Business Model Portfolio Research Articles

Pivoting to Manage the Integration of Two Initially Separate Business Models: The Case of the Digital Transformation of Established Retailers

Due to increasing digitalization, most companies have added online retail as a new business model (BM) separate from their initial physical BM, requiring them to manage a portfolio of BMs. The literature points out that companies choose between a separation or integration strategy to manage their multiple BMs. However, business cases show that companies adopting a separation strategy may then plan for a possible integration strategy. Despite the growing knowledge in the BM portfolio literature, scholars and practitioners still lack a comprehensive understanding of the integration process of two BMs that were initially managed separately. This qualitative research draws on a cumulative multiple case study of five retailers to analyze how incumbent firms with different BMs manage their integration. We show that these firms pivoted the management of their BM portfolio. The notion of pivoting has been studied from the perspective of a single BM. In this research, we demonstrate that the process of pivoting also applies to the management of several BMs. Our results provide a generic model of the BM integration process that underlines barriers and enabling pivoting factors. Finally, by considering pivoting at this corporate level, our research adds to the ongoing discussion in strategic management regarding the way companies manage the dynamics of their BM portfolio.

Balancing contradictory demands during the transition to a business model portfolio for sustainability

Balancing contradictory demands during the transition to a business model portfolio for sustainability

Business Model Research: Past, Present, and Future

AbstractBusiness model research has grown into an insightful area of inquiry, and articles in the Journal of Management Studies (JMS) have greatly contributed to this topical area. This introductory article to the thematic collection of business model research offers an overview of the pertinent literature as well as foundational knowledge, so it is suitable for scholars who are familiar with the topic, but it is also helpful for those wishing to join the conversation. Business model research has thrived at the intersection of strategy, innovation management, and entrepreneurship studies. This body of research is characterized by both a bold vision to improve our understanding of the architecture and building blocks of business models as well as conceptual and empirical debates about the way forward in the digital age of continuing disruption, platformization, and ecosystem transformations. We suggest three promising areas for future research: business model portfolios, competitive dynamics between heterogeneous business models, and business model design for more sustainable economy.

Strategically Managing the Business Model Portfolio Trajectory

This article presents a strategic decision-making tool to assist corporate management in analyzing the trajectory of their business model portfolio. The tool provides a robust means of assessing the trajectory of a business model portfolio through the evolution of inter-business model complementarity and intra-business model complexity. The article illustrates the use of the tool through the example of the radical restructuring of Hewlett Packard’s (HP) business model portfolio in 2015, which resulted in two smaller, more adaptive corporate entities with distinct business models that could pursue redefined growth opportunities after the split.

Developing Sustainable Business Models: A Microfoundational Perspective

Sustainable business models (SBMs) integrate economic with social and/or environmental value creation. Many relevant aspects of organizing for sustainable business model innovation (SBMI) have yet to be accounted for to understand how firms can add a new SBM to their already existing portfolio of business models. Specifically, how the development of a new SBM is influenced by managers’ cognitions, capabilities, behaviors, and interactions, and how the SBMI process can be supported by organizational processes and structures is less well understood. Taking a microfoundational approach, we identify the capabilities at the managerial and organizational level that enable established firms to add a new SBM to their business model portfolio. In a longitudinal study, we explore how Telenor, a multinational telecommunications company headquartered in Norway, introduced a new SBM targeted at providing digital health services in Bangladesh. We offer a framework that highlights key microfoundational elements supporting each of the phases in the SBMI process.

Technology Entrepreneurship and the Performance of Enterprises in the Conditions of Covid-19 Pandemic: The Fuzzy Set Analysis of Waste to Energy Enterprises in Poland

This article’s aim is to explain the impact of technology entrepreneurship phenomenon on waste management enterprise performance in the conditions of COVID-19 pandemic. The concept of technology entrepreneurship according to the configuration approach and the category of high-performance organization are the theoretical bases of empirical investigation. For the implementation of empirical research, Fuzzy set Qualitative Comparative Analysis (FsQCA) was adopted. The research sample included a group of producers of Refused Derived Fuel (RDF) as a central part of the waste to energy industry located in Poland. The research results showed that the waste to energy sector is highly immune to pandemic threats. While during COVID-19, the basic economic parameters (i.e., sales, profitability and employment) of the entire industry in Poland clearly decreased, the same parameters in the case of the waste to energy industry remained at the same level. The research results allow the formulation of two high-performance models of technology entrepreneurship in the waste to energy industry under COVID-19 conditions. The first model is based on traditional technologies and hierarchical organizational structures, and the second is using innovative technologies and flexible structures. Both technology entrepreneurship models are determined by their emergence as complementary to implementation strategies and the opportunity-oriented allocation of resources within business model portfolios.

Business Model Portfolio Configurations and Firm Performance

We study the impact on performance when incumbents operate multiple business models in a business model portfolio. Drawing upon data from the global airline industry we conduct QCA analysis and document conflicts as well as complementarities between distinct business models over time. Our results suggest that aligning monetization mechanisms across business models can actually mitigate classic stuck-in-the-middle dilemmas that occur when a firm operates a price leader and differentiated business model at the same time. In contrast to conventional views we also find that sharing resources across a firm’s business models does not unlock synergies per se but may actually lead to negative performance consequences. We match our findings to settings in other industries and discuss theoretical and managerial implications for business model innovation and diversification of business model portfolios

Customer Complementarity in the Digital space: Exploring Amazon's Business Model Diversification

In spite of the striking evidence that many firms run multiple business models, scholars and practitioners still lack a comprehensive understanding about business model portfolio dynamics, particularly when this happens in the digital space. Prior research on business model diversification tends to focus on supply-side complementarities, such as a firm’s synergies among resources and capabilities. Yet, the demand-side with its customer complementarities remains theoretically and empirically unexplored, despite offering interesting opportunities for firms’ competitive advantage. By developing a qualitative, longitudinal (1995 – 2018) analysis of the various business models employed by Amazon.com, we identify and map how customer complementarities—network effects and one-stop shop effects—can support firm growth and competitive advantage, particularly in the digital space. We identify what we term the ‘integrative business model,’ defined as the business model in a portfolio exhibiting the most (and predominantly positive) customer complementarities with other business models. We propose mechanisms for the integrative business model to contribute to sustainable competitive advantage via a causal loop diagram and discuss implications for theory and practice.

The role of costs in business model design for early-stage technology startups

Beginning in their early stages, technology start-ups (TSUs) develop several business models. Costs are often perceived as a constraint to business model innovation. Challenging this assumption, we question the role that costs play in business model design. We analyzed twelve TSU case studies from Switzerland, France, and the USA. The results indicate that TSUs develop three types of business models that are technology-driven, market-driven, and exit-driven. Costs act as enablers, moderators, and mediators. With a portfolio of business models, costs play a mediating role. Finally, the role costs play in the business model design phase changes firm value capture mechanisms, potentially enhancing the firm's value. This research makes the following contributions: (1) Technology-, market-, and exit-driven business model portfolios appear to be heterogeneous among TSUs. (2) Costs play enabler and mediator roles in addition to the traditional moderator role. We add to the literature by focusing on the new economy (rather than Porter's cost leadership strategies) through an optimistic and investment-driven approach.

Customer complementarity in the digital space: Exploring Amazon’s business model diversification

In spite of the striking evidence that many firms run multiple business models, scholars and practitioners still lack a comprehensive understanding about business model portfolio dynamics, particularly when this happens in the digital space. Prior research on business model diversification tends to focus on supply-side complementarities, such as a firm's synergies among resources and capabilities. Yet, the demand-side with its customer complementarities remains theoretically and empirically underexplored, despite offering interesting opportunities for firms' competitive advantage. By developing a qualitative, longitudinal (1995–2018) analysis of the various business models developed by Amazon.com, we identify and map how customer complementarities—network effects and one-stop shop effects—can support firm growth and competitive advantage, particularly in the digital space. We identify what we term the ‘integrative business model,’ defined as the business model in a portfolio exhibiting the most (predominantly positive) customer complementarities with other business models. We propose mechanisms for the integrative business model to contribute to sustainable competitive advantage via a causal loop diagram and discuss implications for theory and practice.

Thriving in the New Normal: The HR Microfoundations of Capabilities for Business Model Innovation. An Integrated Literature Review

AbstractFirms need to respond to the increasing competition and change of the current New Normal environment by being more innovative, and especially in developing new business models. This paper seeks to explore how microfoundations, particularly with respect to human resource management, play a key role in facilitating innovation in business models through the development of key needed capabilities. Four themes are identified with respect to business model innovation (BMI) in the New Normal: BMI as an enabler to create and operate across industries and product‐markets; BMI as a mechanism for firms to better navigate changing institutional landscapes; BMI as giving rise to business model portfolios; and concurrent and cumulative innovations that can lead to BMI. This paper also develops a conceptual framework that presents a synoptic view of the five essential capabilities for BMI, which include analogical reasoning, sensemaking, dynamic capabilities, organisational ambidexterity, and organisational learning. Finally, it is shown how the microfoundations of a bespoke, development‐oriented BMI HR architecture can support the advancement of these capabilities and thus contribute to the strategic HR literature.

Learning Club, Home Court, and Magnetic Field: Facilitating business model portfolio extension with a multi-faceted corporate ecosystem

While scholarly interest in corporate level business model (BM) portfolios is increasing, little is known on the BM portfolio extension process. Positing that a corporate ecosystem can serve as an important context of this process, this paper addresses this gap by analysing an e-commerce giant's BM-launch-events that plot its BM portfolio extension journey. We find that the ecosystem, which comprises actors who hold resources and interact to coevolve, could be leveraged to facilitate a BM launch in manners beyond relying on activity-sharing synergies across BMs. Specifically, three configurations, each of which consists of a BM launch challenge, an ecosystem facet (i.e., Learning Club, Home Court, or Magnetic Field), and a leveraging strategy (i.e., Knowledge Orchestrator, Capability Bundler, or Service Aggregator), are identified to depict the associated process. Our findings offer a dynamic understanding of BM portfolio extension by integrating the actor-orientation of ecosystem and the activity-based view of BM. We also contribute to ecosystem literature by shedding light on a corporate ecosystem, revealing its generative properties, and linking its role to corporate strategy literature.

Bridging strategic planning and business model management – A formal control framework to manage business model portfolios and dynamics

Despite the increasing interest in the intersection between strategic planning and business model management, research and practice struggle to integrate the two activities. By applying a rationalist view and drawing on the formal control theory, we develop an integrated management framework that provides a conceptual model of how to achieve consistency between the relevant goal and the planning levels. Therefore, we decompose the complex organizational activities into the level strategy, business model portfolio, tactics, and operations. For each level, we specify the formal activities and objectives and elaborate how the levels determine each other. Furthermore, we explain how higher and lower level formal control loops ensure alignment and that the appropriate level of the organization responds to changes in the environment. Finally, we discuss how these formal control mechanisms allow for proficient management of the dynamics inherent in strategy and business model management.

Business model diversification in the sharing economy: The case of GoMore

This paper improves our understanding of the rise of the sharing economy by shedding light on the current trend in the mobility sector for new firms to operate different business models simultaneously. A shared mobility platform is used as a case study to examine the underexplored process of diversification into a business model portfolio, and test the theoretical proposition that successful business model configurations maximize the existing resources of a firm to establish hard-to-imitate capabilities and create sustainable competitive advantage.Data collection was conducted through interviews with key informants from the platform management team and a document analysis. The analysis shows the evolution, diversification, and expansion of the sharing economy startup from a non-profit ridesharing website to a for-profit matchmaking platform offering peer-to-peer (P2P) mobility solutions (ridesharing and short-term car rental) alongside business-to-consumer (B2C) access-based services (long-term leasing).The analysis suggests that each new service subsequently offered by the case firm aimed to increase the supply of peer providers in its existing P2P business models. The business model portfolio relies on six key resources (member community, platform technology, user data, customer support, local management teams, and partners) and three key capabilities (leverage of the community’s assets, technological improvement, and user engagement), which are shared and redeployed across business models and geographic locations to improve matchmaking quality, enable growth, and increase profits.

Business Model Portfolio Evolution

Incumbent firms typically operate a portfolio of business models. However, we still know little about how business model portfolios emerge and develop over time. We build on longitudinal data from a multiple-case study to explore how the evolution and dynamics of business model portfolios impact firm growth. Our findings suggest that business model portfolios emerge and develop in three phases: initiation and scale-up, diversification and transformation. A firm’s first viable business model strongly impacts the evolution of its business model portfolio and growth. New business models in the portfolio contribute to firm growth when they are synergistically interrelated with this core business model and specifically generate demand-side synergies. In a transforming portfolio, a new business model replaces the old core business model of a firm.

Performance Implications of Business Model Diversification: The Role of Demand Conditions

Despite the recognition that many firms operate a portfolio of business models, little is known about how business model diversification may be associated with firm performance. In this study, we d...

A Multidimensional Framework for Digital Platform Innovation and Management: From Business to Technological Platforms

The systems that support digital businesses require transformation to maximize the economic value of network connections. It forces a shift to platforms and ecosystems collaborative by nature, by applying business models with multiple actors playing multiple roles. The proposed multidimensional framework involves the use of a multi‐methodology approach that incorporates synergy of business and technological innovations and management. This research concerns a multidimensional approach to digital platform enterprise development that provides support for executives to examine the interrelationships across platform business model portfolio on regular basis. © 2018 John Wiley & Sons, Ltd.

Opportunties and Challenges when Managing Multiple Business Models in One Organization

Many organizations operate multiple business models concurrently. Yet, we know little about the opportunities and challenges when managing a business model portfolio in one organization. In this sy...

Understanding Collaborative Consumption Business Model: Case of Car Sharing Systems

Collaborative consumption models are increasingly prevalent across the world due to their environmental, social and economic benefits. To understand how collaborative consumption models run in practice, this paper performs an investigation on five car sharing systems which are successful startups built on collaborative consumption. A comparative analysis framework including service pattern, convenience, revenue stream and reputation system is developed. Then the business models of car sharing system are shaped along these four dimensions. The insights gained in this study can help car sharing operators to promote their services further through considering key issues of various business models and constructing a reasonable business model portfolio for their car sharing systems.

Organizational Impediments to Business Model Diversification

Despite the recognition that many firms operate a portfolio of business models, little is known about how business model diversification is associated with firm performance. In this study, we first examine why the coexistence of multiple business models within the same corporation creates organizational challenges, and when these challenges are most salient. We then examine how firms can overcome some of these organizational challenges. Using a unique panel dataset of firms in the retail- and wholesale-trade sectors (1997-2010), our results show that the proportion of unrelated (as opposed to related) business model diversification is negatively associated with firm profitability. We also find that firms can attenuate this negative relationship by separating conflicting business models across geographical markets, brand names, and industries. Overall, these findings contribute to the growing literature on the simultaneous operation of multiple business models.