Innovating Business Models for Global Competition

This special issue is designed to advance research on business models in global competition. International firms, whether long-established MNEs or emerging market new ventures, create and capture value through business models that are undergoing a radical transformation worldwide. The quest for building global competitive advantages in today’s market landscapes, such as the permeating use of information technologies, increased reliance on emerging markets, heightened threats from low-cost rivals, and growing pressure to be locally resilient yet globally integrated, prompts business model innovations. Emerging opportunities, including those at the middle income level and bottom of the pyramid in developing countries, and new challenges, such as the economic slowdown in the developed world, put additional pressure on MNEs to innovate with their business models. While “innovating business models” suggests many potential research questions, this special issue particularly welcomes papers that span theoretical boundaries and disciplines to create new perspectives or frameworks that improve our understanding of the processes, forces, paths, evolution, outcomes or contextualized factors associated with developing, innovating, or executing business models for global competition by multinationals from developed or developing countries.

Background:

A business model describes a formula of unique value creation. It typically consists of a unique customer value proposition and profit-making scheme, as well as key resources and processes coupled together as a system to operationalize value creation. It often connects strategy, customers, resources, and processes to form a distinct value creation, delivery, and capture system. In global competition, the business model describes how the MNE creates value distinctively in the global marketplace by combining technology, capital, products, brands, brainpower, and value-creation activities that suit peculiarly well foreign or global market needs, giving rise to an advantage over its global rivals and sustained profitability. As business activities reach out internationally, a business model will have extended and enhanced ramifications for MNE performance at both global and local levels. Transnational operations also imply that business models may vary across different countries in which the MNE operates and competes. A successful profit formula in one host country may not be transferable to other host countries due to the disparate conditions surrounding the firm.

Research on business models in global competition has not yet been prominent in academic discourse. This is caused in part by the fact that MNEs have never faced the immense pressure they do today for innovating business models. In fact, 95% of senior executives of Western MNEs doubt that their companies have the right business or operational model for today’s shifting business world, according to a 2011 Accenture survey. Thus, there is a need to tap into this important topic and its underlying forces, processes, and consequences to create a richer field of global strategy.

Research Questions:

We focus exclusively on the global relevance or global process of business models adopted by MNEs from either developed or developing countries. In concert with the mission of GSJ, we seek papers that are multidisciplinary in scope and interdisciplinary in content and methodology (empirical substantiation preferred) and are cutting-edge research, breaking new conceptual ground and addressing real-world phenomena regarding developing and innovating business models for winning global competition. Examples of topics that fall under the domain of this special issue, which are illustrative at best and are not intended to define the boundaries of this special issue, include:

By virtue of their global spanning capabilities and their need to compete in multiple markets, there are more opportunities as well as more complexities for MNEs than for domestic firms in innovating business models. How do MNEs develop business models to capitalize on the global scale, global network, and global reach of their cross-border operations? What major factors (local, regional or global) should MNEs consider in designing and executing a complicated business model system? How do liabilities of foreignness, the advantages of global connectivity, and spatial transferability play their part in shaping the creation of business models designed to achieve sustained returns?

After several decades of operating in foreign emerging markets, most Western MNEs have become "strategic insiders" who view their large-scale operations in these markets as key to their overall global success. Increasingly dependent on these markets and fiercely competing against local companies that are more cost effective and faster in product development, MNEs are propelled to develop new business models for their growth. How do they depart or evolve from their old business models? What are compelling forces that spark MNEs to revamp existing business models? How do competition and cooperation with local firms affect an MNE’s new business model? How do new business models (e.g., reverse innovation, multi-tier marketing, co-evolution, adaptive diversification) used by Western MNEs actually work in emerging markets?

Business models are more global than ever before because of the growing integration of the world economy. At the same time, offshoring and outsourcing are changing the nature of the firm, producing unprecedented international relocation of economic activity. What are the specific conditions at the global, regional, national, industry- and firm-levels that make MNEs shift their dominant business models? In what ways do MNEs build a virtuous cycle between existing strengths and new business models and between their business models and new competitive advantages? How do institutional pressures in the environment shape or reshape business model innovation? Why do some MNEs prefer the use of a similar business model in many foreign markets while other MNEs opt for different business models for different markets?

Unlike domestically run firms, MNEs have many more global-level factors to think through when innovating business models. Will business model creation or innovation depend on an MNE’s international strategies (multi-domestic, transnational, and global)? How do host country contextualized forces influence business model creation and evolution? How do MNE business models coevolve with shifting conditions of macro- and micro-business environments surrounding them? How successful are these evolving models (many business models do fail)?

Deadline and Submission Instructions

The deadline for submission of papers is December 31, 2014. All manuscripts will be reviewed as a cohort for this special issue. All submissions will go through the GSJ regular double-blind review process and follow the standard norms and processes that have been established by the journal (see gsj.strategicmanagement.net).

For more information about this call for papers, please contact the GSJ Managing Editor, Lois Gast (lgast@wiley.com) or the Special Issue Guest Editors:

Yadong Luo, University of Miami (yadong@miami.edu)

Peter Buckley, University of Leeds (pjb@lubs.leeds.ac.uk)

Henry Yeung, National University of Singapore (henryyeung@nus.edu.sg)