Cyber-physical systems turn products into connected devices that enable interaction among individu-als, organizations, and other objects. They find application in areas such as healthcare and automo-tive, enabling new value propositions created by multiple players for a shared customer. Despite the perceived business potential, practitioners in primarily physical industries struggle to analyze and design value creation mechanisms for cyber-physical systems. The prevailing business model concep-tualizations follow a mono-organizational logic and are unable to express hybrid and interactive val-ue creation. To close this gap, we apply a design science research approach to develop and evaluate a taxonomy of design elements to represent business models for cyber-physical systems. Through an analysis of 21 use cases of value creation mechanisms in the automotive industry, we identify the de-sign elements adopted in practice; we then validate the identified design elements via 13 interviews and a workshop with our target users, obtaining a final taxonomy comprising 23 design elements. We improve the expressive power of business model conceptualizations by identifying specific roles, con-trol points, and value exchanges in a network of players, representing hybrid and interactive value creation.



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