information technology. The change happened hand–in–hand with new prospects for business, which, in the most radical statements, was said to have rewritten the basic rules of the economy (Kotha, 1998), also called the new Digital Economy. At the dawning of the major, indefinite e–commerce, discontinuity opened the field for local interpretation in those communities participating in the change. What is then a contemporary business model like? Here is an example of a viable business interpretation connected to urbanization, stated by an industrious entrepreneur:
"In the seventies, volumes of apartments were built in Finland as a part of urbanization, but the living environment was disregarded, which was where we came in with our new theme of modular playgrounds for children and young families," said the founder of the firm. The business model is a conceptual principle—a "theory" of the firm set by senior management on how to serve the market. It is analogous to a cook who has a recipe baking for a cake that someone will eat. Beyond defining the purpose, however, the business model also tells in a sense–making way how it comes about.7 What is then the connection between this ideology of business model and the ideology of business strategy? There is apparently a good deal of overlap, as the terms strategy and business model are frequently confused. Critics of the school of strategy point to the shortcomings of strategy analysis: it delivers parts of the whole rather than a synthesis of the whole. One interpretation is that the business model appears to be a reflection of greater freedom of movement, and the less predefined and given structural elements of the firm are not included. If the strategy smells of a plan of being competitive, the business model is more of a story of doing, and the effect of that doing new things. Researchers have found that the business model is effective and valuable in cases when the firms have a novelty–centered business model in combination with various market strategies, whereas it is not as evident in cases when firms have efficiency–centered business models.
Tallqvist, Torkel: Path Breaking Innovation,
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