The Many Sides of Business Model Innovation

Abstract

I enjoyed reading the paper ‘Business model innovation and experimentation in transforming economies: ByteDance and TikTok’ (Ma & Hu, 2021) and the response by Li (forthcoming). The main point of Ma and Hu’s paper was that companies in emerging economies can experiment with new business models in their home markets and then bring some of that experimentation into other markets. It is sort of the ‘reverse innovation’ (e.g., Govindarajan & Euchner, 2012) taken from the product space and applied to new business models. The role of technology in this story is to enable new services originally targeting a different demographic with a different medium (cf., Amit, Snihur, & Zott, 2021). Li (forthcoming) has a problem with this interpretation of the ByteDance case. He argues that ByteDance had very little business model innovation (BMI) but rather took a savvy approach to internationalization. Li argues that the role of technology in the ByteDance case is more of a means for reducing ‘paradoxical’ tensions between local responsiveness and global integration, i.e., for enabling not business model innovation but rather ‘transnational’ strategies as developed by Bartlett and Ghoshal (1989). What does it take for a company to be successful over the long term?We know that it requires a great strategy, excellent operations, financial controls, effective marketing, a solid business model, routines for ‘future-proofing’, and so forth. There are many elements that need to interact for company success. So it is natural that when we see a successful company, different people, depending on their disciplinary background, can attribute different elements as the ‘main reason’ why a company is successful. Furthermore, what does ‘business model innovation’ actually mean (cf., Massa & Tucci, 2021)? There have been many different definitions published over the years (see Foss & Saebi, 2017 for a more complete discussion). The lowest bar probably addresses the question: has any one conceptual component or element of a business model (cf., Abdelkafi, Makhotin, & Posselt, 2013; Afuah &