Does business model experimentation in dynamic contexts enhance value capture?

Vendrell-Herrero, Ferran; Parry, Glenn; Opazo-Basáez, Marco; Sanchez-Montesinos, Francisco J.

Abstract

Copyright © 2018 Inderscience Enterprises Ltd. Established theory suggests that firms experiment with business models in dynamic contexts. However, the relationship between business model experimentation and organisational performance remains unclear. For this purpose, we propose an assessment of the economic value of business model experimentation in dynamic contexts by defining the unit of analysis at the industry level. Analysis draws upon a unique panel dataset from the recorded music industry composed of 414 observations from 32 countries for the period 1998-2010. The results show two optimal modes for maximising value capture in dynamic contexts. First, if a dominant format exists, a 'network' effect becomes prevalent which has a positive impact upon revenue. Second, when firms engage in experimentation leading to a highly diversified set of business models the industry sector becomes better able to capture value from diverse and changing consumer needs.

• Journal Article Type: Article
• Publication Date: Jul 3, 2018
• Journal: International Journal of Business Environment
• Print ISSN: 1740-0589
• Electronic ISSN: 1740-0597
• Publisher: Inderscience
• Peer Reviewed: Peer Reviewed
• Volume: 10
• Issue: 1
• Pages: 14-34
• APA6 Citation: Vendrell-Herrero, F., Parry, G., Opazo-Basáez, M., & Sanchez-Montesinos, F. J. (2018). Does business model experimentation in dynamic contexts enhance value capture?. International Journal of Business Environment, 10(1), 14-34. https://doi.org/10.1504/IJBE.2018.10014424
• DOI: https://doi.org/10.1504/IJBE.2018.10014424
• Keywords: business model, experimentation, value capture, music industry, format density
• Publisher URL: http://dx.doi.org/10.1504/IJBE.2018.10014424
• Additional Information: Additional Information : This is the author's accepted manuscript. The final published version is available at http://dx.doi.org/10.1504/IJBE.2018.10014424.