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Business model innovation and sources of value creation in low-income markets
Article first published online: 17 JAN 2011
DOI: 10.1057/emr.2010.16
2010 European Academy of Management (EURAM)
1740-4762/asset/cover.gif?v=1&s=e1b6ae3f9a14bf9b0067d85831c95882ebe4caca "European Management Review")
Additional Information
How to Cite
Sánchez, P. and Ricart, J. E. (2010), Business model innovation and sources of value creation in low-income markets. European Management Review, 7: 138–154. doi: 10.1057/emr.2010.16
Publication History
- Issue published online: 17 JAN 2011
- Article first published online: 17 JAN 2011
- Abstract
- References
- Cited By
Keywords:
- business models;
- low-income markets;
- base of the pyramid;
- innovation;
- international strategy
Abstract
We explore different business ventures in low-income markets in order to understand the factors influencing business model innovation in this context. Grounded in the rich data obtained from multiple case study analyses and in the received theory in strategy in low-income markets and business models, we identified a set of contingency factors that permitted us to distinguish between isolated and interactive business models. Isolated business models widen its entrance into new markets by leveraging firm's current resources and capabilities for taking advantage of existing opportunities. Interactive business models require a firm to combine, integrate and leverage both internal resources with ecosystem's capabilities to create new business opportunities. Finally, we discuss the main implications on value creation from these business models.