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Managing the Value Appropriation Dilemma in Business Model Innovation

Author

Listed:
  • Yuliya Snihur

    (Department of Strategy, Innovation, and Entrepreneurship, Toulouse Business School, 31068 Toulouse, France;)

  • Christoph Zott

    (Department of Entrepreneurship, Instituto de Estudios Superiores de la Empresa (IESE) Business School, University of Navarra, 08034 Barcelona, Spain;)

  • Raphael (Raffi) Amit

    (Department of Management, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

Managers and designers of innovative business models that are enabled by emerging technologies need to build legitimacy with ecosystem participants. Yet increasing legitimacy within the ecosystem raises competitors’ incentives to imitate the business model innovators, thereby adversely affecting the innovators’ ability to appropriate value. We refer to this trade-off as the appropriation dilemma. We draw on institutional and resource-based perspectives to develop propositions about mitigating the appropriation dilemma and provide illustrations with a range of cases. Our theory development contributes to the technology management and business model innovation literatures by delineating how business model innovators can create value for all stakeholders and at the same time appropriate value through strategic business model design, a task that is particularly salient in the context of emerging technologies. We also strengthen the theoretical foundations of business model innovation research by grounding propositions about the strategic design of business models in resource-based theory and institutional theory.

Suggested Citation

  • Yuliya Snihur & Christoph Zott & Raphael (Raffi) Amit, 2021. "Managing the Value Appropriation Dilemma in Business Model Innovation," Strategy Science, INFORMS, vol. 6(1), pages 22-38, March.
    • Handle: RePEc:inm:orstsc:v:6:y:2021:i:1:p:22-38
    DOI: 10.1287/stsc.2020.0113
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    3. Vatankhah, Sanaz & Bamshad, Vahideh & Altinay, Levent & De Vita, Glauco, 2023. "Understanding business model development through the lens of complexity theory: Enablers and barriers," Journal of Business Research, Elsevier, vol. 155(PA).
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    5. Essen, Anna & Frishammar, Johan & Cenamor, Javier, 2023. "Entering non-platformized sectors: The Co-evolution of legitimacy debates and platform business models in digital health care," Technovation, Elsevier, vol. 121(C).

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