Business Model Adaptation of Small and Medium-Sized Information Technology Firms

Yulong Liu,Yang Yu

doi:10.4018/jgim.20211101.oa1

Abstract

Small and medium-sized information technology firms operating in high-velocity business environments have to continuously adapt their business models. Prior research on business model adaptation, however, remains under-developed. In this study, we address the gap by drawing on the dynamic capability perspective. Based on the qualitative data collected from 35 interviews with ten companies in China, we develop a processual model and unveil how these companies employ dynamic capabilities (i.e. sensing, seizing and transforming), complemented by ordinary capabilities, to enact, manage and implement business model adaptation. This study provides novel insights into a theoretical issue of business model adaptation for information technology firms and managerial implications while using an adaptive business model innovation strategy.

Highlights

A business model articulates the logic, the data and other evidence that support a value proposition for the customer, and a viable structure of revenues and costs for the enterprise delivering that value (Teece, 2010, p. 179)
The researchers present the findings on the identified conceptual framework, consider the key elements in the process and follow these with the findings on dynamic capabilities and ordinary capabilities, which, when combined, facilitate business model adaptation (BMA)
Established firms have extra resources with which to fund and staff the new activities, which shows that unabsorbed slack could be a reason for them to select the use of the incubator model for business model innovation, which is in line with a previous study

Summary

Introduction

A business model articulates the logic, the data and other evidence that support a value proposition for the customer, and a viable structure of revenues and costs for the enterprise delivering that value (Teece, 2010, p. 179). The authors address the knowledge gap by focusing on small and medium-sized information technology (IT) firms in high-velocity business environments. The rapid evolution of information, computer and telecommunication technologies often challenges the existing business models and forces firms to adapt (Loon & Chik, 2019; To et al, 2019). High-velocity business environments are characterised as markets with blurred boundaries, unclear business models, and ambiguous and shifting market players i.e. buyers, suppliers, competitors, complementors (Wirtz, Mathieu, & Schilke, 2007). In a high-velocity business environment whereby competition, technologies, government policies, and consumers’ attitudes are highly uncertain, few competitive advantages can last (Liu, Ndubisi, Liu, & Barrane, 2020; Wirtz et al, 2007), which intensifies the need and difficulty for firms to adapt their business models

Methods

Results

Conclusion