Purpose - A common thread in the modern marketing theories, such as service-dominant logic and viable systems approach, is the notion value co-creation: the locus of value creation is no longer perceived to reside within firm boundaries but value is considered to be co-created among various actors within the networked market. The evolution of value creation, from value creation by the manufacturing firm to value co-creation in a network, necessitates a corresponding change in the concepts used to depict value creation. The purpose of this paper is to investigate business models as a broader conceptualization of value co-creation that captures this change.Design methodology approach - The topic is approached by a combination of literature review and interactive research, including interactions with managers from 12 international companies.Findings - Business models are defined as configurations of 12 interrelated elements, covering market, offering, operational, and management viewpoints. The effectiveness of a business model in value co-creation is defined by the internal configurational fit between all business model elements and the external configurational fit between provider's and customers' business models.Research limitations implications - The paper contributes to the understanding on value co-creation by providing a conceptualization of the business model construct depicting value co-creation in a network. Of the 12 companies providing the empirical data, ten are within business-to-business which limits the applicability to business in general. Further, the paper indicates that within a single firm multiple parallel business models are in use.Practical implications - A firm can radically improve value co-creation by designing business models that have a high degree of internal and external configurational fit.Originality value - The originality and value of this paper lies in its analysis and discussion of co-creation of value within a business model.