co-creation of value2010 - Value Co-creation in Business...

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The Business Review, Cambridge * Vol. 15 * Num. 2 * Summer * 2010 171 Value Co-creation in Business Models: Evidence from Three Cases Analysis in Taiwan Dr. Yung-Ching Ho, Dr. Hui-Chen Fang, and Jing-Fu Lin National Chung Cheng University, Taiwan, R.O.C. ABSTRACT Business models have received great attention from, and have been widely applied by, both academic and practical fields. Utilizing a longitudinal dataset of 3 Taiwanese firms in different industries from 2000 to 2008; this study finds that, first, taking business model as the unit of analysis can effectively explain the process by which an organization and its partners can co-create value; second, business model design is a source of corporate innovation, and can create a competitive advantage; third, a business model is a dynamic, evolutionary process allowing a firm to respond to change in the external environment, and make appropriate adjustments that enable it to seize opportunities and create even greater value. Overall, results of this study shed significant light on the issues concerning dynamics of business model evolution. Key words: Business model, Value co-creation, Innovation, Competitive advantage INTRODUCTION Globalization, an intensely competitive environment, and the emergence of information and communications technology have blurred corporate boundaries, and have expanded the roles of market participants (buyers, suppliers, competitors, complementary products), and reached across the industry (Eisenhardt and Martin, 2000; Moller et al., 2008). As a result, scholars and managers have noticed that boundary-spanning business models best demonstrate that an organization must be connected with the external environment so that it can effectively sense and seize market opportunities (Brink and Holmen, 2009; Dyer and Singh, 1998; Kale, et al., 2002; Kodama, 2009; Teece, 2007; Zott and Amit, 2007; 2008). Furthermore, the review of academic business management research in Ostenwalder et al. (2005) reveals that the term “business model” appeared frequently in the literature in 2000, which was not only connected with the many technology and information firms that had appeared in the around that time, but also revealed recent academic interest in business model research. In the realm of industry, Apple's "iPod (hardware) + iTunes (software) + iTunes Music Store (music store network)" cross-boundary business model (Business Week in Taiwan, 2009) allows consumers to download different types of software and music, meets individualized needs, and has boosted iPod sales volume. Apple's business model is completely different from Nokia's business model, which relies entirely on the sale of cell phone hardware, and Apple's profitability surpassed that of Nokia during the third quarter of 2009. In another example, the introduction of pre-ordered New Year's meals by Taiwan's 7-11 in 2002 involved firms in different industries (retailers and restaurants), and enabled firms with and without kitchens to provide consumers diversified dining
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co-creation of value2010 - Value Co-creation in Business...

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