A conceptual framework is proposed to examine value creation through the evolution of business model themes. A critical assessment of the literature on business models, business model themes, and their evolution is presented. This assessment highlights the fact that business model themes are typically theorized as being static. Instead, the framework presented here characterizes business models and the business model themes of value creation as co-evolving within an evolving industry. The framework provides a set of propositions that specify how firms can create value by entering an industry, reacting to imitators, and co-evolving with product market strategies and with environmental factors. This study contributes to the literature on value creation through business model themes.
Catalyzed by firms’ use of digital technologies (Amit & Zott, 2001; Teece, 2010), the notion of a business model accounts for firm success or failure (Zott et al., 2011), offering a complement to the orthodox conceptions of the firm’s value chain, resources, and position (Massa et al., 2017). There is a consensus (Foss & Saebi, 2017) that the firm’s business model is an “architecture of value creation, delivery, and capture mechanism” (Teece, 2010, p. 172). According to this notion, value creation and appropriation are conceived as a firm’s boundary-spanning activity system, conducted by a set of actors linked by transaction mechanisms (Amit & Zott, 2001, Foss & Saebi, 2017; Writz et al., 2016).
4. Discussion and conclusions
Since the turn of the millennium, firms have succeeded in creating economic value on an unprecedented scale (Parker et al., 2016). Orthodox theories have proved ineffective at explaining this value creation, triggering rise to a notion of the business model to explain variation in firm performance (Massa et al., 2017), and thereby complementing, market-, firm- or industry-specific factors (Hawawini et al., 2003; McGahan & Porter, 2002; Rumelt, 1991). A focal firm’s business model is conceived as a firm-boundary spanning architecture, where several actors engage in activity systems linked with transaction mechanisms (Amit & Zott, 2001; Foss & Saebi, 2017; Teece, 2010). The key tasks of such architectures is to create, deliver, and appropriate value. A central feature of the business model is the business model theme (Amit & Zott, 2001). The business model architecture can be configured in such a way as to activate one or several of the four known value creation themes (Zott & Amit, 2007, 2008). The empirical literature on business model themes takes a static view, with several studies reporting seemingly unrelated findings regarding the success and failure of these business model themes. In response to an inconclusive empirical study (Zott & Amit, 2007) implying that a business model theme may be more successful in some contexts at a certain time than in other contexts at another time, this study contributes to the literature by presenting a novel framework for the conception of business model theme success.