Business model design and performance in nascent markets

Abstract

Purpose

The purpose of this paper is to investigate the nascent market settings from a business model innovation perspective with the research questions: How do incumbents and start-ups make sense of an emerging technology through business model design in a nascent market setting, and how does business model choice influence firm performance?

Design/methodology/approach

The authors have tracked the development of four case companies in the nascent electric vehicle market from 2009 to 2018 and have conducted interviews and analyzed the archival data.

Findings

The authors propose a typology of business model choices and performance where the four types of business models distinguish themselves by how the companies innovate or imitate the value proposition of the current industry as well as how they innovate or imitate the business model archetype. In accordance with these different business model choices, the actors express different logics behind their new to the product market space business model choice. These logics represent different understandings of technology potential, customer needs as well as potential for value capture and contribute to and limit the translation of emerging technologies into dominant designs in diverse ways.

Originality/value

The business model is conceived as a focusing device that can be used to identify market applications for emerging technologies. As new disruptive technologies often require a new to the product market space business model, literature has in recent years put a premium on business model innovation. However, the linkages between emergent technologies and the choice of a novel business model are under investigated especially in relation to how business model choice affects business performance in nascent market settings. This paper aims at filling this gap.

Citation

Rask, M. and Günzel-Jensen, F. (2019), "Business model design and performance in nascent markets", Management Decision, Vol. 58 No. 5, pp. 927-947. https://doi.org/10.1108/MD-10-2017-0924