رقابت مدل های کسب و کار، ایجاد ارزش و تخصیص در فوتبال انگلیسی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|7758||2011||18 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Long Range Planning, Available online 23 November 2011
This article integrates the business model concept with an understanding of industry recipes to show how competing business models can co-exist in a competitive market. Drawing on data from the English Premier League, we show that alternative models – based on the acquisition of talent on one dimension and the internal development of shared team experience on the other – lead to differing value creation and value capture outcomes. Drawing on the time series nature of our data, we also show that transitioning between business models can involve a decline in performance (which may be temporary), and draw some implications for managers faced with the challenge of changing their business models.
The central strategy problem for managers is relatively simple: how to formulate and implement strategies that create value for customers and capture profits for the firm. There are a multitude of possible resource and capability configurations a firm can choose to create value, but also many uncertainties that can prevent them from converting these configurations into products that create value for customers and thus profits for the firm. Industry recipes and business models are complementary concepts that can assist managers in understanding the range of resource and capability configurations and uncertainties they face in selecting a strategy with a realistic probability of generating value for customers and capturing profits for their firm. The essence of an industry recipe, as espoused by Spender, is as “the shared knowledge base that those socialized into an industry take as familiar professional common sense” which can be used as aids in the management of strategic uncertainties (Spender, 1989: 63). A challenge in researching industry recipes is that the process by which an industry recipe is identified and the links between resource configuration options, value creation for customers and value capture for the firm is not only particular to the industry and firm, but also must be measured qualitatively to account for the unique perspectives of both managers and the industry. While in their broadest form recipes are shared, taken for granted understandings of the industry, in practice they are overlaid by the specific assumptions and practices of individual decision makers and firm contexts, thus moving the focus from general guidelines towards the challenge noted above. Teece (2010) notes that one of the key contributions of the business model approach is that it offers clear guidance as to “how a firm delivers value to customers and converts payment into profit” a point captured by Baden-Fuller and Morgan’s (2010) business models definitions table in their overview of the contributions to this journal’s Business Models Special Issue. In this article we outline the essential recipe that applies to English Premiership Football industry – which we term a ‘talent-based recipe’ – and use the business model approach to define four business model types based on two value creating resources and capabilities that are central to such industry recipes – the talent of the team’s players and the shared team experience they accumulate. While Teece (2010) argues that it is sufficient for a business model to focus on what resources and capabilities are associated with the creation and capture of value, this article is motivated by the problem that prior research in the talent war literature has told us little about the different resource and capability configurations of talent and accumulated shared team experience that can create both value for customers and capture profits for firms. Firms in the same industry differentiate themselves from each other, so not all will have the same strategy and associated business model, but it is important that they know what kinds of business model configurations are possible within an industry recipe, and more importantly whether and how firms can change between models. Must a firm choose a single business model, which cannot be changed afterwards, or can it evolve one successful business model configuration into another? The empirical question we seek to explore in this article is whether more than one stable business model configuration can exist within an industry. We consider the stability of a business model in terms of its ability to generate both value for the customer and adequate financial returns for the firm. If a firm’s business model cannot generate value for its customers, the stability of that typology over time must be questionable – will they continue to support such a firm with their custom? Nor can it regarded as being stable over the long term if it cannot deliver a financial return for the firm relative to the industry benchmark. Our research demonstrates that some resource and capability configurations of talent and accumulated shared team experience are associated with both success on the field of play (which we see as being akin to value creation for customers) and with higher financial performance relative to the industry for the firm (i.e., value capture). We find it is possible for firms to move between business models, but that doing so involves shifting via an uncertain transitional state business model – a ‘valley of death’ – where there is likely to be a precipitous decline in the profits captured by the firm. If the firm succeeds in managing these risks, then it can move onwards to another stable business model which is likely to increase value creation for its customers, but not increase profitability for the firm. We first offer an overview of the business model concept and then develop four business model typologies drawing on the ‘talent-based’ industry recipe, which we test using a decade of data recording the performance of English Premiership Football teams.
نتیجه گیری انگلیسی
This article seeks to fill a gap in the literature’s conceptual understanding of business models by developing four stable business model types based upon the key dimensions of a talent-based industry recipe – team talent and accumulated shared team experience. Our conceptual model predicted four stable business model configurations, and our analysis supported the idea that more than one stable business model configuration is possible within an industry, although not all four models were found to be as stable as predicted by theory. We can see that maintaining high levels of accumulated shared team experience translates into the best financial performance for firms in this industry with differing levels of talent. If a club’s owners are not concerned about its team’s on-field performance (or value creation for the customer) then a squad of experienced B-class players generates as good a financial return as a team of experienced A-class players – but if they care about both types of performance, the A players, experienced business model type gives highest outcomes. A challenge for talent-based industry recipes is that it is not possible in the long term for a club always to be able to maintain high levels of both talent and experience – as new players replace ageing team members shared team experience will inevitably suffer a temporary decline. Thus, on reflection, the two inexperienced business models can be considered as transitional states between two stable business models, which deliver higher financial returns (though not always higher value creation in the form of league points). Movement between inexperienced and experienced business models is a strategic choice for club management, involving navigating the performance decline – or ‘valley of death’ – of the A talent inexperienced business model. (The same temporary decline in shared team experience and performance dip is like to accompany replacing aging with young talent.) So a key uncertainty in this talent-based industry recipe appears to be the transition between different states of accumulated shared team experience, with the insecurity about whether or not the club can return to a stable A or B talent experienced business model. There is a clear risk that such transitions might result in a precipitous decline, either in value creation for customers (on-field performance – see Figure 3), or value appropriation for the firm (as in Figure 4). We can see that the uncertainty is greatest in value appropriation considerations, as all clubs moving away from an experienced business model will suffer substantial declines in value appropriation (see again Figure 4). Transitioning from B talent, experienced to B talent, inexperienced has limited impact upon value creation (as per Figure 3) and the negative impact of such a transition on value appropriation is also less than when the club makes the strategic choice to transition from the stable B talent, experienced business model to an A talent, experienced business model. The firm will need to buy in new talent, temporarily driving down experience, for the uncertain long term benefit of both high value creation and value capture. Until the new squad gains mutual playing experience, the club must pass through the costly transitional state of the A talent, inexperienced model, where the costs of its investments have not yet produced gains in either value creation or appropriation – so which can really seem like a ‘valley of death’. Our results show empirically that multiple stable business models can co-exist within a talent-based industry recipe, and that the choice of any specific business model does not lead to superior value creation and appropriation simultaneously. The different drivers of alternative business models result in trade-offs between strategies that can increase either – and (as noted earlier) some business models may be sequentially interdependent. By focusing on value creation narratives and subjecting them to a profit test we have demonstrated that the business models concept has a utility beyond the traditional – industry transformation – context of this literature. Furthermore, we demonstrate that combining the business model perspective with the notion of industry recipes provides a practical method by which the value creation and appropriation implications of major industry recipe dimensions can be explored. Understanding the underlying business model mechanisms of value creation and appropriation can lead to a range of profitable outcomes for firms that can use such knowledge to develop their business strategies. An unexpected result of this analysis was that the B talent business models resulted in higher value appropriation irrespective of the level of internal experience. B talent business models firms incur much lower talent acquisition costs than do A talent business models, which can result in earlier profitability. However, such clubs risk being relegated to the largely unprofitable Championship league resulting in long term unprofitability. The club adopting the A talent, high shared team experience business model faces the twin challenges of integrating talent internally and the risk of value destruction from hiring stars through external labour markets. Stars ought to raise performance (in terms of on-field performance translating into increased revenues) over and above the cost of their contracts: but, of course, there is a risk that this may not occur. However, if such clubs survive the transitional business model (the ‘valley of death’) then the potential reward is high task performance and moderate value appropriation, with the opportunity of winning entry to lucrative European football competitions. Hence, in selecting a talent-based business model, club managements need to be mindful of the risks and rewards of each generic business model and be realistic in appraising their abilities to manage the individual components of each business model to achieve the desired levels of competitive task performance and financial performance. The relatively low amount of movement we noted between the various generic models also highlights the challenges for firms in this environment. Competing for the highest talent in the external labour market is likely to require a significant change in the club’s financial resources: in the absence of some significant structural changes (e.g. in ownership) playing this game may be problematic. The recent history of Manchester City F. C. is instructive here: the club was purchased by the Abu Dhabi United Group in January 2009 and has since taken spending on talent to unprecedented levels (over £100 million during Summer 2009 alone) to compete effectively in the market for A class talent. And, although we demonstrate the role and the importance of developing accumulated shared team experience as key to value appropriation, the competitive pressures associated with league success mean that the player and managerial stability required can be difficult to achieve. Even the most successful manager in Premier League history to date – Manchester United’s Sir Alex Ferguson – was famously just one game away from being dismissed (in the 1990 season) after two years at the club (Ferguson, 1999) – but he avoided the sack and the stability provided by his managerial longevity has since allowed for the successful development of younger players and integration of them and more established stars into successive Manchester United squads. To this end, we have clearly elucidated the building blocks of both a talent-based industry recipe – talent and accumulated shared team experience – and of its associated business models, by understanding the drivers of value creation for customers and value appropriation for clubs. Combining these concepts brings new insights to considerations of talent-based industry recipes. We have demonstrated – both conceptually and empirically – that there are issues beyond the traditional assumption that acquisition of star talent is associated with improved task performance, and that this perspective is an oversimplification which can yield misleading implications for managerial practice. Our framework demonstrates that acquiring high quality talent from the external labour market is only associated with improved task performance where firm specific team experience is also developed. The important implication for both research and practice of these conceptual value creation models, in the context of their implementation within a talent-based industry recipe, is to make explicit the interplay between the external acquisition of talent and the internal development of team experience. In summary, a key implication of this article is that the business model perspective facilitates clearer understanding of the process of value creation and appropriation in talent -based industry recipes, and that manager need to use this knowledge when deciding their firm’s underlying business model. Our study’s recognition that the acquisition of high potential talent is not a sufficient condition for value creation or value appropriation in this setting is important – a central strategic concern for Premier league clubs is the selection of a manager with expertise in both the realistic valuation of the talent available on the external market and the capabilities to manage the process of integrating that talent into the current team. A key role for such figures is to improve the productivity of such star payers in ways that are club-specific, which can help mitigate the danger that, once the external analyst community identifies a player as a star, a bidding war will start. If a player can be made more productive by one club rather than another – say due to its specific styles of play or management quality – then the player is more valuable to his current club rather than to a rival. If the management can be clear about this firm-specific productivity, rival clubs may be discouraged from bidding for that player, since his performance will inevitably decline if he moves. Recent evidence from the football industry also offers a general warning to others competing in sectors where the value creation logic is based on the taken-for-granted assumptions of the talent-based industry recipe – that competition for A-class talent is the key (if not the only valid) dimension. The profitability of the football industry has been falling since 2005, while, at the same time wages (which represent 63% of its total revenue) have risen as ‘cheap’ capital – in the form of wealthy private investors – has entered the arena (Jones, 2008). Without a rational response to rising costs (for example, the increased costs of capital caused by the credit crunch) the talent war risks driving all clubs into long run losses, and makes the comments of the Arsenal F. C. chairman about focusing on a financially sustainable business model especially relevant: I am pleased to report another year of satisfactory progress against our key objectives of delivering long-term stability and success through the operation of the Club as a business which is self-sustaining … It was disappointing to see honours elude us last season, particularly by such a narrow margin … however, we have every confidence in the playing squad and we are optimistic of prospects for 2008/09. Clearly, the level of competition both domestically and in Europe will once again be very high, but we are ambitious for success and keen to see the Club add to the seven major trophies it has so far won during Arsène Wenge’s term as manager … we have now reached the Group Stage of the UEFA Champions League for the 11th consecutive year – a record of which we are very proud (Arsenal Holdings PLC, Annual Report 2007/8, page 4). Management is at the heart of both the industry recipe and business model concepts. The most strategic decision for shareholders is the selection of a management team they can trust to craft a rational value creation narrative and to continue to monitor, evaluate and report on whether or not the narrative is creating value and the extent to which such value is being appropriated by the firm. Where value is not being appropriated, shareholders in ‘talent-based’ industries must rely on management to initiate actions to restrain its negative impact before insolvency arrives. Evidence from the recent financial crisis – and the talent – wars that preceded it in sectors such as financial services – would suggest that professional football is not contextually unique. Conceptually, for the notion of industry recipes and business models to have currency, we add to the literature that advocates the need to focus on the value creation narrative and its transparent connection to firm profitability, as well as adding to our knowledge of how firms compete by bridging the general notions of their profit maximizing aspirations and their key strategic decisions.