017). Identification, ranking, and measuring performance indicators based on business model (Case study: Internet advertising business) [Master's thesis, Shahed University]. [In Persian]
Amiran, H., Ghafari, M., & Sheikh, A. (2013). Management and performance measurement of the organization from idea to implementation (1st ed.). Tehran: Amiran Publications. [In Persian]
Bagheri, M., & Ranjbar, M. (2008). Internet advertising and its position in Iranian websites. IT Era, (24), Available at: https://sid.ir/paper/454112/fa (retrieved December 2023). [In Persian]
Bain & Company. (2018). Management Tools & Trends, available at: https://www.bain.com/insights/management-tools-and-trends-2017/ (retrieved December 2023).
Bouwman, H., De Reuver, M., Heikkilä, M., & Fielt, E. (2020). Business model tooling: where research and practice meet. Electronic Markets, 30(3), 413–419. doi:10.1007/s12525-020-00424-5.
Budler, M., Župič, I., & Trkman, P. (2021). The development of business model research: A bibliometric review. Journal of Business Research, 135, 480–495. doi:10.1016/j.jbusres.2021.06.045.
Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2–3), 195–215. doi:10.1016/j.lrp.2010.01.004.
Chennell, A. F., Dransfield, S. B., Field, J. B., Fisher, N. I., Saunders, I. W., Shaw, D. E., & Australia, C. (2000). OPM: a system for organisational performance measurement. Proceedings of the Performance Measurement–Past, Present and Future Conference (pp. 19-21). Cambridge University, available at: https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=0f09f6ee21c67d4848b0720eea0afda5da12ac77 (retrieved November 2024).
Chesbrough, H., & Rosenbloom, R. S. (2002). The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin‐off Companies. Industrial and Corporate Change, 11(3), 529–555. doi:10.1093/icc/11.3.529
Chiesa, V., Frattini, F., Lazzarotti, V., & Manzini, R., (2008). Designing a Performance Measurement System for the Research Activities: A Reference Framework and an Empirical Study. Journal of Engineering and Technology Management, 25, 213-225. doi:10.1016/j.jengtecman.2008.07.002.
Cross, K. F., & Lynch, R. L. (1988). The ‘SMART’ way to define and sustain success. National Productivity Review, 8(1), 23–33. doi:10.1002/npr.4040080105
Di Valentin, C., Emrich, A., Werth, D., & Loos, P. (2013). Business Modeling in the Software Industry: Conceptual Design of an Assistance System. In: Harmsen, F., Proper, H.A. (Eds.), Practice-driven research on enterprise transformation. PRET 2013 (pp. 28–42). Springer. doi:10.1007/978-3-642-38774-6_3.
Geissdoerfer, M., Morioka, S. N., De Carvalho, M. M., & Evans, S. (2018). Business models and supply chains for the circular economy. Journal of Cleaner Production, 190, 712–721. doi:10.1016/j.jclepro.2018.04.159
George, G., & Bock, A. J. (2011). The Business Model in Practice and its Implications for Entrepreneurship Research. Entrepreneurship Theory and Practice, 35(1), 83–111. doi:10.1111/j.1540-6520.2010.00424.x
Gilsing, R., Türetken, O., Özkan, B., Adali, O.E., & Grefen, P. (2020). A method for qualitative evaluation of service-dominant business models. In Proceedings of the 28th European Conference on Information Systems (ECIS), available at: https://aisel.aisnet.org/ecis2020_rp/145 (retrieved November 2024).
Gilsing, R., Wilbik, A., Grefen, P., Turetken, O., Ozkan, B., Adali, O. E., & Berkers, F. (2021). Defining business model key performance indicators using intentional linguistic summaries. Software and Systems Modeling, 20, 965-996. doi:10.1007/s10270-021-00894-x.
Gunasekaran, A., Patel, C., & McGaughey, R. E. (2004). A framework for supply chain performance measurement. International Journal of Production Economics, 87(3), 333–347. doi:10.1016/j.ijpe.2003.08.003
Hakimovich, T. M. (2024). THE SYSTEM OF KEY PERFORMANCE INDICATORS AS A TOOL IMPROVEMENTS MANAGEMENT OF THE ORGANIZATION. Gospodarka i Innowacje, 47, 353-358, Available at: https://gospodarkainnowacje-pl.openconference.us/index.php/issue_view_32/article/view/2649 (retrieved November 2024).
Hakimzadeh Hosseini, S. H. (2015). Designing a roadmap for business model change (Case study: IT-based businesses (online store)) [Master's thesis, Shahed University]. [In Persian]
Heikkila, M., Bouwman, H., Heikkila, J., Solaimani, S., & Janssen, W. (2016). Business model metrics: an Open Repository, Information Systems and E-Business Management, Springer Verlag, 14 (2), 337–366. https://doi.org/10.1007/s10257-015-0286-3.
Heikkila, M., Solaimani, S., Soudunsaari, A., Hakanen, M., Kuivaniemi, L., & Suoranta, M. (2014). Performance Estimation of Networked Business Models: Case Study on a Finnish eHealth Service Project. Journal of Business Models, 2(1), 71-88, available at: https://journalofbusinessmodels.com/issues/vol-2-no-1-2014/vol-2-no-1-pp-71-88/ (retrieved November 2024).
IRNA News Agency. (2023). The number of internet users in the country surpassed 116 million, available at: https://irna.ir/xjMnKK (retrieved December 2023). [In Persian]
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard–measures that drive performance. Harvard Business Review, 70(1), 71–79, available at: https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2 (retrieved December 2023).
Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management system. Harvard Business Review, 74(1), 75–85, available at: https://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-management-system (retrieved December 2023)
Keegan, D. P., Eiler, R. G., & Jones, C. R. (1989). Are your performance measures obsolete?. Management Accounting, 70(12), 45.
Limayem, M., Khalifa, M., & Frini, A. (2000). What Makes Costumer Buy from Internet?. IEEE Transations on Systems, Man, and Cybernetics - part A: Systems and Humans, 30(4), 421-432. doi:10.1109/3468.852436.
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, 15, 145–162. doi:10.1016/j.spc.2018.06.004.
Marr, B. (2012). 20 Years of Measuring and Managing Business Performance. Advanced Performance Institute, available at: https://scholar.google.com/scholar?q=Marr+B+%282012%29+20+Years+of+measuring+and+managing+business+performance.+San+Mateo%2C+CA.
Massa, L., Tucci, C. L., & Afuah, A. (2017). A critical assessment of business model research. Academy of Management Annals, 11(1), 73–104. doi:10.5465/annals.2014.0072.
Mateu, J. M., & Escribá-Esteve, A. (2019). Ex-ante business model evaluation methods: a proposal of improvement and applicability. Journal of Business Models, 7(5), 25-47. doi:10.5278/ojs.jbm.v7i5.3101
Mirhosseini, S. H. (2006). Internet advertising. Tadbir Monthly, 17(148). [In Persian]
Moellers, T., Von Der Burg, L., Bansemir, B., Pretzl, M., & Gassmann, O. (2019). System dynamics for corporate business model innovation. Electronic Markets, 29(3), 387–406. doi:10.1007/s12525-019-00329-y.
Montemari, M., Chiucchi, M. S., & Nielsen, C. (2019). Designing Performance Measurement Systems Using Business Models. Journal of Business Models, 7(5), 48–69. doi:10.5278/ojs.jbm.v7i5.1905.
Neely, A., Adams, C., & Crowe, P. (2001). The performance prism in practice. Measuring Business Excellence, 5(2), 6–13. doi:10.1108/13683040110385142.
Nielsen, C., & Thomsen, P. (2017). Killing the balanced scorecard to improve internal disclosure. Journal of Intellectual Capital, 18(1), 45–62. doi:10.1108/jic-02-2016-0027.
Nudurupati, S. S., Bititci, U. S., Kumar, V., & Chan, F. T. S. (2011). State of the art literature review on performance measurement. Computers & Industrial Engineering, 60(2), 279–290. doi:10.1016/j.cie.2010.11.010.
Osterwalder, A. (2004). The Business Model Ontology: A Proposition in a Design Science Approach [Doctoral thesis, Université de Lausanne], available at: https://scholar.google.com/citations?view_op=view_citation&hl=en&user=puYIpUIAAAAJ&citation_for_view=puYIpUIAAAAJ:Wp0gIr-vW9MC (retrieved December 2023).
Osterwalder, A., & Pingeur,Y. (2010). Business model generation:a hand book for visionaries, game changers and challenger. Wiley. available at: https://scholar.google.com/citations?view_op=view_citation&hl=en&user=puYIpUIAAAAJ&citation_for_view=puYIpUIAAAAJ:4OULZ7Gr8RgC (retrieved December 2023).
Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of the Association for Information Systems, 16. doi:10.17705/1cais.01601.
Parmenter, D. (2020). Key Performance Indicators: Developing, Implementing, and Using Winning KPIs (4th ed.). John Wiley & Sons. doi:10.1002/9781119620785.
Propper, C., & Deborah, W. (2003). The Use and Usefulness of Performance Measures in the Public Sector. Oxford Review of Economic Policy, 19(2), 250–267. doi:10.1093/oxrep/19.2.250.
Rezaei, J. (2011). Designing a model for evaluating and ranking the performance of hospital managers in Isfahan city using multi-criteria decision-making techniques [Master's thesis, University of Isfahan]. [In Persian]
Richardson, J. (2008). The business model: an integrative framework for strategy execution. Strategic Change, 17(5–6), 133–144. doi:10.1002/jsc.821.
Rzemieniak, M. (2015). Measuring the Effectiveness of Online Advertising Campaigns inthe Aspect of e-entrepreneurship, Procedia Computer Science, 65, 980–987. doi:10.1016/j.procs.2015.09.063.
Safari, S., & Soleimani, L. (2018). Identifying and Prioritizing Indicator of Performance Evaluation of Nonprofit Educational Institutions with Hybrid Approach of BSC and ANP and DEMATEL. International Journal of Applied Research in Management and Economics, 1(3), 14-29. doi:10.33422/ijarme.2018.10.41.
Schelp, J., & Stutz, M. (2007). A Balanced Scorecard Approach to Measure the Value of Enterprise Architecture. Via Nova Architectura, available at: https://www.alexandria.unisg.ch/handle/20.500.14171/80579.
Schoormann, T., Kaufhold, A., Behrens, D., & Knackstedt, R. (2018). Towards a typology of approaches for sustainability-oriented business model evaluation, In W. Abramowicz & A. Paschke (Eds.), Business information systems. BIS 2018. (pp. 58–70). doi:10.1007/978-3-319-93931-5_5.
Schwarz, J., Terrenghi, N., & Legner, C. (2017). From One-to-Many Business Models: Uncovering Characteristics of Business Model Portfolios. In Proceedings of the 25th European Conference on Information Systems (ECIS 2017), available at: https://serval.unil.ch/resource/serval:BIB_F22A0A91EDA7.P001/REF (retrieved December 2023).
Setiawan, I., & Purba, H., (2020). A Systematic Literature Review of Key Performance Indicators (KPIs) Implementation. Journal of Industrial Engineering and Management Research, 1(3), 200-208. doi:10.7777/jiemar.v1i3.79.
Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long range planning, 43(2-3), 172-194. doi:10.1016/j.lrp.2009.07.003.
Terrenghi, N., Schwarz, J., Legner, C., & Eisert, U. (2017). Business Model Management: Current Practices, Required Activities and IT Support. In Proceedings of the 13th International Conference on Wirtschaftsinformatik (WI 2017) (pp. 972–986). available at: https://serval.unil.ch/resource/serval:BIB_121E842BDE5D.P001/REF. (retrieved December 2023).
Trimi, S., & Berbegal-Mirabent, J. (2012). Business model innovation in entrepreneurship. International Entrepreneurship and Management Journal, 8(4), 449–465. doi:10.1007/s11365-012-0234-3.
Van De Ven, M., Lara Machado, P., Augenstein, D., Athanasopoulou, A., Aysolmaz, B., & Türetken, O. (2023). Key Performance Indicators for Business Models: A Review of Literature. In Proceedings of the 30th European Conference on Information Systems (ECIS 2022): New horizons in digitally united societies (p. 126). doi:10.1007/s10257-023-00650-2.
Van Looy, A., & Shafagatova, A. (2016). Business process performance measurement: a structured literature review of indicators, measures and metrics. Springer Plus, 5. doi:10.1186/s40064-016-3498-1.
Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Spann, M., Kundisch, D., Leimeister, J.M., & Loos, P. (2014). Business Models. Business & Information Systems Engineering, 6(1), 45–53. doi:10.1007/s12599-013-0308-y.
Wirtz, B. W. (2020). Business Model Management: Design, Adaptation, Implementation. Springer Nature. doi:10.1007/978-3-030-48017-2
Zott,c. Amit, R., & Massa, L. (2011). The Business Model: Recent Developments and Future Research. Journal of Management, 37(4), 1019-1024. doi:10.1177/0149206311406265.

  • Receive Date 03 May 2024
  • Revise Date 17 December 2024
  • Accept Date 19 December 2024