Business Models as Enablers of Ecosystemic Interaction: A Dynamic Capability Perspective

Business Models as Enablers of Ecosystemic Interaction: A Dynamic Capability Perspective

Julius Francis Gomes (University of Oulu, Oulu, Finland), Marika Iivari (University of Oulu, Oulu, Finland), Minna Pikkarainen (University of Oulu, Oulu, Finland) and Petri Ahokangas (University of Oulu, Oulu, Finland)
DOI: 10.4018/IJSESD.2018070101

Abstract

A business ecosystem supports relationships between its stakeholders. Although it has been recognized that ecosystem stakeholders neither solely compete, nor collaborate, but rather co-develop their capabilities, empirically-based research evidence on this interactive co-development in ecosystems remains scarce. The interaction among ecosystem stakeholders is approached from the business model perspective. Accordingly, this article builds on business model literature, and on empirical data gathered within an emerging connected health ecosystem. This article conceptualizes business models as dynamic capabilities that enable ecosystemic and symbiotic interaction through opportunity exploration and exploitation, value creation and capture, and, advantage exploration and exploitation. This article argues that co-developing business models through sensing, seizing and transforming is a key enabler for ecosystem's success and sustainability.
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Introduction

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise more effectively have prevailed – Charles Darwin – The Descent of Man.

In more than 25 years of research on business ecosystems, most of the studies have explained the concept from definitional and descriptive viewpoints, and why business complexity is viewed analogous to ‘biological’ ecosystems (Moore, 1993; Iansiti & Levien, 2004; Adner & Kapoor, 2010; Mäkinen & Dedehayir, 2012). Moore (1993) pointed out parallel dynamics with natural and business ecosystems, as both are formed partly intentionally, and partly accidentally. A business ecosystem is defined as “an economic community supported by a foundation of interacting organizations and individuals - that is, the organisms of the business world” (Moore 1993). Business ecosystems can be viewed as organizations that create value by combining their skills and assets, characterized by non-linear value creation processes, where groups of companies deliver integrated solutions for customers (Clarysse et al., 2014).

Just like biological ecosystems, business ecosystems are characterized by high levels of interdependency, complexity, collaboration and co-evolution (Moore, 1993; Iansiti & Levien, 2004). The kind of sophisticated market dynamism that takes place in business ecosystems, and continued resource evolution, contributes to temporary competitive advantages (Ahokangas et al., 2010). Organizations can solidify those temporary competitive advantages through managerial selection, cooperation and market competition. As opposed to the resource-based view that focuses on combining valuable, rare, inimitable and non-substitutable resources and capabilities to create sustainable competitive advantages (Barney, 1991), temporary competitive advantages are rooted in dynamic capabilities (Teece, 2012). Dynamic capabilities are high-level strategic competencies that are required to manage resources in addressing turbulent environmental shifts. Business ecosystem members ought to co-evolve symbiotically through simultaneous collaboration and competition to ensure the existence of the system as a whole. Yet research evidence on how the co-development of capabilities occurs remain nascent. This paper contributes to this gap in literature by theorizing how organizations in business ecosystems can co-develop and co-evolve by using business models as a dynamic capability.

The importance of business relationships and firm competitiveness has been recognized in many studies (Amit & Zott, 2001; Gadde & Håkansson, 2001). However, the perspective of business models as dynamic capabilities is only emerging (Teece, 2017; Juntunen, 2017). Scholarly works focusing on business ecosystems through the lens of business models are also scant but advancing (Gomes et al., 2017; Iivari et al., 2016; Jansson et al., 2014). Teece (2017) points out the interdependence between business models, dynamic capabilities and strategy. Business models have increasingly been considered as a “boundary-spanning unit of analysis” (Zott et al., 2011). A business ecosystem can, therefore, be viewed as a network of multiple business models (Jansson et al., 2014), where companies seek bundled or hybrid business models to combine or aggregate services from different parts of the ecosystem (Iivari et al., 2016).

Looking at ecosystemic contexts from a business model perspective is somewhat recent since business models have been mainly examined as a firm-specific phenomenon (van der Borgh et al. 2012). Thus, there is not yet enough understanding of the dynamics of the business ecosystems (Alajoutsijärvi et al., 1999; Håkansson & Waluszewski, 2002; Lundgren, 1991) or capabilities needed in the development of businesses (Juntunen, 2005). In line with Teece (2017), in this study, business models are therefore conceptualized (Teece, 2010;Chesbrough & Rosenbloom, 2002) as a dynamic capability (Teece, 2007, 2017) that enables and fosters the interaction (Zott & Amit, 2008) in business ecosystems.

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