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E-business Model Innovation and Capability Building

  • Ecology
  • Economics
  • Geography


WIDER Discussion Paper 2003 040 Copyright � Author(s) 2003 * School of Management and College of Computing Sciences, New Jersey Institute of Technology, Newark; NJ 07102, USA; email: [email protected], web site This is a revised version of the paper originally prepared for the UNU/WIDER Conference on the New Economy in Development, 10-11 May 2002, Helsinki. Discussion Paper No. 2003/40 E-business Model Innovation and Capability Building Stéphane Gagnon * April 2003 Abstract A firm’s business model describes the way in which it creates, delivers, and appropriates value. In the debate about the ongoing demise of several e-commerce ventures, only a few analysts have looked at the relative sanity of innovative e-business Models, relying mostly on static environmental variables and the inherent economic logic of each industry. Our study sheds new light on this debate by concentrating on a set of more complex factors, namely the relative difficulty to build new capabilities, whether by creating or acquiring them. We interviewed 60 e-commerce ventures between 2 and 3 years old, both independent and corporate ones, in order to measure their performance, the innovativeness of their e-business model, their obstacles to capability building, and their exploitable resource base. By performing cluster, discriminant, and regression analyses, we demonstrate that a number of typical obstacles to capability building can significantly affect the relative success or failure of innovative e-business models, but that a richer resource base may alleviate this relationship. We end with a discussion of the implications for the e-business model literature, and point out to some new directions to explain how various e-commerce firms, whether ‘pure-play’ or ‘click-and-mortar’, can successfully innovate despite rampant capability building difficulties. Keywords: e-commerce, business models, capability building JEL classification: L29, M13, O32 The World Institute for Developm

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