Liliana Doganova and Marie Renault (2009), “What do business models do? Innovation devices in technology entrepreneurship,” Research Policy 38(10): 1559-1570
The one-page presentation should not paraphrase the chosen text, but rather analyze and discuss its contribution: what does the text teach us and why is this interesting? The main source will be the article, but you need to put it in perspective with other relevant academic references.
Critical Presentation and Summary
This paper offers a critical presentation and a summary of the article by Doganova and Eyquem-Renault (2009) that focuses on the role of business models in the innovation process. The research involved a case study of Koala, a new venture that was founded in 2006. The Koala’s business model was developed with the objective of “commercializing a technology based on an algorithm that allows the processing of data incoming from vehicles to calculate travel times” (Doganova and Eyquem-Renault, 2009). The researchers drew insights through narratives and calculative aspects of the Koala’s business model. The insights were developed by examining a series of documents that offered information about the business model. The choice of Koala as the case study was appropriate for Doganova and Eyquem-Renault’s (2009) research, considering that Teece (2010) notes that most of the technological innovations often fail commercially, while startups and SMEs lack the tools to develop appropriate business models. Additionally, a case study was desirable for understanding open innovation (Almirall & Casadesus-Masanell, 2010). The availability of substantial information about Koala offers an in-depth understanding of innovation and business. The analysis by Doganova and Eyquem-Renault (2009) view a business model like “a material object, as a scale model of the new venture, instead of treating it as a more or less faithful description of a reality beyond itself.” According to Komulainen et al. (2006), there is a need to focus on the specifics to facilitate an understanding of the complex inter-organizational and individual business networks as well as facilitate empirical elaborations of the business model.
Doganova and Eyquem-Renault (2009) suggest that approaching business models as demonstrations rather than descriptions offers an opportunity to gain insights that are beyond their truthfulness and usefulness. Notably, there is a consensus among researchers that business models should effectively communicate to the audience (Brennan & Merkl-Davies, 2018; Onar & Ustundag, 2018; Beynon-Davies, 2018), which in the context of Koala was achieved by demonstrations that included scaling models (Doganova and Eyquem-Renault, 2009). According to Chesbrough and Rosenbloom (2002), there is a need for companies to develop business models that can help in realizing the value of novel technologies in uncertain contexts. Doganova and Eyquem-Renault (2009) allude that in Koala’s case, the circulation of business models implies that entrepreneurs do not start from scratch. They argue that it is difficult to innovate both technologically and in developing the business model, which makes them create a reference to the existing one. These insights are consistent with the sentiments expressed by Chiaroni, Chiesa, and Frattini (2009) in the context of the pharmaceutical industry, which has experienced an evolution of the business models due to the impact of the advancement of biotechnology through an open innovation paradigm. From this perspective, the findings offered by Doganova and Eyquem-Renault (2009) highlight that the nature of innovation in a particular line of business can influence change in how business models are developed and implemented. It also highlights the need for entrepreneurs to be creative and up-to-date with not only the changes in innovation but also how mature businesses and startups use business models to foster organizational success. Additionally, the insights emerging from Doganova and Eyquem-Renault’s (2009) research are consistent with the notion that business models are supposed to articulate the logic and draws attention on the major components of how the system interacts and the processes involved in gaining success in developing an effective model and implementing it into a viable business (Magretta 2002; Zott, Amit, & Massa, 2010). Conclusively, the article offers crucial information relating to the importance of business models in innovation because innovation is a paramount aspect for business survival in a competitive environment.
References
Almirall, E., & Casadesus-Masanell, R. (2010). Open versus closed innovation: A model of discovery and divergence. Academy of management review, 35(1), 27-47.
Beynon-Davies, P. (2018). Characterizing business models for digital business through patterns. International Journal of Electronic Commerce, 22(1), 98-124.
Brennan, N. M., & Merkl-Davies, D. M. (2018). Do firms effectively communicate with financial stakeholders? A conceptual model of corporate communication in a capital market context. Accounting and Business Research, 48(5), 553-577.
Chiaroni, D., Chiesa, V., & Frattini, F. (2009). Investigating the adoption of open innovation in the bio‐pharmaceutical industry. European Journal of Innovation Management.
Doganova, L., & Eyquem-Renault, M. (2009). What do business models do?: Innovation devices in technology entrepreneurship. Research Policy, 38(10), 1559-1570.
Komulainen, H., Mainela, T., Sinisalo, J., Tahtinen, J., & Ulkuniemi, P. (2006). Business model scenarios in mobile advertising. International Journal of Internet Marketing and Advertising, 3(3), 254-270.
Magretta, J. (2002). Why business models matter Harvard Business School Boston. Harvard Business Review 2002, 2002: 33–36
Onar, S. C., & Ustundag, A. (2018). Smart and Connected Product Business Models. In Industry 4.0: Managing The Digital Transformation (pp. 25-41). Springer, Cham.
Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2-3), 172-194.
Zott, C., Amit, R., & Massa, L. (2010). The business model: Theoretical roots, recent developments, and future research. IESE Research Papers, 3(4), 1-43.
