Essays on Business Model Innovation in the Private Equity Industry

This dissertation comprises three essays on adoption of business model innovations. The essays contribute to the strategy literature (in particular, the growing literature on business models) by explaining which firm characteristics determine heterogeneity in the adoption of new business models between firms, what are the most viable modes of adoption and the impact of this adoption on firm performance (in particular, stock market performance).

The central idea that a firm’s business model, i.e., core activities through which a firm creates and captures value, can be a source of competitive advantage is well established and associated with prominent streams of research across disciplines such as strategy, entrepreneurship, marketing and operations. Classic business cases like Dell’s advantage over HP in inventory turnover, Walmart’s successful foray into e-commerce or “Operation Flood” led by visionary social entrepreneur Verghese Kurien that revolutionized dairy distribution in India in the 1970s can all be attributed to business model transformations of some type or the other. More recently, technology (particularly digital technology) has provided fresh opportunity and impetus to firms to develop and adopt novel business models that create value for their customers although they may be serving fundamental and conventional needs (Amazon, Uber, AirBnB; the list is long). The sheer scale and speed of these transformations have brought “business models” and “business model innovations” to the forefront of strategy discourse (Bock and George, 2018). Management scholars have recognized the need to formalize these constructs and understand the precise mechanisms that connect business models to a firm’s strategy and outcomes (see edited volume by Foss and Saebi, 2015).