Business models in global competition

Abstract

© 2017 Strategic Management Society. Research Summary: Multinational enterprises create and capture value through appropriate business models that fit both distinctive capabilities and dynamic markets. The key elements of a global business model include propositions for adding customer value and capturing a share of that value, methods to control, deploy, and utilize critical resources, and integrated processes that deliver value to target global customers. These factors explain the diversity in business models, with international competition in geographically dispersed markets further fortifying this diversity and complexity. This article demonstrates ways forward in theorizing about business models, applying these models in the global context, discussing capabilities and strategies necessary for value generation from a global business model, and relating the choice of model to the strategic context of the modern multinational firm. Managerial Summary: MNEs seek value in the global marketplace through distinctive business models, as is the case in other markets. Global markets add layers of complication, as the MNE needs both a global umbrella business model and a local business model for each product and international host market. Because the global business environment is highly dynamic and each host market offers unique contextual characteristics, simple and fixed business models are not feasible. This article offers insights into how aspects of the business model and the multinational firm must be adapted to locational characteristics.