The most cited articles published since 2009, extracted from Scopus
Volume 43, Issues 2-3, April 2010, Pages 172-194
David J. Teece
Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management's hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. © 2009.
Volume 43, Issues 2-3, April 2010, Pages 354-363
Henry W. Chesbrough
Companies commercialize new ideas and technologies through their business models. While companies may have extensive investments and processes for exploring new ideas and technologies, they often have little if any ability to innovate the business models through which these inputs will pass. This matters - the same idea or technology taken to market through two different business models will yield two different economic outcomes. So it makes good business sense for companies to develop the capability to innovate their business models. This paper explores the barriers to business model innovation, which previous academic research has identified as including conflicts with existing assets and business models, as well as cognition in understanding these barriers. Processes of experimentation and effectuation, and the successful leadership of organizational change must be brought to bear in order to overcome these barriers. Some examples of business model innovation are provided to underline its importance, in hopes of inspiring managers and academics to take these challenges on. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 216-226
Christoph Zott | Raphael K. Amit
Building on existing literature, we conceptualize a firm's business model as a system of interdependent activities that transcends the focal firm and spans its boundaries. The activity system enables the firm, in concert with its partners, to create value and also to appropriate a share of that value. Anchored on theoretical and empirical research, we suggest two sets of parameters that activity systems designers need to consider: design elements - content, structure and governance - that describe the architecture of an activity system; and design themes - novelty, lock-in, complementarities and efficiency - that describe the sources of the activity system's value creation. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 195-215
Ramon Casadesus-Masanell | Joan Enric Ricart
Strategy scholars have used the notion of the Business Model to refer to the 'logic of the firm' - how it operates and creates value for its stakeholders. On the surface, this notion appears to be similar to that of strategy. We present a conceptual framework to separate and relate the concepts of strategy and business model: a business model, we argue, is a reflection of the firm's realized strategy. We find that in simple competitive situations there is a one-to-one mapping between strategy and business model, which makes it difficult to separate the two notions. We show that the concepts of strategy and business model differ when there are important contingencies on which a well-designed strategy must be based. Our framework also delivers a clear distinction between strategy and tactics, made possible because strategy and business model are different constructs. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 227-246
Benoît Demil | Xavier Lecocq
The business model concept generally refers to the articulation between different areas of a firm's activity designed to produce a proposition of value to customers. Two different uses of the term can be noted. The first is the static approach - as a blueprint for the coherence between core business model components. The second refers to a more transformational approach, using the concept as a tool to address change and innovation in the organization, or in the model itself. We build on the RCOV framework - itself inspired by a Penrosian view of the firm - to try to reconcile these two approaches to consider business model evolution, looking particularly at the dynamic created by interactions between its business model's components. We illustrate our framework with the case of the English football club Arsenal FC over the last decade. We view business model evolution as a fine tuning process involving voluntary and emergent changes in and between permanently linked core components, and find that firm sustainability depends on anticipating and reacting to sequences of voluntary and emerging change, giving the label 'dynamic consistency' to this firm capability to build and sustain its performance while changing its business model. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 156-171
Charles Baden-Fuller | Mary S. Morgan
Drawing on research undertaken in the history and philosophy of science, with particular reference to the extensive literature which discusses the use of models in biology and economics, we explore the question 'Are Business Models useful?' We point out that they act as various forms of model: to provide means to describe and classify businesses; to operate as sites for scientific investigation; and to act as recipes for creative managers. We argue that studying business models as models is rewarding in that it enables us to see how they embody multiple and mediating roles. We illustrate our ideas with reference to practices in the real world and to academic analyses, especially in this Long Range Planning Special Issue on Business Models. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 247-261
Rita Gunther McGrath
The business model concept offers strategists a fresh way to consider their options in uncertain, fast-moving and unpredictable environments. In contrast to conventional assumptions, recognizing that more new business models are both feasible and actionable than ever before is creating unprecedented opportunities for today's organizations. However, unlike conventional strategies that emphasize analysis, strategies that aim to discover and exploit new models must engage in significant experimentation and learning - a 'discovery driven,' rather than analytical approach. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 308-325
Muhd Noor Muhd Yunus | Bertrand Moingeon | Laurence Lehmann-Ortega
Grameen bank, founded in 1976, has both pioneered the development of micro-finance, and created nearly 30 businesses designed to alleviate poverty. The article traces the gradual development of Grameen's expertise in formulating social business models, which require new value propositions, value constellations and profit equations, and as such, resembles business model innovation. The article presents five lessons learned from this experience: three are similar to those of conventional business model innovation - challenging conventional thinking, finding complementary partners and undertaking continuous experimentation; two are specific to social business models: recruiting social-profit-oriented shareholders, and specifying social profit objectives clearly and early. We suggest these new business models - where stakeholders replace shareholders as the focus of value maximization - could empower capitalism to address overwhelming global concerns. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 272-290
Bernd W. Wirtz | Oliver S. Schilke | Sebastian Ullrich
There is virtually a consensus that, to remain competitive, firms must continuously develop and adapt their business models. However, relatively little is known about how managers can go about achieving this transformation, and how, and to what extent, different types of business models should be adapted. To illustrate the differential effect of environmental changes on different business model types, this article draws from the '4C' Internet business model typology to elaborate on how a recent wave of changes on the Internet - the emergent Web 2.0 phenomenon - is affecting each of its four business model types. We argue that Web 2.0 trends and characteristics are changing the rules of the 'create and capture value' game, and thus significantly disrupt the effectiveness of established Internet business models. Since systematic empirical knowledge about Web 2.0 factors is very limited, a comprehensive Web 2.0 framework is developed, which is illustrated with two cases and verified through in-depth interviews with Internet business managers. Strategic recommendations on how to what extent different Web 2.0 aspects affect each business model type are developed. Executives can use the ideas and frameworks presented in the article to benchmark their firm's efforts towards embracing the changes associated with the Web 2.0 into their business model. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 370-382
Yves L. Doz | Mikko Kosonen
Strategic discontinuities and disruptions usually call for changes in business models. But, over time, efficient firms naturally evolve business models of increasing stability - and therefore rigidity. Resolving this contradiction can be made easier by developing three core meta-capabilities to make an organization more agile: strategic sensitivity, leadership unity and resource fluidity. This article reviews the underlying determinants of these capabilities, based on detailed research undertaken in a dozen companies who were re-conceiving their business models - among others, Nokia, easyGroup, HP, SAP and Kone are used as examples. We propose a repertoire of concrete leadership actions enabling the meta-capabilities needed to accelerate the renewal and transformation of business models. To organize our argument we borrow the three main dimensions of the strategic agility framework presented in our earlier work, and develop corresponding vectors of leadership actions, each of which can enhance a firm's ability to renew its business models. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 383-407
Marc Sosna | Rosa Nelly Trevinyo-Rodríguez | S. Ramakrishna Velamuri
How does an established organization innovate its business model, which is still contributing revenues and profits, but whose future effectiveness is likely to be undermined by changes in its external environment? We study the antecedents and drivers of business model innovation in a Spanish dietary products business threatened by economic recession and heightened competition resulting from liberalization. We document the evolution of the firm's new retail-market business model in two distinct phases: 1) a five-year phase of experiment and exploration followed by 2) a high-growth exploitation phase when the firm outperformed its competitors by a wide margin and internationalized successfully, in spite of its products and final end customers remaining basically unchanged. The study, which takes a dynamic perspective, is situated in the organizational learning literature, and emphasizes the importance of trial-and-error learning for business model innovation. We also highlight the impact of the different types of learning that take place in these two phases, as well as the knowledge-transfer mechanisms from individuals to the organization and vice-versa. © 2010 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 262-271
Alfonso Gambardella | Anita M. McGahan
This article describes a business model that is growing in prevalence and that carries novel implications: the development of general-purpose technologies for licensing to downstream specialists. In their archetypical format, these general-purpose technologies are constructed in ways that can be employed by different potential downstream licensees, and can accommodate their different strategies. This strengthens the hand of innovative firms in the rising markets for knowledge-based assets, and can be expected to improve their ability to capture a greater share of the value their technology creates. The innovation of business model designed for licensing such technologies will have unpredictable, but inevitable, consequences for industry structure and organizational capabilities, as well as for the content and context for the upstream science. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 326-342
Nicolas M. Dahan | Jonathan Doh | Jennifer M. Oetzel | Michael Yaziji
Multinational enterprises (MNEs) face a range of challenges when entering developing countries, including the need to adapt their business models to local markets' cultural, economic, institutional and geographic features. Where they lack the tangible resources or intangible knowledge needed to address these challenges, MNEs may consider collaborating with non-profit nongovernmental organizations (NGOs) to help facilitate new modes of value creation. In such cross-sector partnerships, parties contribute complementary capabilities along each stage of the value chain to develop products or services that neither could produce alone, creating and delivering value in novel ways while minimizing costs and risks. Our conceptualization broadens the business model concept to incorporate cross-sector collaborations, arguing such partnerships can create and deliver both social and economic value, which can be mutually reinforcing. We highlight, in particular, the competencies and resources NGOs can bring to such partnerships, including market expertise, legitimacy with clients/customers, civil society players and governments, and access to local expertise and sourcing and distribution systems. Beyond contributing to particular value chain activities, NGOs and companies can offer missing capabilities to complete each other's business models, or even co-create new and innovative multi-organizational business models. We stress four strategic imperatives for the success of corporate-NGO developing market partnerships - innovative combinations of firm and NGO resources and skills; the importance of trust-building, and of fit between the two organizations' goals; and supporting and understanding the local business infrastructure and environment. © 2009 Elsevier Ltd.
Volume 43, Issues 2-3, April 2010, Pages 448-461
Wendy K. Smith | Andy Binns | Michael L. Tushman
As our world becomes more global, fast paced and hypercompetitive, competitive advantage may increasingly depend on success in managing paradoxical strategies - strategies associated with contradictory, yet integrated tensions. We identify several types of complex business models organizations will need to adopt if they are to host such paradoxical strategies. Managing complex business models effectively depends on leadership that can make dynamic decisions, build commitment to both overarching visions and agenda specific goals, learn actively at multiple levels, and engage conflict. Leaders can engage these functions through team-centric or leader-centric structures. © 2010 Elsevier Ltd.
Volume 42, Issue 1, February 2009, Pages 42-74
Martin J. Eppler | Ken W. Platts
This article shows how visualization can be used in the strategic-planning process, by examining the use of real-time, interactive visual representations in the business strategy process. Starting with a concise review of literature, we postulate that visualization can improve the quality of the strategic planning process by addressing many of its cognitive, social, and emotional challenges. We develop a conceptual framework for strategy visualization, and use this structure to group and position interactive visual representations of information along the strategic-planning process. We highlight the benefits of visual methods for strategizing, and illustrate them with five case studies covering the entire strategizing process from analysis to implementation. The cases also highlight the use of visualization at different organizational levels, and we consider some of the challenges involved in employing graphic means in strategy work, and how to address them. We highlight resulting risks and practices for visual strategizing and articulate a research agenda for this emergent domain. The key lesson for executives is that visualization should not just be seen as an attractive way to communicate strategic planning process outcomes and monitor its progress, but as a powerful process enabler that can enable strategizing as a joint managerial practice - if facilitated properly. Visualization is, however, a double edged sword and we present several caveats that need to be considered in its application in the strategy context. © 2008 Elsevier Ltd. All rights reserved.
Volume 42, Issue 3, June 2009, Pages 277-297
Gerard Hodgkinson | Eugene Sadler-Smith | Lisa A. Burke | Guy Claxton | Paul R. Sparrow
Recent advances in social cognitive neuroscience and related fields have rejuvenated scholarly research into intuition. This article considers the implications of these developments for understanding managerial and organizational decision making. Over the past two decades, researchers have made considerable progress in distinguishing intuition from closely-related constructs such as instinct and insight and the interplay between these non-conscious forms of cognition and explicit reasoning processes is now better understood. In the wake of significant theoretical and methodological convergence centred on dual-process theories of reasoning, judgment and social cognition, supported by functional magnetic resonance imaging (fMRI) studies, several of the foundational assumptions underpinning classic theories and frameworks in strategic management and entrepreneurship research are being called into question. Old models based on a simplistic left brain/right brain dichotomy are giving way to more sophisticated conceptions, in which intuitive and analytical approaches to decision making are underpinned by complex neuropsychological systems. In the light of these advances, the authors offer their reflections on what this all means for the assessment, development and management of intuition in the workplace. © 2009 Elsevier Ltd. All rights reserved.
Volume 45, Issues 5-6, October 2012, Pages 320-340
Joseph Franklin Hair | Marko Sarstedt | Torsten M. Pieper | Christian M. Ringle
Every discipline needs to frequently review the use of multivariate analysis methods to ensure rigorous research and publications. Even though partial least squares structural equation modeling (PLS-SEM) is frequently used for studies in strategic management, this kind of assessment has only been conducted by Hulland (1999) for four studies and a limited number of criteria. This article analyzes the use of PLS-SEM in thirty-seven studies that have been published in eight leading management journals for dozens of relevant criteria, including reasons for using PLS-SEM, data characteristics, model characteristics, model evaluation and reporting. Our results reveal several problematic aspects of PLS-SEM use in strategic management research, but also substantiate some improvement over time. We find that researchers still often do not fully make use of the method's capabilities, sometimes even misapplying it. Our review of PLS-SEM applications and recommendations on how to improve the use of the method are important to disseminate rigorous research and publication practices in the strategic management discipline. © 2012 Elsevier Ltd.
Volume 42, Issue 2, April 2009, Pages 234-263
Stephen Cummings | Urs S. Daellenbach
At forty years old, Long Range Planning is the world's longest running academic journal devoted to strategic management. It is also unique among strategy journals in its editorial policy of spanning practical and academic concerns. As such, its archive provides an excellent guide to the consistent themes, fads and trends in the field's development. This article utilizes a number of methods, including the text data-mining tool Leximancer, to examine the themes and concerns of all 2366 LRP articles published by the end of 2006. Based on this survey, we outline strategic management's fundamental themes, identify those that may once have been regarded as fundamental but are no longer, and point to the issues that have emerged to become imperatives in strategy over the past decade, to question the conventional view about the 'decline' of planning. Based on our analysis of the changing focus of authors' concerns over time, we identify five emerging themes that we suggest may shape strategy over the next ten years. © 2009 Elsevier Ltd. All rights reserved.
Volume 42, Issue 2, April 2009, Pages 164-193
Stevan R. Holmberg | Jeffrey L. Cummings
Successful business alliances are a critical strategic component in many industries, but too many strategic alliances fail to meet their partners' objectives. While the reasons behind alliance failures are complex, and vary according to type of alliance and industry, many failures result from ill-conceived overall alliance strategies, narrowly focused industry and firm partner selection analytical thinking and models, and poor alliance management, execution and implementation. In particular, the well-informed and strategically driven selection of alliance partners is a core element in building successful alliances. To that end, this article provides alliance managers and researchers with (1) a strategic management-based industry and partner selection process, (2) a new dynamic partner selection tool for evaluating target industries and specific firms, which is applicable to multiple alliance and industry contexts, and (3) an alliance-rich global travel industry application that illustrates the robustness of our partner selection process and analytical tool. The article fills a gap in the literature with respect to service-business alliances, which have traditionally been understudied. Lastly, perspectives are offered for future managerial and research actions. © 2009 Elsevier Ltd. All rights reserved.
Volume 43, Issues 2-3, April 2010, Pages 431-447
Valérie Sabatier | Vincent Mangematin | Tristan Rousselle
This article builds on the analogy between the business model concept and a recipe to discuss the concept of a business model portfolio (which we analogise as a dinner). In this context, we view analogies as concise, shorthand ways to describe important concepts and propose principles to organise new ways to make money in existing activities. Considering the different business models of four European biotechnology companies, we explore the their business model portfolios, defined as the range of different ways they deliver value to their customers to ensure both their medium term viability and future development. A firm's portfolio can help balance the levels of promise and interdependency with other firms of its different business models, and help it articulate and finance its activities in the medium run to ensure idiosyncrasy to protect its future health. © 2010 Elsevier Ltd.
Volume 42, Issue 1, February 2009, Pages 75-95
Ard Pieter De Man | Nadine Roijakkers
When designing an alliance governance structure, managers have to choose between approaches based on control or on trust. This article proposes a framework to help managers decide which of the two is appropriate in a particular situation. The debate in the literature on control and trust centres on two issues: first, on the question of whether control and trust are substitutes or complements, and second on the links between control, trust and risk. This article connects these two debates. Our framework proposes that whether control and trust are substitutes or complements depends on the level and type of risk an alliance faces. We argue that in high risk situations companies use complex combinations of control and trust in a complementary way, rather than loose relationships as suggested by current thinking. In low risk situations we expect control and trust to be substitutes. In line with current contributions, we find that intermediate levels of risk require alliance governance to be based either exclusively on trust or exclusively on control, depending on the type of risk the alliance faces. These principles are illustrated by a detailed analysis of the governance structure of alliances in the financial, consumer goods, retail, construction and agriculture sectors. © 2008 Elsevier Ltd. All rights reserved.
Volume 44, Issues 5-6, October 2011, Pages 297-316
Stefan Haefliger | Eric Monteiro | Dominique Foray | Georg Von Krogh
Social software challenges strategic thinking in important ways: empowering creative, independent individuals implies indeterminate and uncertain reactions and creations in support of, or in opposition to, management's original thinking. We build a framework that organizes research on social software, taking perspectives from both inside and outside companies. We use this framework to introduce the contributions to this special issue in terms of strategy, technology, and community and to ask a series of questions for strategy research that pays particular attention to value creation and appropriation, the role of technology both as tool and mediator between managers and users, and the role that management can play in communities, both as leaders and in shaping boundaries. © 2011 Elsevier Ltd.
Volume 43, Issue 4, August 2010, Pages 477-497
Xavier Gimbert | Josep Bisbe | Xavier Mendoza
Since most studies have focused on the role of strategic performance measurement systems (SPMSs) in communicating the firm's strategy and facilitating its execution and control, little is known about the role they might potentially play in shaping strategy (re)formulation processes. In this paper, we examine whether organisations that use SPMSs engage in strategy formulation processes differently from those that use performance measurement systems (PMSs) which do not qualify as SPMSs, or those which do not use any type of PMS. In particular, we hypothesise that the use of SPMSs will relate to 1) a greater frequency of strategy (re)formulations, and 2) a more comprehensive strategic agenda, reflected through a greater number and a wider variety of strategic decisions in each strategy (re)formulation. Empirical data gathered from surveys completed by 349 CEOs of medium and large Spanish companies provide support for a positive association between the use of SPMSs and both the number and variety of strategic decisions taken in each strategic review. Our findings suggest that the use of SPMSs (as opposed to other forms of PMS) by an organisation's top management team translates into a more comprehensive strategic agenda. Prior studies have shown that strategic agendas shape the extent and direction of corporate strategic change. © 2010 Elsevier Ltd.
Volume 42, Issue 2, April 2009, Pages 216-233
Bruno Cassiman | Maria Chiara Di Guardo | Giovanni Valentini
Increasingly, technological innovation results from the joint creation effort of different players in the value chain, such as suppliers, customers, research centres and universities. Balancing co-operative and competitive forces in the innovation process to co-create value and to capture part of this value has become crucial to profit from innovation. In this article, we show that this tension between value creation and value capture is present in each R&D project. Drawing on the case of STMicroelectronics, we show that the balance of co-operative and competitive forces in R&D projects is made through the careful alignment of three variables: project knowledge attributes, project governance structure (internal development, co-operation or contracting), and project partner selection (firm or university). The capability to match these three elements explains the success of the innovation process of STMicroelectronics. Building on the experience of this firm, we provide some practical guidance on how managers should trade off these co-operative and competitive forces in organising their R&D projects. © 2009 Elsevier Ltd. All rights reserved.
Volume 45, Issues 5-6, October 2012, Pages 359-394
Jan Michael Becker | Kristina Klein | Martin G M Wetzels
Partial least squares structural equation modeling (PLS-SEM), or partial least squares path modeling (PLS) has enjoyed increasing popularity in recent years. In this context, the use of hierarchical latent variable models has allowed researchers to extend the application of PLS-SEM to more advanced and complex models. However, the attention has been mainly focused on hierarchical latent variable models with reflective relationships. In this manuscript, we focus on second-order hierarchical latent variable models that include formative relationships. First, we discuss a typology of (second-order) hierarchical latent variable models. Subsequently, we provide an overview of different approaches that can be used to estimate the parameters in these models: (1) the repeated indicator approach, (2) the two-stage approach, and (3) the hybrid approach. Next, we compare the approaches using a simulation study and an empirical application in a strategic human resource management context. The findings from the simulation and the empirical application serve as a basis for recommendations and guidelines regarding the use and estimation of reflective-formative type hierarchical latent variable models in PLS-SEM. © 2012 Elsevier Ltd.