Liisa-Maija Sainio

Appropriability Regime for Radical and Incremental Innovations

In the present day markets, new product development and innovation are essential for value creation. Innovation, however, hardly provides benefits if rivals are able to copy it with little or no extra cost. Consequently, being able to build an appropriability regime that provides effective protection against imitation and enables getting returns on investments in innovation is necessary. The problem is that choosing the methods to protect different kinds of innovations is not straightforward. In this paper we study appropriating from radical and incremental innovations. It is widely known that many significant differences exist between the two innovation types, and the appropriability conditions are no exception. Empirical evidence on the topic is provided by analyzing survey data collected among 299 companies. As a result, the effects of environmental dynamism and research and development (R&D) intensity on radical and incremental innovation are illustrated, and knowledge is provided on the role of the appropriability regime in enhancing the potential to profit from radical and incremental innovations.

Coopetition for radical innovation: technology, market and business-model perspectives

Coopetition (collaboration between competing firms) is used in many contemporary industries to achieve various innovation-related benefits. However, there is still a lack of consensus in the existing literature as to whether it is beneficial in the case of radical innovations or whether it only supports incremental improvements due to the similarity of knowledge bases among competitors. We address this issue in an empirical study based on a cross-industrial survey in Finnish markets. The study focuses on three types of technological coopetition and on their effect on the technological, market and business-model radicalness of the firms’ innovations. The results show that coopetition is negatively related to technological radicalness and positively related to business-model radicalness. The implications are that coopetition is likely to benefit incremental technological development over time and to promote the emergence of radical business-model innovations as competitors seek to differentiate their offerings.

Value creation of an internationalizing entrepreneurial firm

Purpose – In order to respond to the call for a broader perspective on the internationalization of entrepreneurial firms, this study aims to bring the business model concept to the context of international entrepreneurship, with special emphasis on the notion of value formation and value exchange at company interfaces.Design/methodology/approach – This is a cross‐case study based on qualitative data from business model workshops with key company informants in each case firm.Findings – The findings of the study indicate that, although the business models of firms with comparable positions may appear similar, there are fine‐grained differences both in their activities and in their value formation. In addition, the data collection workshops revealed that firms tend to neglect the inspection of their incentives to their partners, as they concentrate on value formation to end‐customers.Practical implications – From the managerial point of view, the study shows how the managers of international entrepreneurial ...

Customer knowledge processing and key account performance

Purpose – The purpose of this paper is to identify the dimensions of customer knowledge processing (CKP) in the context of key account management (KAM), and to examine its relationship with the suppliers key account performance.Design/methodology/approach – The findings of the paper are based on empirical survey data collected among large industrial firms in Finland.Findings – The findings of the research show that CKP is a three‐dimensional construct made up of acquisition, dissemination, and utilization. The degree of acquisition and utilization are found to be significantly associated with the suppliers key account performance.Practical implications – In order to improve key account, performance managers need to recognize customer interaction as a source of customer knowledge. In addition to acquiring knowledge about their customers, they also need to learn to utilize the knowledge residing in them in their customer‐value‐creation processes.Originality/value – CKP is represented in this paper as a co...

An Online Success Story: The Role of an Online Service in a Magazine Publisher's Business Model

The aim of this article is to provide a holistic exploration of the development of the business model of a magazine Web site, and of the factors behind its success. The discussion is based on an explorative case study of a successful Finnish magazine publisher and its Web site. We use triangulated data (interviews, observation, statistical data, customer feedback, newspaper articles) to describe and analyze the development of the Web site and the subsequent changes in the e-business model of the magazine from the Web site foundation in 1998 to the situation in fall 2004. Our case illustrates that a magazine’s Web site is linked to all of its functions (editorial, circulation, and advertising), and to the business-model elements that are vital to its success. We suggest that the discussion forums in question, one type of virtual community, benefited from the positive feedback that resulted in positive network effects, and led to the adoption of the service. Moreover, community activities have enhanced customer loyalty and added a more lifelike dimension to the magazine concept. As such, the Web site now complements rather than substitutes the print magazine. Interestingly, although it does not independently fulfill the requirements of a successful business model (e.g., Magretta, 2002), it enhances the customer experience and adds new dimensions to the magazine’s business model.

Synergistic effect of technology and customer relationship orientations: consequences for market performance

Purpose – This study aims to examine the effect of firm-specific customer relationship orientation, technology orientation and the marketing–R & D cooperation on market performance. Although the importance of customer focus in R & D has been widely recognized in the literature, less attention has been paid to customer relationship orientation and the simultaneous effect of the three constructs on market performance. Design/methodology/approach – The hypotheses are tested on a multi-industry survey study of 209 R & D-intensive firms in Finland using hierarchical regression analyses, including both direct and interactional effects. Findings – The findings show that customer relationship orientation has a direct positive effect on market performance and that technology orientation also has a positive, yet non-significant effect. In addition, the effect of both of these strategic orientations is accentuated when collaboration between marketing and R & D departments is high, providing evidence on the significant moderating effects of these types of processes. Research limitations/implications – The implications of the research can be interpreted as being generalizable at least to some extent due to the multi-industry nature of the sample. However, the research is bound to a certain type of firm (R & D-intensive) and to a certain national context (Finland), which poses limitations to the study. Practical implications – The results suggest specific benefits for integrating specialist, complementary knowledge into a firm in terms of R & D and marketing knowledge. Practicing managers across departments should thus consider not only focusing on their specialist areas in markets (e.g. customers or technology) but also utilizing complementary insights within the firm to reap benefits in their fields. Originality/value – The study focuses on the less-researched concept of customer relationship orientation in parallel with the more established technology orientation. It also provides novel evidence on how the effectiveness of these orientations benefits from firm-internal knowledge transfer between the marketing and R & D departments.

The Relationship Between Business Model Experimentation and Technical Debt

The use of lean software development methodology and business model experimentation has become popular in software companies in recent years. Business model experimentation is used to validate assumptions made on a product from real customers before the actual product is created. A minimum viable product is used to test the business model by gathering and measuring customer feedback. However, in many cases creating a minimum viable product requires the development team to take shortcuts and workarounds in the product. This phenomenon in software development is called ‘technical debt’, where companies trade long-term software quality to short-term gain in time-to-market. We investigated four software companies and conducted nine interviews to understand the relationship between business model experimentation and technical debt. The goal was to study how business model experimentation is affecting to technical debt. The results showed that business model experimentation has a clear relationship to technical debt.

Taking initiative in market creation – a business ecosystem actor perspective

The purpose of this paper is to examine the role of taking initiative in developing next generation communication services. Focusing on different actors in our analysis, we adopt a business ecosystem perspective, where the role of network effects and interoperability are seen as prerequisites for market creation. In order to create new markets, however, certain actors need to take the initiative and subsequent risks. We provide an exploratory case study on IP multimedia subsystem (IMS) technology, which shows that taking initiative by different actors differ significantly in various phases of the development of new communication offerings. Thus, it is important to recognise that there is not only a need for a hub firm to lead the development as a whole, but more likely there is a need for several actors taking the initiative in the right time and at the right place.

Forging the Link between Business Model and Value Chain Constructs in the Context of an Internationalizing Entrepreneurial Firm — A Case Study

Expansion to international markets requires changes in company strategy in order for it to fit into the novel environment (Calof and Beamish, 1995; Lam and White, 1999; McDougall and Oviatt, 1996). However, prior research on international entrepreneurship (IE) provides only a limited understanding of how companies change during internationalization (Nummela et al., 2006), and how this internal change is reflected in their value chain. The concept of the value chain seems to be central in IE research, which emphasizes that successful internationalization is based on controlling, not necessarily owning, value-creating assets and knowledge located in different parts of the globe (Oviatt and McDougall, 1994). Internationally entrepreneurial firms move their assets globally in order to stay competitive. Consequently, the value chain of these companies is often disintegrated and globally dispersed, and the company itself resembles a ‘global factory’ that reflects the combination of the innovation, distribution and production of goods and services worldwide (Buckley, 2009; Buckley and Ghauri, 2004). We do not assert, however, that all the value chain activities of entrepreneurial firms need to spread globally. For example, due to a global specialization in many industries, such as information and communications technology (ICT), some value chain activities never diffuse to all the continents of the ‘triad’, but locate more on a regional basis (e.g. sourcing and production in China and India). Therefore it might also be more efficient for a company to pursue regional rather than global strategy (Rugman and Verbeke, 2004).

A framework for analysing the effects of new, potentially disruptive technology on a business model case: Bluetooth

This paper presents a framework for analysing the effects of a new, potentially disruptive technology on a firms business model using Bluetooth technology and its possible effects on an operators business model as an exploratory case example. The theoretical section discusses the classifications of new technologies and the conceptual relationships between such concepts as disruptive technologies and discontinuous innovations. The different definitions of the concept of business model are presented and the concept is set into the context of the resource-based view of the firm with modifications. The propositional framework is used to estimate both the disruptiveness potential of a new technology and the strategic importance of a new technology, both of which determine the possible amount of radical changes in a firms business model.