Digital business models are often designed for rapid growth, and some relatively young companies have indeed achieved global scale. However, despite the visibility and importance of this phenomenon, analysis of scale and scalability remains underdeveloped in management literature. When it is addressed, analysis of this phenomenon is often over-influenced by arguments about economies of scale in production and distribution. To redress this omission, this paper draws on economic, organization, and technology management literature to provide a detailed examination of the sources of scaling in digital businesses. We propose three mechanisms by which digital business models attempt to gain scale: engaging both non-paying users and paying customers; organizing customer engagement to allow self-customization; and orchestrating networked value chains, such as platforms or multi-sided business models. Scaling conditions are discussed, and propositions developed and illustrated with examples of big data entrepreneurial firms.
We thank Professor Vincent Mangematin and Professor Charles Baden-Fuller, the editors of this volume, for their motivating and insightful comments and encouragement, and those of the two anonymous reviewers, We are grateful for the feedbacks received at EGOS Colloquium 2013 and 2014, as well as workshops held at Cass Business School, City University of London, and from colleagues at Cass, Grenoble École de Management and UEA, especially: Stefan Haefliger, Valerie Sabatier, and Alessandro Giudici. We also thank Jon Morgan of Paraphrase for his careful and insightful editing assistance.
Jin Zhang, J., Lichtenstein, Y. and Gander, J. (2015), "Designing Scalable Digital Business Models", Business Models and Modelling (Advances in Strategic Management, Vol. 33), Emerald Group Publishing Limited, pp. 241-277. https://doi.org/10.1108/S0742-332220150000033006Download as .RIS
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