The path to outcome delivery: Interplay of service market strategy and open business models

Firms in a variety of manufacturing sectors as well as the software industry have increasingly embraced services alongside their product portfolios in order to improve financial performance. Yet, the key question “How do service market strategy change and the accompanying business model change interact, and how does their interplay affect value creation?” remains open. Relying on twelve case studies of firms that have shifted towards providing highly advanced services (e.g. outcome-based contracts), theoretical propositions concerning the interplay of market strategy and business model on value creation are derived. The firms studied report two interdependent changes: first, they evolve the market strategy from provision of pure products to provision of services and then outcomes, in order to achieve a better fit with customer needs and to grow their service businesses. Second, they rely increasingly on partners and suppliers to provide new activities that are outside their competence base. This 'open business model' allows them to grow their new service businesses effectively and efficiently. At the same time, however, the shift to a service market strategy requires enhanced accountability to customers and increases the threat of penalties in the case of failure, while reliance on partners and suppliers leads to loss of control over the activity system and increases the threat of failure due to third party dependency. Thus, this paper finds that the success of firms that shift to services and outcomes hinges on their ability to balance the trade-off between increased value (i.e. growth, efficiency and effectiveness) and increased uncertainty associated with service market strategy/open business model interplay.     

The business model dilemma of technology shifts

Technology shifts are lethal to many manufacturing companies. Previous research indicates that this is not purely a problem of technological innovation, but is also closely related to the inertia of business models and business model innovation. This paper inquires into the dynamics of this intersection between technology and business models. Anchored in a case study in the automotive industry, it reveals how a potential technology shift constitutes a business model dilemma for firms leading in the existing technology. The paper illustrates why technology shifts are so difficult to master and contributes to theory by suggesting that managing technology shifts does not require either technology or service innovation in order to create a viable business model, but instead a compound of both. Furthermore, the paper applies a business model perspective to illustrate the explanatory power of analyzing the challenges of technology shifts faced by incumbent firms.     

The role of openness in the fuzzy front-end of service innovation

The early stages of innovation involve high levels of uncertainty, leading to it being labelled as the “fuzzy-front end” (FFE). Although openness has been identified as pivotal to innovation performance in the open innovation literature, little effort has been put into exploring its role in the FFE. Specifically, this study examines ‘openness competence’ within the FFE–i.e., the ability of a FFE team to explore, gather and assimilate operant resources from external sources by means of external searches and inter-organisational partnerships. The aim is to investigate the impact of openness competence on front-end uncertainty reduction and service innovation success. Data were obtained from a survey of 122 IT-based service innovation projects implemented by IT service provider firms in Thailand. The results suggest that openness competence positively influences both the degree of uncertainty being reduced during the FFE and the overall success of service innovations. These findings offer several implications for research on open innovation and the FFE as well as encouragement to managers to apply a more open approach to the FFE of their service innovation projects.     

The impact of open innovation on firm performance: The moderating effects of internal R&D and environmental turbulence

Researchers have identified open innovation as two dimensions, external technology acquisition and external technology exploitation. This study explores the direct and interactive effects of these two dimensions on firm performance and further examines the moderation effects of two factors (i.e., internal R&D and environmental turbulence) on the relationship between both types of open innovation and firm performance. Based on Chesbrough's open innovation model, multi-item scales were developed to measure two dimensions of firm-level open innovation. Survey results of 176 Taiwanese high tech manufacturing firms provide support for most hypotheses. The result shows that external technology acquisition positively affects firm performance, whereas external technology exploitation does not. This study also finds that external technology acquisition strengthens the relationship between external technology exploitation and firm performance. Both external technology acquisition and external technology exploitation are positively related to firm performance under high internal R&D investment and a turbulent market environment. However, technological turbulence only positively affects the relationship between external technological acquisition, but not external technology exploitation, and firm performance. The findings contribute to enhanced understanding of how the degree of leveraging open innovation dimensions depends on their complementarity, internal R&D, and environmental turbulence.     

Business concepts of systemic service innovations in e-Healthcare

This paper contributes to the current understanding of systemic service innovations by making intensive inquiries into the issue of how to formulate a commercially viable business concept for e-healthcare. Business models as key to success in service innovations require formulating and articulating a good and meaningful business concept right from the beginning. Taking into account the systemic nature of e-healthcare services, the paper develops a conceptual framework and presents four cases gathered from Taiwan?s innovative e-healthcare programs to unveil the key ingredients of the business concept required for innovative e-healthcare services.     

Process innovation laboratory: a new approach to business process innovation based on enterprise information systems

Most organizations today are required not only to operate effective business processes but also to allow for changing business conditions at an increasing rate. Today nearly every business relies on their enterprise information systems (EIS) for process integration and future generations of EIS will increasingly be driven by business process models. Consequently business process modelling and improvement is becoming a serious challenge. The aim of this paper is to establish a conceptual framework for business process innovation (BPI) in the supply chain based on advanced EIS. The challenge is thus to create a new methodology for developing and exploring process models and applications. The paper outlines the process innovation laboratory (Π-Lab) as a new approach to BPI. The Π-Lab is a comprehensive framework and a collaborative workspace for experimenting with process models. The Π-Lab facilitates innovation by using an integrated action learning approach to process modelling in a controlled environment. The study is based on design science and the paper also discusses the implications to EIS research and practice.     

The impact of business innovation modes on SME innovation performance in post-Soviet transition economies: The case of Belarus

This study analyzes the most effective innovation modes (‘science and technology-based innovation’, STI, and ‘doing, using and interacting-based innovation’, DUI) for business innovation performance in the context of post-Soviet Transition Economies (PSTE). Their specificities are expected to influence both their business innovation modes and their impact on innovation output. In particular, we aim at identifying the specificities of PSTE in that the DUI mode alone (and its specific drivers) is more relevant than the STI mode alone (and its drivers). In our hypothesis, this outcome should be even stronger in the context of non-technological types of innovation (e.g. organizational innovation).     

Relationships among open innovation,innovative performance,government support and firm size: Comparing Brazilian firms embracing different levels of radicalism in innovation

This work extends knowledge concerning the relationships among open innovation, innovative performance and government support for innovation within Brazilian firms. Data were obtained from two different firm samples (Sample A, on incremental innovation, and Sample B, on radical innovation). The main research results are as follows. First, in considering government support for innovation, Sample B, based on radical innovation, played a superior and stronger role than Sample A. Secondly, for both samples, the cooperation of external firms has a positive effect on firms’ innovative performance, which was positively controlled by the size of the firms. Thirdly, in general, radical innovation requires synergy and a more intense focus regarding the constructs considered therein. This work also adds value in methodological terms, as this is the first research to have tested different models of samples with different levels of radicalism in innovation.     

The impact of just-in-time manufacturing on firm performance in the US

Just-In-Time manufacturing has been subjected to numerous studies both empirical and methodological. This work attempts to measure the impact of JIT on accounting measures of performance. Most technologies and investments are justified on the basis of their impact on financial and accounting measures which are not easily quantified. Our empirical methodology, simultaneous equation estimation, allows us to isolate the partial effects of JIT on various accounting measures thus gauging the true impact of this method on firm performance. Our results show that after JIT adoption firms reduced the labor content in facilities, increased inventory turnover and enhanced earnings. There was no significant impact on prices charged by the firm. These results support the anecdotal evidence on JIT and the theoretical work done by various authors. Even though the firms studied experienced a downturn in their performance our empirical methodology could identify positive benefits resulting from JIT adoption.     

Business model innovation and third-party alliance on the survival of new firms

In this study, we address the question of how the degree of business model innovation affects the survival of new firms. We present a newly constructed data set of 129 new firms that launched electronic trading platforms in the US bond market between 1995 and 2004 following the advent of Internet technology. We analyze the founding and survival of these new firms during the period of our study. We find that new firms with a high or low degree of business model innovation are more likely to survive for longer than new firms with a moderate degree of business model innovation. We show that partnering with third-party firms with complementary assets reduces the survival of new firms as the degree of business model innovation increases. We discuss the implications of our findings for managers, policy-makers and researchers.     

The impact of the logistics service standardization on firm value: Evidence from China

In 2014, the Standardization Administration of China launched its first pilot project of the logistics service standardization (LSS). We examine whether the staggered adoption of the LSS creates value for shareholders using a difference-in-difference research design. The findings suggest that firms located in LSS cities have higher firm value in terms of Tobin’s Q and stock returns than those of non-LSS cities. In further analysis, we find that the LSS enhances firm value by improving corporate operational efficiency. However, the LSS increases large firms’ market share at the expense of small firms. Overall, our findings advance the literature of logistics system reform and show that such reform creates value for shareholders.     

Commitment-based HR practices,different types of innovation activities and firm innovation performance

Research on human resource (HR) practices and innovation has increased in the strategic HR management literature over the last decades. Scholars suggest that commitment-based HR practices contribute to innovation performance of the firm. However, prior research puts little emphasis on the causal linkages among commitment-based HR practices, different types of innovation activities and firm innovation performance. This article opens the black box of the relationship between HR management and firm performance by examining the causal relationships among a bundle of commitment-based HR practices (i.e. a commitment-based HR system), different types of innovation activities and firm innovation performance. On the basis of a survey of 103 Turkish firms, empirical results show that a commitment-based HR system has a positive effect on process, organizational and marketing innovation activities. Furthermore, a commitment-based HR system mainly affects organizational innovation activities and shows that these innovation activities are the core drivers of process and marketing innovation activities, leading to higher rate of product innovation activities. Subsequently, product innovation activities enhance firm innovation performance, emphasizing their determinant role.     

How environmental innovation influences firm performance: A meta-analytic review

Coupled with the increasing concern toward sustainability and sustainable development issues, environmental innovation practices have been of burgeoning interest among both scholars and practitioners. Building on this, the main purpose of this study is to quantitatively aggregate the extant empirical research on eco-innovation and firm performance and to assess the role of moderating factors in this theoretical relationship by pursuing a meta-analytic approach. To serve this objective, 196 effects based upon 70 studies including more than 25,000 firms (N = 25,412) were meta-analytically examined. Quantitative evidence drawn from the meta-analysis indicates that organizational eco-innovation exerts the strongest influence on firm performance. Moreover, the meta-analytic findings suggest that significant variations in the correlation between eco-innovation and firm performance exist across different performance types, and the magnitude of the eco-innovation–firm performance association is stronger in developing compared with developed countries. This meta-analytic review is expected to considerably contribute to the pertinent literature by means of improving the understanding of the relevance of eco-innovation typology to firm performance.     

The influence of intelligent manufacturing on financial performance and innovation performance: the case of China

ABSTRACT

Artificial intelligence is increasingly used in advanced manufacturing systems to realise intelligent manufacturing. However, there is still a lack of empirical research on the impact of intelligent manufacturing on enterprise performances, especially for China. The author adopts the enterprise panel data of intelligent manufacturing implemented by China’s manufacturing industry in 2014 to 2019, and uses propensity score matching with difference in differences (PSM-DID) method to investigate the impact of intelligent manufacturing on financial performance and innovation performance. The research yields two main conclusions. First, the implementation of intelligent manufacturing has a significant role in promoting the financial performance and innovation performance of manufacturing enterprises. Second, technology-intensive industries improve the quantity of innovation by implementing intelligent manufacturing, thus promoting the improvement of short-term financial performance, but the improvement of innovation quality has a negative impact on short-term financial performance. In labour-intensive industries, the relationship between financial performance and innovation performance is not obvious.     

Business model innovation in cultural and creative industries: Insights from three leading mobile gaming firms

This paper contains an exploratory analysis of the business model innovations (BMIs) that firms in cultural and creative industries (CCIs) undertake along their life-cycle. Despite the role that creative and cultural and creative firms (CCFs) have in the economic development of industrialised countries, they tend to remain small and often fail due to industry-specific constraints and tensions, such as the lack of managerial capabilities and complexity in nurturing value chain relationships. However, there has been relatively limited scholarly interest into the specific conditions and processes that enabled CCFs to overcome these liabilities, and in particular into the identification of the business models they have adopted along their life-cycle. In this paper, this issue is analysed by using the concept of BMI, which sheds light on how the reconfiguration of the activity system through which a CCF creates, delivers and captures value enables the exploitation of entrepreneurial opportunities over time. This paper builds on an in-depth historical study of three leading firms operating in the mobile gaming industry, namely Rovio, Zynga and King Digital Entertainment. Three main results emerge from this study. First, in the ramp-up phase of their life-cycle, CCFs organize their resource architecture to build a strong and recognized reputation. Second, in the development phase, BMI is used to leverage new distribution paradigms. Finally, in the maturity phase, firms dedicate resources to innovate their product portfolios by providing platforms that support the development and testing of new creative ideas and solutions. Findings and implications are then discussed.     

商业模式与企业绩效：研究现状与发展

本文通过对现有关于商业模式与企业绩效关系研究的梳理和总结可以看出,商业模式是企业绩效差异的重要因素之一,商业模式创新成功会使企业绩效得到极大的改善和提升。文章总结了商业模型领域的研究现状,并进一步提出了未来研究的方向和方法的改进。     

Dynamic capabilities,creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation

Some scholars hold that dynamic capability (hereinafter DC) is one of the keys to achieving competitive advantage (hereinafter CA) and consequently, performance in strategic management. However, the definition and effects of DCs and the role of environmental dynamism are still under discussion. In the context of a Portuguese-like economy and from a strategic process perspective, this study defines dynamic capability as the potential to systematically solve problems, enabled by its propensity to sense opportunities and threats, to make timely decisions, and to implement strategic decisions and changes efficiently, thereby ensuring the right direction. Moreover, the ambidexterity view, exploring the indirect impact of exploitative and explorative capabilities, mediated by creativity and innovation competences (hereinafter IC) gives evidence of the influence on CA and firm's performance. Using an empirical study of 387 enterprises in Portugal, it was found that DCs, creativity and IC do significantly, positively, affect performance, while entrepreneurial orientation (hereinafter EO) is a moderator.     

How supply chain strategies moderate the relationship between innovation capabilities and business performance

The purpose of this paper is to study how the fit between innovation capabilities and supply chain (SC) strategies affects business performance. An empirical study based on a sample of 329 companies from Portugal and Brazil was performed to test a theoretical model based on the resource-based view. Linear and hierarchical regression analyses are conducted to test the hypotheses. The different combinations of core and supplementary innovation capabilities and lean and agile SC strategies are empirically tested and discussed. Data reveal that core and supplementary innovation capabilities positively impact on business performance and that SC strategies moderate the relationship between innovation capabilities and business performance. The analysis also shows that the combination of an agile SC strategy and supplementary innovation capabilities offers the greatest opportunities to improve business performance. The results of this study could help managers to choose the most appropriate SC strategy, thus contributing to increasing the impact of innovation capabilities on business performance. This study contributes to the knowledge concerning the consequences of adopting different innovation capabilities and SC strategies on business performance.     

Circular business model implementation: A capability development case study from the manufacturing industry

Circular business models (CBMs) have huge potential to deliver economic, social, and environmental benefits, but CBMs have yet to be implemented widely in industrial settings. One reason is that they are often presented as one-size-fits-all solutions, but this is misplaced because product-specific criteria and company capabilities determine the correct choice and implementation of CBMs. Therefore, the purpose of this paper is to investigate how CBM selection and capability development facilitates the implementation of CBMs. For this purpose, we have adopted a qualitative research approach and undertaken 25 explorative interviews in three large Swedish manufacturing companies. In this paper, a CBM implementation framework consisting of two parts has been developed. The first part addresses the choice of the appropriate CBM based on tactical configurations. The second part provides a capability development path by explicating underlying routines that need to be progressively developed in order to move smoothly to more advanced CBMs.