ON THE FUNCTIONAL FORM OF EARNINGS AND STOCK PRICES: INTERNATIONAL EVIDENCE AND IMPLICATIONS FOR THE E/P ANOMALY

This paper examines the functional form of earnings and stock prices on US and Finnish stock markets. Although the functional specification of the components of financial ratios based on purely accounting numbers has received considerable attention, the functional form of earnings and stock prices has not been investigated carefully enough. This investigation is, however, important because of the common use of E/P ratio in financial statement analysis. The empirical evidence provided by this study indicates that the proportional relationship between earnings and stock prices is rejected in both countries. In addition, it is discovered that this deviation from proportionality is a major factor producing the so-called E/P anomaly in these two countries.     

Key capabilities in knowledge-intensive service business

The purpose of this study is to identify key capabilities in knowledge-intensive service business. Current service research lacks evidence on this topic, since knowledge-intensive services constitute a very heterogeneous group, making the identification of key capabilities challenging. To bridge this gap, a conceptual framework is developed, integrating discussion on knowledge intensity with the classical service features. Empirical data are collected from two case firms with the help of focus groups, theme interviews and a survey. Based on the developed framework and analyzed data, we identify four specific capability categories of knowledge management, service productization, project management, and relationship orchestration.     

Coopetition for radical innovation: technology,market and business-model perspectives

Coopetition (collaboration between competing firms) is used in many contemporary industries to achieve various innovation-related benefits. However, there is still a lack of consensus in the existing literature as to whether it is beneficial in the case of radical innovations or whether it only supports incremental improvements due to the similarity of knowledge bases among competitors. We address this issue in an empirical study based on a cross-industrial survey in Finnish markets. The study focuses on three types of technological coopetition and on their effect on the technological, market and business-model radicalness of the firms’ innovations. The results show that coopetition is negatively related to technological radicalness and positively related to business-model radicalness. The implications are that coopetition is likely to benefit incremental technological development over time and to promote the emergence of radical business-model innovations as competitors seek to differentiate their offerings.     

Analyzing systemic customer value in scalable business services

This paper examines complex service offerings and the creation of systemic customer value in such settings. We explore the extent to which customers value systemic offerings as opposed to more separated offerings. We conducted a questionnaire survey within the customer base of two Finnish service companies. We utilized t-tests to find out how systemic offerings and separated offerings differed in terms of perceived customer value along different dimensions. The findings support the claim that systemic offerings are valued more than offerings that are more separated in nature. The results of the study carry practical implications for firms offering complex and integrated service solutions. In addition, analyses of the service-value elements included in the offering and of the related customer value will enable firms to optimize their service provisioning so as to give higher customer value and subsequently enhance their competitive advantage.     

Platform design framework: conceptualisation and application

Technological platforms enable actors to connect their resources across markets, creating value through complementarities and network effects. The design choices related to different aspects of a platform are crucial for ensuring value creation. Building on earlier literature, we have developed a framework for platform design, involving four elements: 1) platform architecture, 2) value creation logic, 3) governance, and 4) platform competition. Using a design science approach, we provide an empirical illustration of design choices in the Mobility-as-a-Service (MaaS) platform DORA. The study presents an overarching framework for platform design, with an empirical use case illustrating its applicability.     

Incremental and Radical Innovation in Coopetition—The Role of Absorptive Capacity and Appropriability

This study examines why some firms are better able than others to reap benefits from collaborating with their competitors in innovation. Whereas on the general level, collaborative innovation has been studied widely, and firm‐specific success factors in collaboration between competitors (i.e., coopetition) have not been exhaustively addressed. Earlier literature describes coopetition as a risky but potentially rewarding relationship in which sharing, learning, and protection of knowledge are recognized as the key issues determining the possible benefits and hazards. This study provides evidence of factors related to this, suggesting that the firm's ability to acquire knowledge from external sources (potential absorptive capacity) and to protect its innovations and core knowledge against imitation (appropriability regime) are relevant in increasing the innovation outcomes of collaborating with its competitors. This study also distinguishes between incremental and radical innovations as an outcome of coopetition, and provides differing implications for the two innovation types. The empirical evidence for the study was gathered from a cross‐industry survey conducted on Finnish markets. The data are analyzed with multivariate multiple regression analysis. The results of the analysis suggest that (1) potential absorptive capacity and appropriability regime of the firm both have a positive effect in the pursuit of incremental innovations in coopetition, and (2) in the case of radical innovations, appropriability regime has a positive effect, while the effect of absorptive capacity is not statistically significant. However, the results also indicate that there is a moderating relationship between these variables, in that the potential absorptive capacity is positively associated with creation of radical innovations within high levels of appropriability regime. These results yield important theoretical and managerial implications. As a whole, the results presented in this study provide new evidence on which types of firms can reap success in the challenging task of collaborative innovation with rivals. In the case of incremental innovation, a firm‐level emphasis on knowledge sharing and learning will positively affect the results of coopetition, as will an emphasis on knowledge protection. Thus, when incremental developments are pursued in coopetition, firms should not only seek to exchange knowledge to create value but also remember to secure the firm‐specific core knowledge within the firm's borders to stay competitive. On the other hand, when the firm is pursuing radical innovation with its rivals, the heaviest emphasis should be on protecting its existing core knowledge and also emerging novel innovations and market opportunities. Capabilities in knowledge acquisition are also beneficial in these cases, but the full benefits of knowledge exchange realize only when the firm's knowledge protection mechanisms are sufficiently strong, allowing for safe knowledge exchange between rivals.     

Notes on terminology

Notes on terminology     

Waking the sleeping beauty: Swarovski’s open innovation journey

Even in today’s turbulent business environment, there are companies in many industries that have enjoyed decades of relatively undisturbed success. However, eventually, after such prolonged periods of calm, existing market positions are challenged. We describe such companies as ‘Sleeping Beauties’ and discuss how they can reinvent themselves through opening up of their boundaries and moving from compartmentalized exploitation and exploration efforts to a more dynamic ambidexterity model. We analyse Swarovski’s open innovation journey in this regard, instigated as a response to recent changes in its business environment. Our analysis of this process offers useful insights for companies struggling with similar problems.