In the article it is asserted that business model innovation potential has not yet been fully released first because of a lack of business model definition and a consistent methodological framework, second because, on a more general plan, the whole system of assumptions on which innovation activity of this kind has been based possibly needs re-evaluation. It is argued that a change of theoretical foundation is needed because of systemic inconsistencies which impede present approaches application. It is assumed that difficulties arise due to peculiarities of mainstream economics framework upon which these approaches have implicitly been built. While authors of neoclassical approaches admit outside factors influence on the business model, these factors remain conceptually isolated from the business model. To overcome this problem there has been suggested a framework for business model innovation based on the evolutionary economic theory. The evolutionary approach to business model innovation is characterised by focus on processes of long-term change and economic agents cause-effect relationship. It is being realised by reference to the evolutionary process that has moulded stable patterns of behaviour of companies on a chosen market. By this reference a trajectory of development of value perception and principles of value creation or business models can be traced and understood, since relationship between routines, value, and business models are mutually dependent. Generalised principles of value creation or basic business models of a market in question are to be adjusted to particular circumstances of an
Table of Contents
Introduction
Sources and Implications of the Evolutionary Approach to Business Model Innovation
Key Concepts of the Evolutionary Approach to Business Model Innovation
Balanced development
Value
Innovation
Routine
The Evolutionary Approach to Business Model Innovation
Business Model Innovation in the High-End Apparel Industry
Conclusion
Objectives and Thematic Focus
This work aims to overcome the limitations of neoclassical approaches to business model innovation by proposing a new methodological framework rooted in evolutionary economic theory. The research focuses on integrating external environmental factors and systemic relationships into the business model concept to better facilitate organizational adaptation and long-term value creation.
- The theoretical shift from neoclassical to evolutionary economic foundations.
- Defining business models as dynamic systems for value creation rather than static snapshots.
- The impact of national culture (mental programs) on organizational structure and strategy.
- The role of industrial routines and historical trajectories in shaping business model development.
- Practical application of the framework within the global high-end apparel industry.
Excerpt from the Book
Balanced development
The mainstream theory substantiates the paradigm of continuous economics growth. Economic growth is “our ability to produce more of the things that provide for our material well-being” (Stiglitz & Walsh, 1993/2006, p. 193). The attitude persists notwithstanding the fact that “infinite growth in a finite environment is an obvious impossibility” (Schumacher, 1973/2001, p. 33) or as Gandhi put it “earth provides enough to satisfy every man’s need, but not for every man’s greed” (as cited in Schumacher, 1973/2001, p. 20).
The evolutionary economics is rather about balanced development. To illustrate the idea let us consider an example from history. Contemporary followers of the evolutionary economic theory trace its origin from the evolutionary theory in biology. In its turn, the father of this theory, Darwin, as it is well known, got a stimulus to develop his ideas from a work on economics. The fact has been extensively described at a Milan exhibition dedicated to the bicentennial anniversary of Darwin and the 150 years anniversary since the publication of The Origin of the Species.
Summary of Chapters
Introduction: This chapter highlights the lack of a consistent methodological framework for business model innovation and outlines the need for a new theoretical foundation based on evolutionary theory.
Sources and Implications of the Evolutionary Approach to Business Model Innovation: It discusses the integration of Russian economic thought with contemporary evolutionary economic theories to address the limitations of neoclassical models.
Key Concepts of the Evolutionary Approach to Business Model Innovation: This section defines core terms such as balanced development, value, innovation, and routine within the evolutionary framework.
The Evolutionary Approach to Business Model Innovation: This chapter introduces the practical instrument for designing and adjusting business models based on market routines and value trajectories.
Business Model Innovation in the High-End Apparel Industry: It provides an empirical application of the framework, comparing luxury and premium business models in the global apparel market.
Conclusion: The conclusion synthesizes the findings and reaffirms the universal applicability of the proposed evolutionary framework for managing business model innovation.
Keywords
business model, innovation, evolutionary economic theory, balanced development, value creation, high-end apparel, routine, organizational culture, mental program, competitive strategy, neoclassical economics, industrial patterns, market dynamics, adaptation, value chain.
Frequently Asked Questions
What is the core focus of this research?
The research addresses the current failure of business model innovation methodologies to account for external environmental factors and proposes a more robust framework based on evolutionary economic theory.
What are the central themes of the work?
The central themes include the transition from neoclassical to evolutionary theory, the systemic view of a firm, the influence of national culture on business structures, and the historical analysis of industrial routines.
What is the primary objective of the proposed framework?
The objective is to provide practitioners with a methodological instrument to build or improve business models by analyzing market trajectories rather than viewing companies as static, isolated entities.
Which scientific methodology is utilized?
The author employs an inductive, empirical research methodology, drawing upon historical observations and findings from the global high-end apparel industry.
What does the main body cover?
The main body covers the theoretical foundations of evolutionary economics, key concepts like 'routines' and 'value', and a detailed application of these concepts within the luxury and premium apparel sectors.
Which keywords best characterize this work?
The work is best characterized by terms such as business model innovation, evolutionary theory, value creation, organizational culture, and balanced development.
How does this framework integrate national culture?
The framework utilizes G. Hofstede's concept of "mental programs" to analyze how a country's culture impacts an organization's structure, strategy, and reactions to market stimuli.
How are 'luxury' and 'premium' models differentiated?
They are differentiated by their target segments, value propositions (prestige vs. performance), organizational structures (pyramid vs. participative), and approaches to value chain management.
What is the role of 'routines' in this model?
Routines are viewed as stable patterns of organizational behavior; innovation is defined as the process of changing these routines to adapt to evolving market conditions.
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- MA Ekaterina G. Navalnaya (Autor:in), 2014, An evolutionary approach to business model innovation, München, GRIN Verlag, https://www.grin.com/document/281957
