“Making Markets: The Practice of Business Models”
The idea for this research grew from observations in the business press. The press is replete with stories suggesting that the way firms develop business models (that interact with and shape markets) is likely to affect their ability to compete internationally. Take for example, Nintendo, producer of the Wii game console. This disruptive technology has emerged from the development of a new business model and the reshaping of markets and, some business analysts claim, the entire ‘gaming industry’.
The stagnant US and Japanese games markets of 2003, together with escalating development costs of state-of-the-art game consoles, forced Nintendo to question their target market. The high skill levels of gamers required investments of time and money from customers. Nintendo reshaped the market to leverage their international competitiveness. By 2007 Japanese women had overtaken men to become the biggest users of Nintendo in a seismic shift that the company said would “transform the video games industry” (Lewis, 2007).
Despite such observations we know very little about the micro, firm-level practices that underpin business models. I want to know managers ‘do’ in order to conceptualise and innovate successful business models? Government policy initiatives have done a lot to promote macro-economic management and provide a helpful regulatory environment for businesses to prosper. but, the key to improvements in firm productivity probably lies in understanding what goes on inside productivity processes and how this links to the external macro environment. We need to understand more about the process of ‘translating’ a firm’s market vision and business strategy encapsulated in their business model into localised, contextualised and enacted market practices – what do I do, now, for my firm, in this market? The aim of my research is to explore and identify promising practices that enable managers to make markets through the development and innovation of business models.
One of the issues that interests me here is whether the business models themselves can be classed as disruptive? It is an especially interesting historical question, which brings to mind models such as travel agencies in 19th and of course the challenge of online booking etc to the conventional travel agency model in 20th/21st century.
This is a great question. I guess it relates back to at what point you think the model exists and for whom. There are many sectors that this is a big question for at the moment. I suppose the most striking is banking, but also sectors related directly to green issues such as power supply – how do we develop business models for the future for firms that need to make money from selling less? In this sense I guess it is the ‘issue’ of greeness that is disruptive and the business model becomes the artefact of disruptiveness – an express of what disruption needs to/is likely to take place.