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How Business Models Evolve in Weak Institutional Environments: The Case of Jumia, the Amazon.Com of Africa

Author

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  • Augustine Awuah Peprah

    (Department of Business Administration, University of Professional Studies, LG 149 Accra, Accra, Ghana; Department of Global Business and Trade, Institute for International Business, Vienna University of Economics and Business, A-1020 Vienna, Austria)

  • Claudio Giachetti

    (Department of Management, Ca’ Foscari University of Venice, San Giobbe, 30121 Venice, Italy)

  • Marcus M. Larsen

    (Department of Strategy and Innovation, Copenhagen Business School, 2000 Frederiksberg, Denmark; Department of Strategy and Entrepreneurship, BI Norwegian Business School, 0484 Oslo, Norway)

  • Tazeeb S. Rajwani

    (Department of Strategy and International Business, University of Surrey, Guildford GU2 7XH, United Kingdom)

Abstract

We advance research on the antecedents of business model design by integrating institutional and imitation theories to explore how the business model of new ventures evolves in a weak institutional environment. Based on a case study of Jumia—an online retailing company in Africa established with the aim to emulate the success of Amazon.com—we propose a process model entitled “imitate-but-modify” that explains how business models evolve through four distinct phases (i.e., clarification, legitimacy, localization, and consolidation). In essence, this model explains how new ventures surrounded by considerable uncertainty deliberately seek to learn vicariously by imitating the business model template of successful firms. However, because of significant institutional voids, the ventures’ intentional imitation is progressively replaced by experiential learning that blends business model imitation with innovation.

Suggested Citation

  • Augustine Awuah Peprah & Claudio Giachetti & Marcus M. Larsen & Tazeeb S. Rajwani, 2022. "How Business Models Evolve in Weak Institutional Environments: The Case of Jumia, the Amazon.Com of Africa," Organization Science, INFORMS, vol. 33(1), pages 431-463, January.
    • Handle: RePEc:inm:ororsc:v:33:y:2022:i:1:p:431-463
    DOI: 10.1287/orsc.2021.1444
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