The role of business models in firm internationalization: An exploration of European electricity firms in the context of the energy transition

René Bohnsack,Francesca Ciulli,Ans Kolk

doi:10.1057/s41267-020-00364-4

Abstract

This article ties in directly with recently intensified interest in business models in international business (IB), using the energy transition as empirical context to explore their relevance in firm internationalization. The global energy transition presents a challenge for almost all industries, but some face specific difficulties particularly important from an IB perspective. We study a set of European firms that used to operate in a highly regulated context with (partial) state ownership, until government-directed market liberalization started to allow further competition and internationalization. Existing firms were prompted to adapt their business models to these changes, with new ventures entering the market to reap opportunities with novel energy-related technologies and business models. Linking insights from strategic management to the IB literature, we conceptualize business model-related specific advantages (BMSAs), and explore the role of BMSAs in the internationalization of the firms in our sample. We also uncover barriers to BMSA recombination in (potential) host countries, consider BMSA location-boundedness, and discuss implications for firms’ international expansion by presenting a new framework. Consequences for the energy transition and the actors already involved and (in)directly confronted with it are explicated, while outlining promising areas for further research, building on the insights and limitations of our study.

Highlights

The global energy transition presents a challenge for almost all industries, but some face specific difficulties
Using the energy transition as empirical context, this study has explored the role of business model-related specific advantages (BMSAs) in the internationalization of firms
While some international business (IB) studies have referred to the business model as a type of firm-specific advantages (FSAs), we argue that its full potential for capturing the complex and interrelated sources of a firm’s competitive advantage has not been realized to date, as the literature has merely concentrated on analyzing FSAs as single resources or capabilities owned by a firm

Summary

Introduction

The global energy transition presents a challenge for almost all industries, but some face specific difficulties. Electricity firms have dealt with novel technologies that rely on renewable energy sources, energy efficiency, and the more active involvement of a range of actors, including customers, which require novel business models (Hancher & Winters, 2017). In this vein, the 2018 World Energy Outlook of the International Energy Agency focused on electricity, noted to be ‘‘at the forefront of the clean-energy transitions’’, with the sector being described by its Executive Director as ‘‘witnessing its most dramatic transformation since its birth more than a century ago’’ (IEA, 2018). Seen from an IB perspective, the current stage of the energy transition is characterized by an uneven degree of internationalization among electricity firms, with ‘traditional’ business models co-existing with and being challenged by novel ones relying on new technologies, against the background of liberalization policies coupled with persisting national approaches (Geels et al, 2016)

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