Business Models and the Multinational Firm

The concept of the “business model” is increasingly popular in the strategy literature as a way to outline an integrated approach to value creation, delivery, capture, and allocation. It addresses firm strategy but also the resources and capabilities needed to support that strategy and the structure needed to operationalize it. The global marketplace challenges our concepts of all parts of the business model, yet business-model concepts tend not to consider the effects of location or geographical dispersion on the viability of business models. The value of resources and capabilities to customer needs vary from country to country, forcing strategies to adapt. Institutional factors limit structural possibilities in global, regional, and national markets. Currency values, tax regulations, consumer protection and the like make capturing value for the firm and its network much more than simply designing profit margins into pricing structures. This paper offers an integrated but modular approach to the business model, applying concepts from international business studies to show that the very concept of business models as well as each part of the puzzle must be adapted to deal with much greater complexity in the relationships between the environment and the firm in the globalizing marketplace.