Challenges in the business models of creative professional service firms

Abstract

Recent studies have shown that professionals in the built environment need new or improved business strategies to survive in increasingly dynamic and competitive environments. To gain insight into how professional businesses can be successfully reshaped, a profound understanding of their business models is necessary. So far, business model research in project-based organisations has focused on large companies that are primarily profit-oriented. Work that addresses the business challenges of small, creative service firms is extremely limited. This study aims to develop knowledge around the business models of architectural firms by focusing on their value propositions, value creation and value capture. Iterating between business model literature and empirical data from 41 semi-structured interviews with Dutch architects and clients, architectural firms’ business models were systematically examined regarding their
configurations and outcomes. This resulted in an overview of key business model components, their interrelationships and accompanying challenges for architectural firms. The study contributes to theory and practice by the development of a strategic decision making framework that specifically addresses the business model challenges of small creative service firms. The framework helps practitioners to enhance their business strategies and to develop new or improved business models with increased benefits.