International Crowdsourcing as a business model. Challenges and Opportunities

Term Paper, 2016

14 Pages, Grade: 2,3


Table of Contents

List of Figures

1 Introduction
1.1 Objective
1.2 Structure

2 Definitions and conceptual delimitation
2.1 Crowdsourcing
2.2 Outsourcing
2.3 Business model
2.4 Value chain model

3 Impact of crowdsourcing on business models
3.1 Challenges
3.2 Opportunities

4 Conclusion and Outlook


List of Figures

Figure 1: Value chain by Porter

Figure 2: Crowdsourcing driven value chain model

1 Introduction

The globalization of markets in the past year have led to an intensification of competition. Due to this circumstances companies are forced to review their business processes. In order to make business processes more efficient and subsequently achieve competitive advantages it is necessary to involve stakeholders such as customers, suppliers, employees and the crowd.[1]

However, the process of crowdsourcing was firstly invented in 1714, when the British Government offered a Prize of £20,000 for the winner of developing a reliable method of calculating a ship’s longitude.[2]

Since the end of 2006 the term “Crowdsourcing” receives increased attention, when author Jeff Howe introduced this term in the Wired Magazine in June 2006:

“ Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call. ” [3]

Famous digital crowdsourcing projects are for example Wikipedia, iStockphoto, and 99Designs.

The raise of crowdsourcing became practicable because of the technological developments of the recent years, in particular the development of the internet. The internet allows a fast, economical

and global sourcing. Therefore specific tasks can be solved via crowdsourcing. The low costs for sourcing from the crowd comes from the decreased costs for hardware such as computers and smartphones and the low costs for data transfer via internet.[4]

The involvement of the crowd into the provision of services process are already applied in different industries and companies, e.g. IBM.[5]

1.1 Objective

The objective of this term paper is to identify the challenges and opportunities of international crowdsourcing in the business industry. Furthermore, it shows the impact on the current business models and how crowdsourcing can be used for a company to create value.

1.2 Structure

This term paper starts with a definition of crowdsourcing and business model to clarify the meaning of the words. In Chapter three the impact of crowdsourcing on business entities will be analyzed in its challenges and opportunities. Chapter four sums up the findings and gives an outlook for future developments in the field of crowdsourcing.

2 Definitions and conceptual delimitation

2.1 Crowdsourcing

Crowdsourcing is a type of solving tasks by broadcasting them to an undefined and large number of people around the globe.

The crowd consists of individuals of varying knowledge and skills. To solve the task each individual bring in their work, depending on the task. The task can be divided into technical and creative work. For example a technical task can be a translation, a transcription or website testing. Creative work for instance is logo design, business card design or packaging design.

Despite the fact that there are more than 40 definitions of crowdsourcing, they have the term broadcasting of problems to the crowd in common. [6]

Today Crowdsourcing is closely linked with the internet and mass production. The process of crowdsourcing begins by publishing a problem to be solved via the internet to the crowd. After that, a large number of individuals submit their ideas to solve this task. The best solution will be awarded.[7]

There are three typical characteristics, which define the crowdsourcing: The crowdsourcer (principal) The crowdsourcees (agents) The crowdsourcing process The crowdsourcer is responsible for the kick-off of the crowdsourcing process and defines the task to be solved. The crowdsourcing process sets the framework for the task. Here it is defined, who should be able to join the crowdsourcing task. The process can presuppose that only graphic designers with a diploma are accepted. This is a way to raise the quality of the work. The crowdsourcing task is basically managed by a web-based Crowdsourcing Platform.[8]

The motivation for the crowdsourcees are a mix of intrinsic and extrinsic factors[9]: Joy of creation

Accepting challenges

Personal and professional development Building up a reputation

Earn money or prizes


[1] Cf. Martin, N., Lessmann, S., Voß, S. (2008), p. 1251

[2] Cf. (2012)

[3] Howe, J. (2010)

[4] Cf. Roca Lizarazu, M.-D. (2012), p.2

[5] Cf. Leimeister J. M., Zogaj, S. (2013), p.10

[6] Cf. Estellés-Arolas et al. (2012), p.2

[7] Cf. Brabham, D.C. (2008)

[8] Cf. Leimeister J. M., Zogaj, S. (2013), p.19

[9] Cf. Jahnke, I., Prilla, M. (2008), p. 7

Excerpt out of 14 pages


International Crowdsourcing as a business model. Challenges and Opportunities
University of applied sciences Frankfurt a. M.
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ISBN (Book)
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Crowdsourcing, Crowd, Outsourcing, Business model, Value chain model, Challenges, Opportunities
Quote paper
Malik Dakdaki (Author), 2016, International Crowdsourcing as a business model. Challenges and Opportunities, Munich, GRIN Verlag,


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