How Much Does Business Model Matter for Firm Performance? A Variance Decomposition Analysis

Sohl, Timo; Vroom, Govert; Fitza, Markus

doi:10.5465/amd.2017.0136

Cited by 33 publications

(22 citation statements)

References 47 publications

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“…For example, this is the case in the retail industry. Sohl et al (2018) studied this industry with variance decomposition analysis using panel data on 917 businesses in the European retail sector over a 12-year period (2005-16). They found that the business model concept can explain a significant amount of variance in ROA (5.1 per cent) and market share (7.9 per cent), making it comparable in importance to industry effects.…”

Section: Towards a Business Model View Of Strategy: When Business Modmentioning

confidence: 99%

A Business Model View of Strategy

Lanzolla

Markides

2020

J Management Studies

125

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We argue that while the business model construct may not be entirely new, it can still provide a novel lens, complementary to Resource Based View and Market Positioning, to develop new theoretical insights in strategy. We propose that the consideration of interdependencies among the activities of a business model provides such a lens. We show that by starting strategy development with interdependencies among activities, we can: (1) develop new insights on how to build superior strategies; and (2) explain company performance variance especially when heterogeneity in resources and capabilities is not strong and barriers to imitation are weak. Overall, we propose that a promising research avenue for the business model literature is to integrate complexity theory with demand-side and supply side theories of strategy to generate more nuanced insights on what activities to connect and how to develop superior interdependencies among activities that can form the basis of superior strategies.

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Section: Towards a Business Model View Of Strategy: When Business Modmentioning

confidence: 99%

A Business Model View of Strategy

Lanzolla

Markides

2020

J Management Studies

125

View full text Add to dashboard Cite

show abstract

“…For instance, evidence shows that industries diverge significantly in terms of their attractiveness for new firms, with some offering more fertile ground than others (Shane, ). These observations from entrepreneurship research mirror the longstanding discourse in strategy on the importance of industry effects in shaping firm performance (Porter, ; Sohl, Vroom, & Fitza, in press). For example, McGahan and Porter (, p. 29) suggest that industry directly accounts for 36% of explained variation in business‐specific profits, and that “industry effects are more persistent over time than business‐specific or corporate‐parent effects.”…”

Section: Hypotheses Development: Unemployment Duration and Industry Cmentioning

confidence: 99%

Necessity entrepreneurship and industry choice in new firm creation

Nikiforou

Dencker

Gruber

2019

Strategic Management Journal

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Research Summary Research on necessity entrepreneurship has generated important insights, yet it views necessity entrepreneurs in developed countries as one encompassing group of unemployed individuals—ignoring that the level of need is not uniform but instead increases with time spent in unemployment. We begin to unpack the role of unemployment duration in necessity entrepreneurship by asking how it affects one of the most fundamental decisions in start‐ups: “what business should I be in?” Analyzing primary data on 576 necessity entrepreneurs combined with three secondary data sets, we find that unemployment duration affects whether ventures are launched in “home” or in external industries, and moderates the extent to which founders' industry experience and the attractiveness of external opportunities relative to those in the “home” industry shape industry choice. Managerial Summary Necessity entrepreneurs—individuals who create new firms because they have no other options for work—represent a substantial proportion of world‐wide entrepreneurial activity, and, in developed countries, often come from the ranks of the unemployed. We analyze these entrepreneurs by answering the question “what business should I be in?,” a fundamental strategic decision that founders make. Our findings reveal that duration in unemployment is a key, hitherto unexamined factor that systematically affects the industry‐choice decision in startups. Moreover, we find that duration of unemployment moderates the founder's industry experience and the attractiveness of external opportunities relative to those in the “home” industry, with a markedly different picture for the long‐term unemployed—suggesting the need for customized government policies for formerly unemployed entrepreneurs.

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“…Digital technologies form the basis for digitalization, but firm performance and growth stems from their configuration of activities for value creation, value proposition, and value capture -thus from the firm's business model(s) (Alberti-Alhtaybat et al 2019;Sohl et al 2018). The business model explains the "...logic of the firm, the way it operates..." (Demil et al 2015, p. 3), and "... the design or architecture of the value creation, delivery, and capture mechanisms" (Teece 2010, p. 172) of the firm.…”

Section: Introductionmentioning

confidence: 99%

Knowledge- and innovation-based business models for future growth: digitalized business models and portfolio considerations

2019

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Today's key challenge for firm growth relies in the integration of digital technologies and their use in new business models. Thus, firms increasingly engage in a digital transformation and in digitalizing their business model. Firms can apply digital technologies for improved or novel internal and external processes and integrate them in new business models. The digital transformation itself demands diverse knowledge from diverse origins in the firm. We examine the key concepts related to business model digitalization. We develop a conceptual matrix for portfolio considerations of firm business model digitalization. We introduce the seven contributions in this special issue on knowledge and innovation related to business and offer some recommendations for future research on the new working conditions and digital identities of firms.

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How Much Does Business Model Matter for Firm Performance? A Variance Decomposition Analysis

Cited by 33 publications

References 47 publications

A Business Model View of Strategy

A Business Model View of Strategy

Necessity entrepreneurship and industry choice in new firm creation

Knowledge- and innovation-based business models for future growth: digitalized business models and portfolio considerations

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