Conceptualizing and explaining the pattern of business model adaptation in the ICT industry

Authors

Abstract

Organizations do not operate in a vacuum but are part of a large ecosystem that is affected and impacted. Changes in the business environment such as changes in rules, competition, new technologies require that the business model of the organization be adapted to these conditions. Therefore, to remain competitive in today's competitive market, organizations need to identify the environmental drivers that affect the business model, and on the other hand, create the dynamic capabilities needed for business model adaptation. The purpose of this study is to identify and explain the business model adaptation and identify the influential environmental drivers and dynamic capabilities needed for business model adaptation. For this purpose, the ICT industry has been studied and using Multi grounded theory, data analyzed from systematic literature review over the past 15 years, and interviews with 18 industry experts, which are improbably and purposefully selected using the snowball method. Finally, a model was developed in which environmental drivers affecting business model adaptation into six groups of "political", "legal", "economic", "market", "technological", "social", and "competitor factors" and the dynamic capabilities needed to adapt the business model of the ICT industry into the four groups of "External observation and evaluation", "Internal resource renewal", "External resource acquisition" and "Internal resource reconfiguration" have been conceptualized. Also, business model adaptation has been conceptualized into three groups: "value proposition adaptation", "value creation adaptation" and "value capture adaptation".

Keywords


1- Landau. Christian, Karna. Amit and Sailer. Miriam, (2016), Business model adaptation for emerging markets: a case study of a German automobile manufacturer in India, R&D Management 46, 3.
2- Saebi, T, Lasse Lien, Nicolai J. Foss, (2017), What Drives Business Model Adaptation? The Impact of Opportunities, Threats and Strategic Orientation, Long Range Planning, Volume 50, Issue 5, Pages 567-581
3- Kurti, Erdelina, and Haftor, Darek M., (2014), " The Role of Path Dependence in the Business Model Adaptation: From Traditional to Digital Business ", MCIS 2014 Proceedings. Paper 28.
4-  Saebi. Tina, (2014), Business Model Evolution, Adaptation or Innovation? A Contingency Framework on Business Model Dynamics, Environmental Change and Dynamic Capabilities, Oxford University Press, http://ssrn.com/abstract=2403151
5- Laudien, S.M., Daxböck, (2016). B. Path dependence as a barrier to business model change in manufacturing firms: insights from a multiple-case study. J Bus Econ 86, 611–645
6- Zahra, S. A., & Bogner, W. C. (2000), Technology strategy and software new ventures', Journal of Business Venturing, Volume 15, Issue 2, Pages 135-173
7- Spivack, Matthew. (2016). What to Know About Doing Business in Iran, Harvard Business Review, May 05
8- Anyanwu. Chioma, (2016), Dynamic Entrepreneurial and Managerial Role in the Front End Loading (FEL) Phase for Sensing and Seizing Emerging Technologies, Management, 6(5): 146-157
9-  Rachinger. Michael, Rauter. Romana, Müller. Christiana, Vorraber. Wolfgang, Schirgi. Eva, (2018), "Digitalization and its influence on business model innovation", Journal of Manufacturing Technology Management, Vol. 30 No. 8, pp. 1143-1160.
10- Ahokanagas, Petri and Jenni Myllykoski (2014), “The Practice of Creating and Transforming a Business Model”, Journal of Business Models 2.1, pp. 6–18
11- Kiel, D.; Arnold, C.; Voigt, K. (2017), The influence of the industrial Internet of Things on business models ofestablished manufacturing companies- A business level perspective. Technovation,68, 4–19.
12- Loebbecke, C., & Picot, A. (2015). Reflections on societal and business model transfor-mation arising from digitization and big data analytics: A research agenda. Journal ofStrategic Information Systems, 24(3), 149–157
13- Gupta, G., & Bose, I. (2019). Strategic learning for digital market pioneering: Examiningthe transformation of Wishberry's crowdfunding model. Technological Forecasting andSocial Change, Volume 146, Pages 865-876
14- Ghezzi, Antonio & Cortimiglia, Marcelo Nogueira & Frank, Alejandro Germán, (2015), "Strategy and business model design in dynamic telecommunications industries: A study on Italian mobile network operators," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 346-354.
15- Den Oever, van, K. and Martin, X. (2015), "Business Model Change: Managerial Roles and Tactics in Decision-Making", Business Models and Modelling, Advances in Strategic Management, Vol. 33), Emerald Group Publishing Limited, pp. 387-420.
16- Balocco, R., Cavallo, A., Ghezzi, A., Barbegal-Mirabent, J. (2019). Lean Business Models Change Process in Digital Entrepreneurship. Business Process Management Journal, 1-24.
17- Deslee, C. and Ammar, O. (2016), "Transforming SNCF’s business model through the evolution of participative innovation routine", European Business Review, Vol. 28 No. 4, pp. 467-485.
18- Groeger. Lars, Brucea. Kyle, Rolfe. Iain, (2019), Adapt fast or die slowly: Complex adaptive business models at Cisco Systems, Industrial Marketing Management, Volume 77, Pages 102-115
19- Battistella. Cinzia, F. De Toni. Alberto, De Zan. Giovanni, Pessot. Elena, (2017), Cultivating business model agility through focused capabilities: A multiple case study, Journal of Business Research, Volume 73, April 2017, Pages 65-82
20- Valentin, Christina Di; Emrich, Andreas; Werth, Dirk; and Loos, Peter, (2012), "Conceiving Adaptability for Business Models: A Literature-based Approach". CONF-IRM 2012 Proceedings. Paper 50
21- Dopfer, Martina, Fallahi, Sara, Kirchberger, Markus, Gassmann, Oliver, (2017), Adapt and strive: How ventures under resource constraints create value through business model adaptations, Creativity and Innovation Management, Volume26, Issue3, 233-246
22- Casadesus-Masanell, R. and Ricart, J. E. (2009). Competing through Business Models (A): Business Model Essentials», Unpublished: Module note – aid to students in the course, Competing through business models». Boston: Harvard Business School Publishing
23- Osterwalder, A., Pignuer, Y. (2010), Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers, John Wiley & Sons
24- Zott, C. & Amit, R., (2010), Business Model Design: An Activity System Perspective, Long Range Planning, 43(2-3), pp. 216-226
25- Johnson, M. (2010), «Seizing the white space» Boston, Harvard Business School Publishing
26- Teece, D. J. (2010) Business Models, Business Strategy and Innovation. Long Range Planning, 43(2-3), 172-194.
27- Balboni. Bernardo, Bortoluzzi. Guido, (2015), Business Model Adaptation and the Success of New Ventures, Journal of Entrepreneurship Management and Innovation (JEMI), Volume 11, Issue 1, 119-140
28- Clauss, Thomas, (2017), Measuring business model innovation: conceptualization, scale development, and proof of performance, R&D Management, 47.3, pp. 385-403
29- Kamprath, Martin et al. (2014). ““How to Paint the Canvas?” - The Business Model Environment Template”, XXV ISPIM Conference – Innovation for Sustainable Economy & Society.
30- Schallmo, D. R. A. and Brecht, L., (2010), «Business Model Innovation in Business-to Business Markets – Procedure and Examples», The Proceedings of the 3rd ISPIM Innovation Symposium held in Quebec City, Canada - 12- 15 December 2010
31- Jansen, J. J. P., Van Den Bosch, F. A. J., & Volberda, H. W. (2006). Exploratory innovation, exploitative innovation, and performance: Effects of organizational antecedents and environmental moderators. Management science, 52(11), 1661-1674
32- Gsodam, Petra, Romana Rauter, and Rupert J. Baumgartner (2016). “The renewable energy debate: How Austrian electric utilities are changing their business models”, Energy, Sustainability and Society 5.1, p. 724.
33- Khanagha, Saeed, Henk Volberda, and Ilan Oshri (2015). “Business model renewal and ambidexterity: structural alteration and strategy formation process during transition to a Cloud business model”, R&D Management 44.3, pp. 322–340
34- Ahlgren Ode, K., & Lagerstedt Wadin, J. (2019). Business model translation-The case of spreading a business model for solar energy. Renewable Energy, 133, 23–31.
35- Laudien, S.M., Pesch, R. (2019). Understanding the influence of digitalization on service firm business model design: a qualitative-empirical analysis. Rev Manag Sci 13, 575–587
36- Achtenhagen, L., Melin, L., and Naldi, L, (2013), Dynamics of business models-strategizing, critical capabilities and activities for sustained value creation. Long Range Planning, 46, 1–25.
37- Goldkuhl, G., & Cronholm, S. (2010). Adding theoretical grounding to Grounded Theory: Toward Multi-Grounded Theory. International Journal of Qualitative Methods. (9)2, 187-205.
38- Petticrew, M., & Roberts, H. (2008). Systematic reviews in the social sciences: A practical guide. John Wiley & Sons.
39- Creswell, W. John., Creswell, J. David. (2018). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches 5th Edition. Kindle Edition.
40- اشتراوس، آنسلم و کوربین، جولیت، (1390)، اصول روش تحقیق کیفی: نظریه مبنایی، رویه‌ها و روشها، ترجمه بیوک محمدی، تهران، پژوهشگاه علوم انسانی و مطالعات فرهنگی، چاپ سوم.
41-  Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M. and Goh, E. (2013), “The innovation bottom line”, MIT Sloan Management Review, Vol. 54, pp. 1-20.
42-  Hartmann, P.M., Hartmann, P.M., Zaki, M., Zaki, M., Feldmann, N. and Neely, A. (2016), “Capturing value from big data – a taxonomy of data-driven business models used by startup firms”, International Journal of Operations and Production Management, Vol. 36 No. 10, pp. 1382-1406.
43- Nussholz, Julia L.K. (2018), “A circular business model mapping tool for creating value from prolonged product lifetime and closed material loops”, Journal of Cleaner Production of Business venturing, 15(2), 135-173
44- Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long Range Planning, 49, 36–54.
45- Cortimiglia, M.N., Ghezzi, A. and Frank, A.G. (2016), “Business model innovation and strategy making nexus: evidence from a cross-industry mixed-methods study”, R&D Management, Vol. 46, pp. 414-432.
46- Shafer, S.M., Smith, H.J., and Linder, J.C. (2005) The power of business models. Business Horizons, 48, 199–207
47- Afuah, A. (2014) Business Model Innovation: Concepts, Analysis, and Cases. New York: Routledge
48- Eyring, M.J., Johnson, M.W. and Nair, H. (2011), “New business models in emerging markets”, Harvard Business Review, Vol. 89, pp. 89-95.
49- Christensen, C.M., Bartman, T., V. and Bever, D. (2016), “The hard truth about business model innovation”, MIT Sloan Management Review, Vol. 58, pp. 31-40
50- Mason, K. and Spring, M. (2011), “The sites and practices of business models”, Industrial Marketing Management, Vol. 40 No. 6, pp. 1032-1041
51- Demil B & Lencocg X, (2010), Business model evolution: in search of dynamic consistency, Long Range Planning, 43: 227–246.
52-  Morris, M.H., Shirokova, G. and Shatalov, A. (2013), “The business model and firm performance: the case of Russian food service ventures”, Journal of Small Business Management, Vol. 51 No. 1, pp. 46-65.
53- Yunus, M., Moingeon, B. and Lehmann-Ortega, L. (2010), “Building social business models: lessons from the grameen experience”, Long Range Planning, Vol. 43 Nos 2/3, pp. 308-325
54- Heikkila, Marikka and Jukka Heikkil, (2013), Collaborative Business Model Innovation Process for Networked Services, Co-created Effective, Agile, and Trusted eServices. Springer.
55- Buckley, P.J. and Horn, S.A. (2009) ‘Japanese multinational enterprises in China: successful adaptation of marketing strategies’, Long Range Planning, Vol. 42, No. 4, pp.495–517.
56- Santos-Vijandea, Maria Leticia and Luis Ignacio Alvarez-Gonzalez, (2007), “Innovativeness and organizational innovation in total quality oriented firms: The moderating role of market turbulence”, Technovation 27, pp. 514–532.
57- Cozzolino, A., Verona, G., & Rothaermel, F. T. (2018).  Unpacking the Disruption Process: New Technology, Business Models, and Incumbent Adaptation. Journal of Management Studies, 55(7), 1166-1202.
58- Sosna, M., Trevinyo-Rodríguez, R., Velamuri, S.R., (2010), Business model innovation through trial-and-error learning: The Naturhouse case, Long Range Planning 43 (2/3), 383–407
59- Dahan, Nicolas M, Doh, Jonathan P, Oetzel, Jennifer, Yaziji, Michael, (2010), Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets, Long range planning, Vol. 43, 2, p. 326-343
60- Bowyer, Dorothea and Ross L. Chapman (2014). “Does privatisation drive innovation? Business model innovation through stakeholder viewpoints: the case of Sydney Airport 10 year’s postprivatisation”, Journal of Management & Organization 20.365-386
61- Aspara. Jaakko, Lamberg. Juha-Antti, Laukia. Arjo, Tikkanen. Henrikki, (2011), Corporate Business Model Transformation and Inter-Organizational Cognition: The Case of Nokia, Long Range Planning, Volume 46, Issue 6, December 2013, Pages 459-474
62- Madsen, E. L. (2010). A Dynamic Capability Framework: Generic Types of Dynamic Capabilities and Their Relation to Entrepreneurship. In S. Wall, C. Zimmermann, R. Klingebiel, & D. Lange (Eds.), Strategic Reconfigurations: Building Dynamic Capabilities in Rapid Innovation-Based Industries. Edward Elgar Publishing: Cheltenham
63- Doz YL & Kosonen M, (2010), Embedding strategic agility a leadership agenda for accelerating business model renewal, Long Range Planning, 43: 370–382.
64- Velu. Chander, (2017), A Systems Perspective on Business Model Evolution: The Case of an Agricultural Information Service Provider in India, Long Range Planning, Volume 50, Issue 5, Pages 603-620
65- Coh, M., Salmi, P. & Torkkeli, M. (2005). Dynamic capabilities in SMEs- The integration of external competencies. Paper presented at the Strategic Management Society conference, October 23-26, Orlando, FL, USA
66- Eisenhardt KM, Martin JA, (2000), ‘Dynamic capabilities: what are they?’, Strategic Management Journal, 21(10/11): 1105–1121.3
67- Alsos, G. A., Borch, O. J., Ljunggren, E. & Madsen, E. L, (2008), Dynamic Capabilities – Conceptualization and Operationalization, Presented at The Academy of Management Conference, Anaheim, USA, August 8-13
68- Rindova, V. & Taylor, M. S. (2002), Dynamic Capabilities as Macro and Micro Organizational Evolution. Working paper. University of Maryland, Robert H. Smiths School of Business.
69- Gerasymenko. Violetta, Clercq. Dirk De, Sapienza. Harry J. (2014), Changing the Business Model: Effects of Venture Capital Firms and Outside CEOs on Portfolio Company Performance, Strategic Entrepreneurship Journal, Volume9, Issue1, Pages 79-98
70- Teece DJ, Pisano G & Shuen A (1997) Dynamic capabilities and strategic management. Strategic Management Journal 18(7): 509–533.
71- Borch, O. J., & Madsen, E. L. (2007), Dynamic capabilities facilitating innovative strategies in SMEs. International Journal of Technoentrepreneurship, 1:109-125
72- Teece, David J. (2018), Business models and dynamic capabilities, Long Range Planning, Volume 51, Issue 1, Pages 40-49
73- Verona, G. & Ravasi, D. (2003), Unbundling dynamic capabilities: an exploratory study of continuous product innovation. Industrial and Corporate Change, 12: 577-606
74- Hock. Marianne, Clauss. Thomas, Schulz. Esther, (2015), The impact of organizational culture on a firm's capability to innovate the business model, R&D Management, Volume46, Issue3, 433-450
75- Zollo M & Winter SG, (2002), Deliberate learning and the evolution of dynamic capabilities, Organization Science, 13(3): 339–351.
76- McKelvie, A., & Davidsson, P, (2006), From resource base to dynamic capabilities: An investigation of new firms, Paper submitted to workshop on The practice of dynamic capabilities: Theory development and research. Lancaster University Management School, UK.
77- Wang CL & Ahmed PK, (2007), Dynamic capabilities: a review and research agenda, International Journal of Management Reviews, 9(1): 31–51.
78- Lokshin, B., Gils, A. V., & Bauer, E. (2009). Crafting firm competencies to improve innovative performance. European Management Journal, 27(3), 187–196.