Business Model Implementation within Networked Enterprises: A Case Study on a Finnish Pharmaceutical Project

Abstract

In many entrepreneurial projects, the concept of the business model (BM) is used to describe a business idea at a high-level and in a holistic way. However, existing literature pays less attention to implementation (or execution) of BM. Implementation becomes more complex when a BM is proposed by or requires a network of collaborating enterprises. The aim of this paper is to provide an approach based on empirical research that supports BM transition from design to implementation. The empirical data used in this paper is based on a case study involving an innovative project in the pharmaceutical sector in Finland. The case analysis demonstrates how a high-level BM needs careful consideration of its operational components from a network perspective to secure both value creation and capture. Drawing on the analysis, six concluding propositions on BM implementation in networked settings are put forward. Keywords: business model; business processes; networked enterprises; case study Introduction Magretta (2002) states that a business model (BM) is essential to every successful organization, whether it is a new venture or an established player. A growing community of scholars shares that view (see Pateli and Giaglis, 2004;Osterwalder et al., 2005;Zott et al., 2011). Strictly speaking, the design or innovation of a BM should be distinguished from its implementation as the former represents the business logic and the latter is the form BM takes in reality (Osterwalder et al. 2005). Despite increasing attention in academia and practice, literature on BM has mainly been focusing on frameworks that are highly useful in BM conceptualization, while largely neglecting the question of how a BM should be implemented in order to create and capture value (Bouwman et al., 2008Al-Debei and Avison, 2010;Teece, 2010). In response, scholars call for more attention to BM implementation and the inherent complexities (Veit et al., 2014;Wirtz et al., 2016), and emphasizing the urgency of guidelines and insights in how BM can be implemented and which operational factors may impede or contribute to implementation (Bask et al., 2010;El-Sawy and Pereira, 2013;Osterwalder et al., 2005).Part of the complexity can be attributed to the dynamic network-driven context of contemporary businesses (Haaker et al., 2006;Solaimani et al., 2015). Most BM frameworks take a single firm perspective and in that way ignore the fact that more often than not firms operate as multi-actor cross-industry networked enterprises. Networked enterprises are marked by heterogeneous inter-organizational processes and interdependencies (ElSawy and Pereira, 2013;Palo and Tähtinen, 2013), where value creation and capture is not a mere result of a dyadic relationship between provider and consumer, but value is created and captured by a collective effort of the involved network (Sharma et al., 2010). Hence, the twofold aim of this paper is to advance our understanding of BM implementation and the role of operational network processes in value creation and capture.The empirical...

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