One of the biggest surprises from the Analyst Attitude Survey, which produces the data for our KeaCircle awards, is that many AR spokespeople are missing out on a surprising element of pitching to analysts: mentioning business models. Indeed, analysts’ responses to the summer 2017 AAS tell us that a firm’s business model is a more important part of the discussions that analysts have than spokespeople appreciate. The business model is around 25% more important to analysts than it is to spokespeople. Fewer than one analyst in five reports that spokespeople have a greater interest in business models.
Our researcher Esther Boyer has been speaking with analysts to explore this gap, assisted by Taimi Rytkönen. Our research plan starts from a model published earlier this year by two strategic management professors, Nicolai J. Foss at Bocconi and Tina Saebi at the Norwegian School of Economics. Foss and Saebi have a deep interest in an unusual paradigmatic problem in understanding business models: the poverty of definitions and explanations of the term ‘business model’ itself.
Both in the survey and in briefings attended by Kea Company colleagues, we’ve noted that analysts are increasingly likely to ask about business models. Both the questions and the responses cover a wide field: is there another business which is a template for the one under discussion? Is there a specific way in which the business is able to capture some of the value it is creating for customers? Are there changes in markets that produce specific windows of opportunities for actors that act in, or initiate, market segments?
Luckily for us, many of the analysts who have taken part in the survey have volunteered to take part in follow-up interviews.