Jaakko Aspara

Strategic management of business model transformation: lessons from Nokia

Purpose – This paper aims to offer a conceptualization of how and why corporate level strategic change may build on historical differentiation at business unit level.Design/methodology/approach – Methodologically, an historical case study of Nokia Corporations drastic business model transformation between the years 1987 and 1995 is reported.Findings – The conceptual and historical work results in a process model of business model change, demonstrating how central business units feed strategic alternatives and capabilities to the corporate‐level transformation process.Practical implications – The results highlight the importance of corporate level “market mechanisms that allow promising strategic alternatives to emerge and select out inferior options. In this process, a key mechanism is the exchange of executives and cognitive mindsets between business units and corporate headquarters (CHQ).Originality/value – The reported research offers an original contribution by showing the dynamic interplay of cogni...

Business model innovation vs replication: financial performance implications of strategic emphases

The purpose of this article is to examine the financial performance implications of a firms strategic emphases with respect to business model innovation vs replication. It is also examined how the financial performance implications differ between larger and smaller firms. Based on survey data including top managers reports from approximately 500 firms, the authors analyze the differences in average profitable growth across firms that differ in their strategic orientations. It is found that firms that have a high strategic emphasis on business model innovation as well as a high emphasis on replication exhibit a higher average value of profitable growth than firms that do not strategically emphasize either dimension. Concerning a strategy that puts a high emphasis on business model innovation but low on replication, a difference is found between small and large firms. Large firms with a high emphasis on business model innovation but low on replication exhibit, on average, weaker profitable growth than large firms with low emphases on both business model innovation and replication. In contrast, small firms with high emphasis on business model innovation but low on replication exhibit, on average, stronger profitable growth than small firms with low emphases on both business model innovation and replication.

Consumers’ Stock Preferences Beyond Expected Financial Returns: The Influence of Product and Brand Evaluations

Purpose: The purpose of the article is to examine the links between individual investors’ subjective evaluations of certain companies’ products and brands, on one hand, and their willingness and decisions to invest in those companies’ stocks, on the other. The authors challenge the traditional assumption that individuals would make stock investment decisions purely on the basis of expected financial returns and risks.Design/methodology/approach: Survey data was collected from 293 individuals who invest in the stock market of a European country and analyzed with PLS path modeling.Findings: In the clear majority of the consumers’ stock investment decisions that were analyzed, the consumers exhibited some willingness to invest in a chosen stock beyond its expected financial returns/risk. Two variables are found to elicit willingness to invest in a company’s stock beyond its financial returns: (1) the personal relevance that the individual attaches to domains (activities or areas of interest; ideas or ideals) supported or represented by the companys products and (2) the individual’s affective evaluation of the companys product brand. Research limitations/implications: Replicating the study with different companies from different industries and with consumers from different countries will be important. Overcoming a potential retrospection bias in the reported study is also a task for further research.Practical implications: The findings provide insights that can serve segmentation, targeting, and positioning when it comes to marketing a company in the stock market so as to attract investors. Originality/value: The article provides new evidence on the influence of product and brand evaluations in consumers’ stock investment decisions – suggesting that positive product evaluations elicit extra willingness to invest in a company’s stock, over and beyond its financial returns.

Individuals’ Affect-Based Motivations to Invest in Stocks: Beyond Expected Financial Returns and Risks

The purpose of this article is to study whether an individual investors affect towards a company causes him extra motivation to invest in the companys stock, over and beyond expected financial returns and risk. The authors examine survey data from 400 investors. They find that most investors had affect-based, extra motivation to invest in stocks, over and beyond financial return expectations. The more positive an individuals attitude towards the company was, the stronger was his extra investment motivation. Moreover, a special affective relationship that an investor may have towards a company—affective self-affinity—can further explain the extra investment motivation.

Exploration and Exploitation Across Three Resource Classes: Market/Customer Intelligence, Brands/Bonds, and Technologies/Processes

Purpose. Long-run corporate success requires engagement in two types of innovative activities: exploitation and exploration. However, earlier research has focused on exploration and exploitation concerning a firm’s technologies. The purpose of the present article is to explicitly examine exploration and exploitation related to customers and markets.Design/methodology/approach. The article is conceptual in nature, based on marketing, strategic management, and organization literatures.Findings. The article explains the logic of exploration-exploitation with respect to two market-related resource classes – (1) the firm’s knowledge of markets and customers (market/customer intelligence) and (2) market actors’ knowledge of and bonds to the firm (brands/bonds) – as viewed in combination with the resource class of (3) technologies, processes, and products (technologies/processes). The distinction of these three resource classes enables a three-dimensional conceptualization of the ideal types of a firm’s business development projects, which are seen as combinations of exploration and exploitation of resources across the three classes. The article also introduces the notions of multidimensionality of exploration-exploitation within the resource classes and relativity of resource newness. Originality/value. The article explicates how firms can orient their exploration and exploitation strategies not only on the technology dimension but also on the dimensions of market/customer intelligence and brands/bonds.

The Role of Company Affect in Stock Investments: Towards Blind, Undemanding, Noncomparative and Committed Love

This conceptual article aims to increase our understanding of the influence that individuals’ affective evaluations of companies have on their decisions to invest in companies’ stocks. Based on various psychological literatures, the authors explicate five different ways in which an individual investors positive affect toward a company may influence his decisions to buy/hold the companys stock. These include a positive influence that company affect has on optimism and overconfidence about the financial returns expected from the companys stock, as well as a negative influence on the required financial returns from the stock. The authors illustrate the influences with “love” metaphors.

Aesthetics of Stock Investments

Although there has been an increasing interest in the links between aesthetics and the market economy, researchers have largely ignored the aesthetics related to one class of economic behavior, i.e., individuals’ investments. The purpose of this article is to explicate what roles aesthetics may play in people’s evaluations of companies’ stocks as investment objects. First, the author explains that investment decisions are partly based on aesthetic intuition, which emerges as a counterpart to the logical‐epistemic analysis of company stocks. Second, it is explained that investment decisions are affected by the apprehended beauty of stocks in the sense of subjectively grasped “unity in variety” or “familiarity in the unfamiliar” which one may encounter when assessing a company and its earnings figures. Third, the author explains how an individual may actually have investment motives that go beyond the extrinsic/instrumental objective of maximizing expected financial returns. Such extra motives will be expressions of one’s ego or self and reflect the intrinsic appreciation of things represented by a company.

Stock Ownership as a Motivation of Brand-Loyal and Brand-Supportive Behaviors

Purpose: Individuals’ consumption psychology and investment psychology have been traditionally viewed as rather separate realms. However, researchers have recently begun to imply that an individual’s stock ownership in a company may positively influence his/her brand loyalty towards the company. The purpose of this article is to explicate the psychological motivations underlying this influence as well as to provide empirical evidence of it. Design/methodology/approach: A survey study of 293 individual stockowners of three companies is presented.Findings: The analysis shows that for a large proportion of individuals, becoming a stockowner of a company leads to positive, increased motivation to exhibit brand loyalty towards the company, in terms of his/her personal purchases of the company’s products. Second, the analysis shows how stock ownership often leads to increased motivation to engage in other brand-supporting behaviors, such as positive word-of-mouth. Research limitations/implications: The self-reported data used on individuals’ motivations somewhat restricts the results, which can be dealt with in further research.Practical implications: The findings imply opportunities for managers to benefit from the tendency of individual stockowners to engage in repeat purchasing of the company’s products and word-of-mouth, so as to increase the sales of the company. Originality/value: The article explicates the individual psychology motivations underlying the influence of a consumer’s stock ownership in a company on his/her brand loyalty towards the company – and provides empirical evidence of the motivations.