Identification and Conceptualization of Dynamic Capabilities for Business Model Adaptation in ICT Industry

Subject Areas : Strategic Management Researches

Arman  Deilami Azodi ¹ (PhD Student, Strategic Management, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran)
seyed hamid  khodadad Hosseini ² (Professor of Business Management, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran)
asadolah  kordnaeij ³ (Professor of Business Management, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran.)
asghar  moshabaki ⁴ (Professor of Business Management, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran.)

Received: 2020-03-01 Accepted : 2020-06-25 Published : 2020-08-22

Keywords: Business Model, Dynamic Capability, Business Model Adaptation, Multi grounded theory, ICT industry,

Abstract :

Achieving success by an organization and creating value for a long time depends on having an efficient business model in different periods of business cycles. This adaptation to the business model requires the capabilities that need to be created in the organization. The development of these capabilities helps organizations to overcome the inflexibility of their active business model and implement the change process in a systematic and structured way. For this purpose, businesses must constantly monitor their environmental forces and adapt themselves to these changes to stay competitive. The purpose of this study identifies the dynamic capabilities to adapt and change the organization's business model. For this purpose, the ICT industry has been studied and using Multi grounded theory, data analyzed from systematic literature review over the past 15 years, and interviews with 18 industry experts, which are improbably and purposefully selected using the snowball method. Finally, a model was developed in which the dynamic capabilities needed to adapt the business model of the ICT industry into the four groups of "external observation and evaluation", "internal resource renewal", "external resource acquisition" and "internal resource reconfiguration" have been conceptualized. Also, business model adaptation has been conceptualized into three groups: "value proposition adaptation", "value creation adaptation" and "value capture adaptation".

References:

اشتراوس، آنسلم و کوربین، جولیت، (1390)، اصول روش تحقیق کیفی: نظریه مبنایی، رویهها و روشها، ترجمه بیوک محمدی، تهران، پژوهشگاه علوم انسانی و مطالعات فرهنگی، چاپ سوم.

Achtenhagen, L., Melin, L., & Naldi, L. (2013). Dynamics of business models-strategizing, critical capabilities and activities for sustained value creation. Long Range Planning, 46, 1–25.

Afuah, A. (2014). Business Model Innovation: Concepts, Analysis, and Cases. New York: Routledge

Alsos, G. A., Borch, O. J., Ljunggren, E. & Madsen, E. L. (2008). Dynamic Capabilities – Conceptualization and Operationalization, Presented at The Academy of Management Conference, Anaheim, USA, 8-13.

Andries, Petra, Debackere, Koenraad. (2007). Adaptation and Performance in New Businesses: Understanding the Moderating Effects of Independence and Industry, Small Business Economics, 29;81–99

Anyanwu, Chioma (2016). Dynamic Entrepreneurial and Managerial Role in the Front End Loading (FEL) Phase for Sensing and Seizing Emerging Technologies, Management, 6(5); 146-157

Aspara. Jaakko, Lamberg. Juha-Antti, Laukia. Arjo, Tikkanen, & Henrikki, (2011). Corporate Business Model Transformation and Inter-Organizational Cognition: The Case of Nokia, Long Range Planning, 46 (6), 459-474

Baden-Fuller, C. & Mangematin, V (2013). Business models: a challenging agenda. Strategic Organization, 11, 418–427.

Balboni. Bernardo, Bortoluzzi. Guido (2015). Business Model Adaptation and the Success of New Ventures, Journal of Entrepreneurship Management and Innovation (JEMI), 11 (1), 119-140

Balocco, R., Cavallo, A., Ghezzi, A., Barbegal-Mirabent, J (2019). Lean Business Models Change Process in Digital Entrepreneurship. Business Process Management Journal, 1-24.

) Battistella. Cinzia, F. De Toni. Alberto, De Zan. Giovanni, Pessot. Elena, (2017), Cultivating business model agility through focused capabilities: A multiple case study, Journal of Business Research, 73, 65-82.

Borch, O. J., & Madsen, E. L (2007). Dynamic capabilities facilitating innovative strategies in SMEs. International Journal of Technoentrepreneurship, 1:109-125

Casadesus-Masanell, R. & Ricart, J. E (2009). Competing through Business Models (A): Business Model Essential», Unpublished: Module note – aid to students in the course, Competing through business models». Boston: Harvard Business School Publishing

Chesbrough H (2010). Business model Innovation: opportunities and barriers, Long Range Planning, 43, 354–363

Christensen, C.M., Bartman, T., V. & Bever, D. (2016), The hard truth about business model innovation, MIT Sloan Management Review, 58, 31- 40

Clauss, Thomas (2017). Measuring business model innovation: conceptualization, scale development, and proof of performance, R&D Management, 47.3, 385-403

Coh, M., Salmi, P. & Torkkeli, M (2005). Dynamic capabilities in SMEsThe integration of external competencies. Paper presented at the Strategic Management Society conference, Orlando, FL, USA, 23-26.

Cortimiglia, M.N., Ghezzi, A. & Frank, A.G (2016). Business model innovation and strategy making nexus: evidence from a cross-industry mixed-methods study, R&D Management, 46, 414-432.

Creswell, W. John., Creswell, J. David. (2018). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches 5th Edition. Kindle Edition.

Dahan, Nicolas M., Doh, Jonathan P, Oetzel, Jennifer, Yaziji, Michael (2010). Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets, Long range planning, 43, 2, 326-343

Demil, B, & Lencocg, X (2010). Business model evolution: in search of dynamic consistency, Long Range Planning, 43, 227–246.

Den Oever, van, K., & Martin, X (2015). Business Model Change: Managerial Roles and Tactics in Decision-Making, Business Models and Modelling (Advances in Strategic Management), Emerald Group Publishing Limited, 387-420.

Deslée, C. & Ammar, O (2016). Transforming SNCF’s business model through the evolution of participative innovation routine, European Business Review, 20 (4), 467-485

Dopfer, Martina, Fallahi, Sara, Kirchberger, Markus, Gassmann, Oliver (2017). Adapt and strive: How ventures under resource constraints create value through business model adaptations, Creativity and Innovation Management, 26(3), 233-246

Doz Y, L, & Kosonen M (2010). Embedding strategic agility a leadership agenda for accelerating business model renewal, Long Range Planning, 43, 370–382.

Dunford, R., Palmer, I & Benveniste, J (2010). Business model replication for early and rapid internationalisation: the ING direct experience, Long Range Planning, 43 (5), 655–674

Eisenhardt K.M., & Martin JA, (2000), ‘Dynamic capabilities: what are they?’, Strategic Management Journal, 21(10/11): 1105–1121.3

Eyring, M.J., Johnson, M.W. & Nair, H (2011), New business models in emerging markets, Harvard Business Review, 89, 89-95.

Goldkuhl, G. & Cronholm, S (2010). Adding theoretical grounding to Grounded Theory: Toward Multi-Grounded Theory. International Journal of Qualitative Methods. (9)2, 187-205

Groeger. Lars, Brucea. Kyle & Rolfe. Iain (2019). Adapt fast or die slowly: Complex adaptive business models at Cisco Systems, Industrial Marketing Management, 77, 102-115

Hartmann, P.M., Hartmann, P.M., Zaki, M., Zaki, M., Feldmann, N. & Neely, A (2016). Capturing value from big data – a taxonomy of datadriven business models used by startup firms, International Journal of Operations and Production Management, 36, (10), 1382-1406

Huarng, K.-H (2013). A two-tier business model and its realization for entrepreneurship. Journal of Business Research, 66, 2102–2105

Johnson, M (2010). Seizing the white space Boston: Harvard Business School Publishing

Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M. & Goh, E (2013). The innovation bottom line, MIT Sloan Management Review, 54, 1-20

Koen, P.A., Bertels, H.M.J., & Elsum, I.R. (2011) The three faces of business model innovation: challenges for established firms. ResearchTechnology Management, 54, 52–59

Kohler, T. (2015), “Crowdsourcing-based business models”, California Management Review, Vol. 57 No. 4, pp. 63-84

Kurti, Erdelina, and Haftor, Darek M., (2014), " The Role of Path Dependence in the Business Model Adaptation: From Traditional to Digital Business ", MCIS 2014 Proceedings. 28

Landau. Christian, Karna. Amit and Sailer. Miriam, (2016), Business model adaptation for emerging markets: a case study of a German automobile manufacturer in India, R&D Management 46, 3

Laudien, S.M & Pesch, R. (2019). Understanding the influence of digitalization on service firm business model design: a qualitative-empirical analysis 13, 575–587

Lokshin, B., Gils, A. V., & Bauer, E. (2009). Crafting firm competencies to improve innovative performance. European Management Journal, 27(3), 187–196.

Madsen, E. L (2010). A Dynamic Capability Framework: Generic Types of Dynamic Capabilities and Their Relation to Entrepreneurship. In S. Wall, C. Zimmermann, R. Klingebiel, & D. Lange (Eds.), Strategic Reconfigurations: Building Dynamic Capabilities in Rapid InnovationBased Industries. Edward Elgar Publishing: Cheltenham

Mason, K. & Spring, M. (2011), “The sites and practices of business models”, Industrial Marketing Management, Vol. 40 No. 6, pp. 1032-1041

Matzler, K., Bailom, F., Friedrich von den Eichen, S., & Kohler, T. (2013). Business model innovation: coffee triumphs for Nespresso. Journal of Business Strategy, 34, 30–37

McKelvie, A & Davidsson, P (2006), From resource base to dynamic capabilities: An investigation of new firms, Paper submitted to workshop on The practice of dynamic capabilities: Theory development and research. Lancaster University Management School, UK

Morris, M.H., Shirokova, G. & Shatalov, A. (2013), “The business model and firm performance: the case of Russian food service ventures”, Journal of Small Business Management, Vol. 51 No. 1, pp. 46-65

Nussholz, Julia L.K. (2018), “A circular business model mapping tool for creating value from prolonged product lifetime and closed material loops”, Journal of Cleaner Production

Oliver, John J. (2018), Strategic transformations in the media, Journal of Media Business Studies, Vol 15, Issue 4, pp 278-299

Osterwalder A & Pigneur Y & Tucci CL, (2005), Clarifying business models: origins, present, and future. Communications of AIS 15: 1–40

Osterwalder, A., Pignuer, Y. (2010), Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers, John Wiley & Sons

Petticrew, M., & Roberts, H. (2008). Systematic reviews in the social sciences: A practical guide. John Wiley & Sons

Rachinger. Michael, Rauter. Romana, Müller. Christiana, Vorraber. Wolfgang, Schirgi. Eva, (2018), "Digitalization and its influence on business model innovation", Journal of Manufacturing Technology Management, Vol. 30 No. 8, pp. 1143-1160.

Rindova, V. & Taylor, M. S. 2002. Dynamic Capabilities as Macro and Micro OrganizationalEvolution. Working paper. University of Maryland, Robert H. Smiths School of Business.

Saebi,T, Lasse Lien, Nicolai J. Foss, (2016), What Drives Business Model Adaptation? The Impact of Opportunities, Threats and Strategic Orientation, Long Range Planning, long Range Planning, Volume 50, Issue 5, Pages 567-581

Saebi. Tina, (2014), Business Model Evolution, Adaptation or Innovation? A Contingency Framework on Business Model Dynamics, Environmental Change and Dynamic Capabilities, Oxford University Press, http://ssrn.com/abstract=2403151

Savic. N, Ograjensek. R, Rejc Buhovac. A, (2016), The Drivers of Success in Business Model Transformation. Economic and Business Review, Volume 18, No. 1, Pages 103–124

Sawhney, M., Wolcott, R.C., and Arroniz, I. (2011) The 12 different ways for companies to innovate. MIT Sloan Management Review, 47, 3, 28–34

Shafer, S.M., Smith, H.J. and Linder, J.C., (2005), The power of business models. Business Horizons, 48(3), pp. 199-207.

Sharma. Sunil, R. Dixit. Mukund, Karna. Amit, (2016),"Design leaps: business model adaptation in emerging economies", Journal of Asia Business Studies, 10 (2)

Teece DJ, Pisano G & Shuen A (1997) Dynamic capabilities and strategic management. Strategic Management Journal 18(7): 509–533.

Teece, D. J. (2010) Business Models, Business Strategy and Innovation. Long Range Planning, 43(2-3), 172-194.

Teece, David J. (2018), Business models and dynamic capabilities, Long Range Planning, Volume 51, Issue 1, Pages 40-49

Velu .Chander, (2017), A Systems Perspective on Business Model Evolution: The Case of an Agricultural Information Service Provider in India, Long Range Planning, Volume 50, Issue 5, Pages 603-620

Verona, G. & Ravasi, D. (2003), Unbundling dynamic capabilities: an exploratory study of continuous product innovation. Industrial and Corporate Change, 12: 577-606

Voelpel, S.C., Leibold, M., Tekie, E.B., (2004), The wheel of business model reinvention: how to reshape your business model to leapfrog competitors, Journal of Change Management 4 (3), 259–276

Wang CL & Ahmed PK, (2007), Dynamic capabilities: a review and research agenda, International Journal of Management Reviews, 9(1): 31– 51

Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long Range Planning, 49, 36–54.

Yunus, M., Moingeon, B. and Lehmann-Ortega, L. (2010), “Building social business models: lessons from the grameen experience”, Long Range Planning, Vol. 43 Nos 2/3, pp. 308-325

Zollo M & Winter SG, (2002), Deliberate learning and the evolution of dynamic capabilities, Organization Science, 13(3): 339–351.

Zott, C. & Amit, R., (2010), Business Model Design: An Activity System Perspective, Long Range Planning, 43(2-3), 216-226