Competing with the Use of Business Model Innovation -- An Exploratory Case Study of the Journey of Born Global Firms

Abstract

This is the published version of a paper published in Journal of Business Models. Citation for the original published paper (version of record):Johansson, M., Abrahamsson, J. (2014) Competing with the use of business model innovation: an exploratory case study of the journey of born global firms. Journal of Business AbstractPurpose: The purpose of this article is to investigate how business models are used by born global firms to act upon new business opportunities and how they manage business model innovation over time to prosper and grow. Design/Methodology:The study is based on three exploratory case studies of born global firms in mobile communication, financial services and digital music distribution. Findings:Three interrelated capabilities to manage business model innovation are articulated in the context of born global firms; sensing capabilities, entrepreneurial capabilities and relational capabilities and four propositions are formulated. We find that business model innovations are used as a tool by maturing born global firms to navigate the value chains and achieve international growth. We further propose that born global need the capabilities to balance different business model designs simultaneously and to manage its business model innovation in a timely manner.Originality: This article contributes to both the business model literature and research of international entrepreneurship. By putting business model research into the dynamic context of rapidly internationalizing born global firms, we contribute to the field of business model research with findings of how business models are used in the internationalization processes. Certain capabilities are needed to manage business model innovation for born global firms to dynamically use business models as a tool in the international growth overtime.

Driving internationalization through business model innovation

“…Furthermore, the need of internationalizing may arguably represent what is "sensed" in the dynamic capability framework provided by Teece (2018) which then leads to design and refine the BMI. More importantly, consistently with Foss and Saebi (2017), our study provides detailed empirical evidences over the mutual connection and complementarities among value mechanisms of BM, confirming once again an architectural view of firms' BM (Teece, 2007(Teece, , 2010(Teece, , 2018, as complex and dynamic system (Massa and Tucci, 2013). Complexity, mutual connection and complementarities can be extended to the relationship between BMI and Internationalization process.…”

“…Qualitative approaches facilitate the understanding of complex phenomena (Yin, 2009), such as business model innovation (Massa and Tucci, 2013) and internationalization (Hennart, 2014). Furthermore, given the early stage of development of research linking BMI and Internationalization, such an approach was felt to be necessary (Gartner and Birley, 2002;Miles et al, 2013).…”

“…Thus, borrowing from Foss and Saebi (2017, p.201), we will refer to BMI as "designed, novel, non-trivial changes to the key elements" of a firm's business model and/or the architecture linking these elements". The Business Model Innovation process is first of all a "change phenomenon" which, if characterized by some degrees of novelty or uniqueness comparing to already existing solution in the market, can lead to a business innovation process (Massa and Tucci, 2013). Thus, each occasion of change represented a suitable and academic relevant research context to explore.…”

“…Casadesus-Masanell and Ricart (2010) argue that firms may adapt rather than replicate their business model while entering in new markets. Johansson and Abrahamsson (2014) analyze how continuous business model innovation can be used for international growth over time.…”

“…To date, research failed to fully exploit the relationship between BMI and internationalization, due to the relatively young and emerging nature of business model stream, which has hindered this relevant research direction. For years, indeed, the business model construct has been characterized by fuzziness and unclarity in terms of its definition and components (Massa et al, 2017), and similarly this fragmentation applies to the BMI stream (Massa and Tucci, 2013). Moreover, limited research exists with reference to how change and innovation of BMs can be performed.…”