Match!

Business model design and firm performance: Evidence of interactive effects from a developing economy

Published on Nov 20, 2017in European Journal of Innovation Management
· DOI :10.1108/EJIM-02-2017-0012
Blendi Gërdoçi1
Estimated H-index: 1
(University of Tirana),
Guido Bortoluzzi8
Estimated H-index: 8
(UniTS: University of Trieste),
Sidita Dibra1
Estimated H-index: 1
(University of Tirana)
Abstract
Purpose The purpose of this paper is to contribute to the literature on business model (BM) design by deepening the relationship between BM design themes and performance in a sample of firms based in a developing country. In particular, the authors deepen the relationship between business model novelty (BMN), business model efficiency (BME), the trade-off between novelty and efficiency – that the authors call BM ambidexterity – and performance. Design/methodology/approach Data are drawn from a sample of 107 manufacturing and service firms based in a developing country (Albania). Hierarchical regression is used to assess the impact on firm performance from the two BM design themes and their interaction. Findings The authors find novelty-centred BM design is significantly related to firm performance while efficiency-centred design has no direct effect on performance. However, the authors also find that BME positively moderates the relationship between BMN and firm performance. Research limitations/implications The relationship between BM design and firm performance can be better understood if contextualised. In the paper, the authors find that different types of BM designs have different impacts on the performance of firms based in a developing economy. While novelty matters, quite surprisingly the authors find no support for efficiency. Additionally, the authors find the interaction between the two design themes (BM ambidexterity) to have a positive impact on firm performance. Practical implications The surveyed firms based in a developing economy appear to benefit from novelty-centred BM designs. Efficiency-centred designs have a more ambiguous role: while efficiency alone seems not to pay off, an efficient BM design may facilitate the market exploitation of a novel design. Originality/value This study responds to a precise call for additional quantitative empirical studies on the relationship between BM and performance. The study also contributes to an emerging stream of research focused on BM ambidexterity.
  • References (68)
  • Citations (3)
📖 Papers frequently viewed together
10 Citations
47 Citations
2014IEEM: Industrial Engineering and Engineering Management
1 Author (Guo Jing-jin)
78% of Scinapse members use related papers. After signing in, all features are FREE.
References68
Newest
10 CitationsSource
#1Marcel Bogers (UCPH: University of Copenhagen)H-Index: 21
#2Ann-Kristin Zobel (EPFL: École Polytechnique Fédérale de Lausanne)H-Index: 6
Last. Anne L. J. Ter Wal (Imperial College London)H-Index: 15
view all 23 authors...
This paper provides an overview of the main perspectives and themes emerging in research on open innovation (OI). The paper is the result of a collaborative process among several OI scholars – having a common basis in the recurrent Professional Development Workshop on ‘Researching Open Innovation’ at the Annual Meeting of the Academy of Management. In this paper, we present opportunities for future research on OI, organised at different levels of analysis. We discuss some of the contingencies at...
146 CitationsSource
#1Lorenzo Massa (WU: Vienna University of Economics and Business)H-Index: 67
#2Christopher L. Tucci (EPFL: École Polytechnique Fédérale de Lausanne)H-Index: 21
Last. Allan Afuah (UM: University of Michigan)H-Index: 20
view all 3 authors...
Ever since the Internet boom of the mid-1990s, firms have been experimenting with new ways of doing business and achieving their goals, which has led to a branching of the scholarly literature on business models. Three interpretations of the meaning and function of “business models” have emerged from the management literature: (1) business models as attributes of real firms, (2) business models as cognitive/linguistic schemas, and (3) business models as formal conceptual representations of how a...
153 CitationsSource
#1Nicolai Juul Foss (Bocconi University)H-Index: 73
#2Tina Saebi (NHH: Norwegian School of Economics)H-Index: 7
Over the last 15 years, business model innovation (BMI) has gained an increasing amount of attention in management research and among practitioners. The emerging BMI literature addresses an important phenomenon but lacks theoretical underpinning, and empirical inquiry is not cumulative. Thus, a concerted research effort seems warranted. Accordingly, we take stock of the extant literature on BMI. We identify and analyze 150 peer-reviewed scholarly articles on BMI published between 2000 and 2015. ...
204 CitationsSource
#1Stephan Winterhalter (University of Navarra)H-Index: 6
#2Marco Zeschky (HSG: University of St. Gallen)H-Index: 10
Last. Oliver Gassmann (HSG: University of St. Gallen)H-Index: 46
view all 3 authors...
Research on dual business models has highlighted the challenge for firms when they compete with different business models in a market. Drawing from ambidexterity literature, we investigate the question of how firms integrate or separate business models at the level of value chain activities, which constitute the core operational activities within each business model. We employ a qualitative research approach based on 11 case studies of Western firms that implemented a low‐cost business model in ...
22 CitationsSource
#1Baoliang Hu (Hangzhou Dianzi University)H-Index: 1
#2Wenqing Chen (ZJU: Zhejiang University)H-Index: 1
ABSTRACTBy applying an ambidexterity perspective to the business model context, this study examines the effects of efficiency and novelty – two conflicting business model design themes – on technological innovation performance and the relationship between these themes as it relates to enhancing technological innovation performance. From an analysis of data on 173 Chinese manufacturing firms, it is found that both efficiency and novelty themes are positively related to technological innovation pe...
7 CitationsSource
#1Christopher KulinsH-Index: 1
#2Hannes LeonardyH-Index: 1
Last. Christiana WeberH-Index: 10
view all 3 authors...
Although business models are an important source for competitive advantage, little research exists on the relationship between business model design and financial performance. Whereas existing studies focus on the isolated analysis of singular design themes, this work introduces a set-theoretic approach, investigating interdependencies of complementarity, efficiency, novelty, and lock-in-based business models. Thereby, this study applies a qualitative comparative analysis to a unique data set of...
24 CitationsSource
#1Bernd W. WirtzH-Index: 21
#2Adriano PistoiaH-Index: 4
Last. Vincent GöttelH-Index: 6
view all 4 authors...
The concept of business models has reached global impact, both for company's competitive success and in management science. Its application by authors from diverse areas has led to a previously very heterogeneous comprehension of the concept. Yet, by means of investigating its origin and theoretical development, we state a recently converging business model view. Further, based on analyzing business model definitions, perspectives and components in the literature, we newly define the concept and...
263 CitationsSource
#2Thomas BartmanH-Index: 1
Last. Derek van BeverH-Index: 6
view all 3 authors...
The landscape of failed attempts at business model innovation is crowded and becoming more so as management teams at established companies mount both offensive and defensive initiatives involving new business models. This article assembles knowledge that the primary author has developed over the course of two decades studying what causes good businesses to fail, complemented by a two-year intensive research project to uncover where current managers and leadership teams stumble in executing busin...
40 Citations
This paper reviews the status of low-cost innovation in emerging markets like India. Innovation in India has recently achieved worldwide attention, as its low-cost products made a worldwide success. This global recognition drives us to investigate the nature of low-cost innovation in India. We describe four types of low-cost innovation in emerging markets: namely Jugaad, frugal, value, and reverse innovation. We further explain their characteristics, similarities and differences. Lastly, we disc...
32 CitationsSource
Cited By3
Newest
Source
#1Krithika Randhawa (UTS: University of Technology, Sydney)H-Index: 7
#2Ralf Wilden (Macquarie University)H-Index: 10
Last. Siegfried P. Gudergan (University of Waikato)H-Index: 23
view all 3 authors...
Abstract Designing a business model is not a one-off process; adjustments are often required. To create such adjustments and realize business model innovation, firms require the deployment of dynamic capabilities. Yet, we know little about the role of dynamic capabilities in fostering business model innovation, particularly in SMEs. This research, designed as an in-depth longitudinal case study, investigates how an SME’s market orientation and its deployment of dynamic capabilities are related t...
Source
#1Dikky Indrawan (IPB: Bogor Agricultural University)
#1Dikky Indrawan (IPB: Bogor Agricultural University)
Last. H. Hogeveen (UU: Utrecht University)H-Index: 7
view all 4 authors...
Abstract Biosecurity is important to prevent introduction and spread of infectious diseases, including Highly Pathogenic Avian Influenza (HPAI). HPAI is currently endemic in Indonesia and it has triggered the adoption of a biosecurity policy. Although there is anecdotal evidence about the level of biosecurity on Indonesian broiler farms, formal evidence is lacking, as well as knowledge about determinants of low biosecurity levels. This paper has two main objectives: 1) to assess the levels of bi...
Source
#1E. Capawa FotsohH-Index: 1
#2N. MebarkiH-Index: 1
Last. P. Berruet (Sewanee: The University of the South)H-Index: 1
view all 4 authors...
Flexibility is a complex concept, difficult to define. Most of the definitions of flexibility refer to the adaptation of the system in a changing context, which is quite general. We propose to see flexibility as a black box, without trying to define how the system works internally. This external point of view allows most of the parameters, which influence flexibility to be identified. Our definition of flexibility highlights customer satisfaction, changes in demand and in the environment in orde...
1 CitationsSource
This study aims to explore the effect of crises on multinational companies’ (MNC) subsidiaries’ performance. It is hypothesized that crisis-led business underperformance will lead subsidiaries to choose market oriented or entrepreneurial oriented strategies (or both, “ambiorientation”). Finally, this study explores the idea that subsidiaries address market orientation (MO)-based strategies will address both exploration and exploitation outcomes, whereas those that choose entrepreneurial orientat...
Source
#1Bernardo Balboni (University of Modena and Reggio Emilia)H-Index: 7
#2Guido Bortoluzzi (UniTS: University of Trieste)H-Index: 8
Last. Andrea Tracogna (UniTS: University of Trieste)H-Index: 5
view all 4 authors...
Abstract Focusing on the role of efficiency and novelty design themes, this paper examines how (a) the initial business model of a start-up, (b) the subsequent changes in the design themes and (c) the combinative effect of efficiency and novelty (contextual ambidexterity) impact a start-up's growth performance. The study is based on a survey involving 267 new ventures from high-tech industries. The results highlight the importance of pursuing higher efficiency over the life cycle of a start-up, ...
1 CitationsSource
#1Muhammad Anwar (IIUI: International Islamic University, Islamabad)H-Index: 7
In the era of globalisation and dynamic market, firms look for competitive advantage and survival using different sources and resources. Prior studies have indicated that Business Model Innovation (BMI) is a core driver for firm’s survival and superior performance especially in growing industries. However, the role of BMI has been discussed theoretically and exploratory while empirical studies are still lacking. Hence, this study examines the importance of BMI in SME performance and the mediatin...
23 CitationsSource