Legitimacy in Business Model Adaptation: An Investigation of Academic Ebook Platforms in China

Abstract

The purpose of this research is to investigate the importance and influences in seeking legitimacy from the value network on adaptive business model innovation under the context of emerging market. Drawing on the institutional theory, legitimacy is believed to mitigate the uncertainty and risks in environment, and help firms to survive. However, little is known about how legitimacy generated from and lead to business model innovation from the value network approach. This paper employs the concept of legitimacy from the institutional theory as well as the value network approach to examine the adaptive business model innovation in response to exogenous threat in the context of emerging market. Based on comparative case studies on foreign firms in Chinese academic ebooks market, we find that firms required legitimacy from different players in the local value network, including regulatory authorizes, partners, customers and in some cases their parent company. The legitimacy geared adaptations are conductive to adaptive business model innovation towards defending the survive and grow in emerging market.