a configurational approach in business model design
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Institute of Management andOrganizational Behavior
A Configurational Approach in
Business Model Design
Christopher Kulins
Hannes Leonardy
Christiana Weber
To be presented at the 2015 Gika Conference, Valencia
07-14-2015
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
2
Definition: Business Model
Amit & Zott, 2001: 511
„A business model depicts the content, structure, andgovernance of transactions designed so as to create valuethrough the exploitation of business opportunities.“
Complementarities
Novelty
Lock-InEfficiency Value
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
3
Literature Review
Zott & Amit (2007): Novelty- and efficiency centered business model designs matter to the performance of entrepreneurial firms.
Zott & Amit (2008): Novelty-centered business models – coupled with product market strategies that emphasize differentiation, cost leadership, or early market entry – can enhance firm performance.
Brettel, Strese & Flatten (2012): Entrepreneurial venture’s performance of efficiency-centered business models increase with larger relationship marketing efforts. The performance of novelty-centered business models increases with a lower degree of such marketing efforts.
Wei et al. (2014): Efficiency-centered business model design enhances the negative effect of exploitative innovation and weakens the positive effect of exploratory innovation. Novelty-centered business model design weakens the negative effect of exploitative innovation.
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
4
A Configurational Approach to
Business Model Design
Complementarities
Novelty
Lock-InEfficiency
“the presence of each value driver can enhance the effectiveness of any other driver” (Amit & Zott, 2001: 509)
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
5
Research Purpose
I. Testing the interdependencies of the NICE-framework suggested by Amit & Zott (2001).
II. Identification of the underlying mechanisms between certain business model configurations and market value.
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
6
Methodology
Sample: 41 e-business companies that went public between 2009 and 2012 onthe NASDAQ or the NYSE.
Method: Fuzzy-set qualitative comparative analysis (fsQCA)
Conditions: - Complementarities, Efficiency, Novelty and Lock-in (scales provided by Amit & Zott, 2001, 2002)
- Thresholds for non-/full membership at 0.1/0.8. Linear graduation in between
Outcome: - Market Value at different points in time (Stuart et al. 1999)
- Non membership at $50 Mio. (“nano-cap”) (SEC, 2015)- Full membership $1.7 Bil. (“mid-cap”) (Carrion, 2013)
Data Source: SEC fillings and Orbis database
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
7
Truth Table
Efficiency Novelty Complementarities Lock-in Incl.
1 1 0 0 .894
0 1 0 1 .873
1 1 0 1 .866
1 1 1 0 .854
1 0 1 1 .832
0 1 1 1 .814
1 1 1 1 .802
0 0 1 1 .769
1 0 0 0 .759
1 0 1 0 .754
0 0 0 0 .735
0 0 0 1 .734
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
8
Results: Solution Terms
Complementarities
Novelty
Lock-InEfficiency Value
General Topic –Business Models
Research Question
Data Collectionand Methodology
Contribution
Results
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
9
Results: Solution Terms
Novelty
Lock-InValue
Consistency: 0.797 – Coverage: 0.363
General Topic –Business Models
Research Question
Data Collectionand Methodology
Contribution
Results
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
10
Results: Solution Terms
Novelty
Efficiency Value
Consistency: 0.817 – Coverage: 0.398
General Topic –Business Models
Research Question
Data Collectionand Methodology
Contribution
Results
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
11
Results: Solution Terms
Complementarities
Lock-InEfficiency Value
Consistency: 0.774 – Coverage: 0.363
General Topic –Business Models
Research Question
Data Collectionand Methodology
Contribution
Results
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
12
Results: Solution Terms
Additionally, we find no consistent solution for low performance!
Thus, the concept only explains success, but not failure
General Topic –Business Models
Research Question
Data Collectionand Methodology
Contribution
Results
Kulins, Leonardy & Weber – Institute of Management and Organizational Behavior
Institute of Management and OrganizationalBehavior
13
Contribution
I. We advance theory on business model design, highlighting the importance of all FOUR business model design themes and equifinality in business model design, bringing back complementarity and lock-in into the academic discourse.
II. Demonstrate that the commonly accepted theory about the four designs themes and their implication on firm performance can only explain success but not failure.
III. Shed light on the underlying mechanisms between certain business model configurations and market value.
IV. Successfully introduce qualitative comparative analysis to the business model discourse, hopefully inspiring more complex research designs.
V. We complement literature on configurational approach by empirically demonstrating its applicability in the context of business model design .
General Topic –Business Models
Research Question
Data Collectionand Methodology
Results
Contribution
Institute of Management andOrganizational Behavior
Thank you very much for your
attention
Christopher Kulins
Hannes Leonardy
Christiana Weber
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