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Business model innovations for overcoming barriers in the base-of-the-pyramid market
Linköping University, Department of Management and Engineering, Business Administration. Linköping University, Faculty of Arts and Sciences. Eawag, Switzerland; Karlstad University, Sweden.
Linköping University, Department of Management and Engineering. Linköping University, Faculty of Arts and Sciences. Eawag, Switzerland.
Eawag, Switzerland; Karlstad University, Sweden.
2017 (English)In: Industry and Innovation, ISSN 1366-2716, E-ISSN 1469-8390, Vol. 24, no 5, p. 543-568Article in journal (Refereed) Published
Abstract [en]

Many barriers must be overcome when entering the base-of-the-pyramid (BoP) market. Firms facing these barriers need to innovate new business models and reinvent existing ones to suit the BoP context. While previous literature has focused on the innovations of particular components of business models in BoP markets, we investigate the reconfigurations in the business model components that underpin the successful business model innovations. This study is based on multiple case studies in the water sector that we carried out in several different countries. Our findings suggest five business model innovations: (a) design, (b) renewal, (c) expansion, (d) diversification and (e) replication. Each business model innovation is a specific response to the barriers met in the BoP market and requires consistent configuration between its various components (i.e. value proposition, value creation and profit equation). These findings add, in two important aspects, to the academic realm of the business model domain: by contributing to the debate of business models in BoP markets and by advancing the configurational view of business models.

Place, publisher, year, edition, pages
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD , 2017. Vol. 24, no 5, p. 543-568
Keywords [en]
Business models; business model innovations; base-of-the-pyramid markets; business model design; expansion; diversification; replication
National Category
Business Administration
Identifiers
URN: urn:nbn:se:liu:diva-138308DOI: 10.1080/13662716.2017.1310033ISI: 000400854600006OAI: oai:DiVA.org:liu-138308DiVA, id: diva2:1109041
Conference
DRUID Summer Conference
Note

Funding Agencies|Swiss Agency for Development and Cooperation

Available from: 2017-06-13 Created: 2017-06-13 Last updated: 2019-05-23
In thesis
1. Business Model Design for Social Goods and Services in Developing Economies
Open this publication in new window or tab >>Business Model Design for Social Goods and Services in Developing Economies
2019 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Over the past decade there have been increasing calls for alternative ways of tackling poverty problems in developing economies. Rather than aid or charity approaches that have traditionally dominated this area, an alternative line of discussion around base-of-the-pyramid approaches has emerged which emphasizes the role of innovation and pro-poor entrepreneurship. These developments are consequently reshaping our current views on organizational sectors, vulnerable communities, and sources of value creation.

Social businesses trailblazing these approaches however may find it difficult to provide customers at the very base of the economic pyramid with products and services in financially sustainable ways. Markets in remote rural areas are characterized by severe resource scarcity and pervasive institutional voids which make the pursuit of designing adequate value creation and appropriation mechanisms a challenging undertaking. Additionally, the commercialization of social goods further compounds these challenges, because hybrid missions demand the simultaneous generation of social and commercial value.

In this dissertation, I aim to shed light on these issues and examine how successful social businesses have emerged in the context of the unfolding pro-poor informal water market. This setting lent itself especially well to such study because the lack of safe and affordable water access prominently affects severely poor and secluded geographies to which sustainable solutions in profit, non-profit or governmental form have not yet emerged; yet successful solutions by social businesses have.

Building on the emergent research on social businesses, I suggest that these organizations established viable business ventures by designing a type of business model that caters to the needs of socially constrained base-of-the-pyramid communities despite the afore-mentioned managerial challenges. With a focus on theory development, I employ a multi-qualitative approach consisting of multiple case studies to develop a conceptual framework of these social business models and various propositions as to what may underpin their successful development.

The empirical foundation for these elaborations consists of five studies. These highlight distinct value creation and appropriation mechanisms as well as capabilities that social businesses employ to circumnavigate resource scarcity and institutional voids. Consequently, focusing on the design of value creation and appropriation mechanisms, we gain deeper insights as to why some social businesses may outperform other organizations. The thesis concludes with implications for base-of-the-pyramid, social entrepreneurship and business model literature, as well as avenues for future research. 

Abstract [sv]

Under det senaste decenniet har det blivit ökande uppmaningar till alternativa sätt att hantera fattigdomsproblem i utvecklingsekonomier. I stället för hjälp eller välgörenhetsmetoder som traditionellt dominerat detta område har en alternativ diskussionslinje kring “base-of-the-pyramid“ tillvägagångssätt uppstått som betonar rollen som innovation och fattig entreprenörskap. Denna utveckling förändrar följaktligen våranuvarande syn på organisationssektorer, utsatta samhällen och källor av värdeskapandet.

Sociala företag som leder till dessa tillvägagångssätt kan dock ha svårt att tillhandahålla kunder på grunden av ekonomins pyramid med varor och tjänster på ekonomiskt hållbara sätt. Marknader i avlägsna landsbygdsområden kännetecknas av svår bristande resursbrist och genomgripande institutionella tomrum som gör strävan att utforma adekvata värdeskapande och värdefångande mekanismer ett utmanande gåtagande. Dessutom förvärrar kommersialiseringen av sociala varor dessa utmaningar, eftersom hybriduppdrag kräver samtidig generering av socialt och kommersiellt värde.

I den här avhandlingen undersöker jag hur framgångsrika sociala företag har uppstått i samband med den outvecklade pro-fattiga vattenmarknaden. Jag föreslår att dessa sociala företag etablerat lönsamma affärsverksamheter genom att utforma en typ av affärsmodell som tillgodoser behoven hos socialt begränsade base-of-the-pyramid samhällen trots de ovan nämnda ledarskapsutmaningarna.

Med fokus på teoriutveckling använder jag en mångsidig kvalitativ forskningsansats som består av flera fallstudier för att utveckla ett konceptuellt ramverk för dessa sociala affärsmodeller och olika förslag till vad som kan stödja deras framgångsrika utveckling.

Den empiriska grunden för dessa utarbetningar består av fem studier. Dessa lyfter fram tydliga värdeskapande och värdefångande mekanismer samt kompetenser som sociala företag använder för att kringgå resursbrist och institutionella tomrum. Därför får vi djupare insikter om att vissa sociala företag kan överträffa andra organisationer, med fokus på utformningen av värdeskapande och värdefångande mekanismer.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2019. p. 114
Series
Linköping Studies in Arts and Sciences, ISSN 0282-9800 ; 772
National Category
Business Administration
Identifiers
urn:nbn:se:liu:diva-157018 (URN)10.3384/diss.diva-157018 (DOI)9789176850329 (ISBN)
Public defence
2019-06-10, ACAS, A-huset, Campus Valla, Linköping, 10:15 (English)
Opponent
Supervisors
Available from: 2019-05-23 Created: 2019-05-23 Last updated: 2019-06-04Bibliographically approved

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