پویایی های مدل های کسب و کار : تجزیه و تحلیل تجربی از شرکت های بیوتکنولوژی پزشکی در هلند

In this paper, business models of Dutch dedicated biotechnology firms (DBFs) that are active in the field of medical biotechnology are examined. The focus is on the dynamics in business models within the Dutch population and the mechanisms that generate these dynamics. Furthermore, we propose a value-added sequence of the business model of a firm over time and examine if this sequence is found in the population of the Dutch DBFs. We focus on the business models at founding and the shifts that occurred in these business models afterwards. Therefore, data on a survey completed by 80 Dutch DBFs was used together with longitudinal data on shifts in business models of four case studies. We show that both the generation of new firms, due to shifts in the dominating business model at founding over time, and shifts in business models after founding contribute to the dynamics in business models within this population.

The term ‘business model’ is an abstract term. Some authors that studied biotechnology firms, for example Lim (2003) and Pavlou and Belsey (2005), discerned different types of business models but did not define the general term. Chesbrough and Rosenbloom (2002) did develop a useful definition of the business model, although not specific for biotechnology firms. According to them, the business model describes how the firm plans to make money and specifies the position of the firm in the value chain (Chesbrough and Rosenbloom, 2002). This definition implies that the activities a firm is engaged in are embedded in its business model. This portfolio of activities is, by definition, broader than just the main revenue generating activities of a firm. The business model of a firm does, however, provide an indication of the expected main revenue generating activities of the firm in the future. The choice for a specific business model is an important strategic choice, as firms can use it to position themselves within an industry. In this paper, we study business models in medical biotechnology. Recent examples of studies on this subject include those by Mangematin et al. (2003), Nosella et al. (2005), and Bigliardi et al. (2005). Based on variables like the business strategy and the positioning of the firm Mangematin et al. (2003) clustered French biotechnology firms into two groups with distinct business models. It was concluded that these two types of firms required different resources for their development. Bigliardi et al. (2005) carried out a cluster analysis of Italian biotechnology firms, based on the previous research of Nosella et al. (2005). They found three types of business models, namely ‘service companies’, ‘small research companies’, and ‘integrated companies’. Most of the research considers business models as a static characteristic of an individual firm. In order to contribute to the literature on business models, we focus on business model dynamics of the population of Dutch dedicated medical biotechnology firms (DBFs). We propose that the dynamics in business models within the population of medical biotechnology firms can originate from two sources. On the one hand, the generation of new firms can contribute to these dynamics, as the dominance of different business models at founding can change over time. On the other hand, shifts in business models of firms after founding can also generate dynamics within the population of firms. We therefore examine the shifts that have occurred in these business models after founding. Business model dynamics within firms is conceptualized as a sequence in the development of a business model of a DBF over time. Our aim is to examine how both of these mechanisms, dynamics due to founding and dynamics due to shifts, have contributed to the distribution of business models in the population of medical biotechnology firms. Unlike the authors mentioned above, we conduct our analysis using a predefined subdivision of business models that is specified to the context of medical biotechnology. Furthermore, we relate business models to profit generating activities, in order to clarify their distinctiveness.

This study provided insights into business model dynamics in the population of Dutch medical biotechnology firms. Also, we examined the applicability of a proposed sequence in business model development within the Dutch population of medical biotechnology firms. Overall, it can be concluded that dynamics in business models are caused both by dynamics in business models at founding in the population, as well as by shifts in business models of individual firms after founding. As our results show, it is however not imperative that firms shift from one business model to another, even when an older firm is concerned (firm C). With regard to the dynamics caused by the models at founding, we noticed a trend that the prevalence of the product business model and the hybrid product model at founding has increased during the past couple of years. However, this must be regarded as a preliminary conclusion, because of the short time span and low number of foundings in most years. Overall, the diversity in business models at founding has increased over time. Our analysis of dynamics based on shifts in business models shows that value-added progress is indeed of great importance in medical biotechnology. There is an increasing hybridization of business models, caused by shifts in business models after founding. Seven out of the ten shifts that took place in the population could be regarded as in accordance with value-added progress. Each of these seven shifts involved a diversification towards product development. The case studies subsequently provided information on multiple shifts in business models made by individual firms. The reasons for shifting are related to a combination of management's ambition to develop products and creating more potential for out-licensing through product development. The reasons for not starting with product development from the beginning are a lack of up-to-date technology, need for short-term revenues to finance the R&D expenses, or simply not having the ambition to develop products. The timing of the shifts is directly related to the aspects mentioned before; a new management team, having obtained the first revenues, or a technology that is ready for production. With regard to the sequences in business model development of individual firms, the following remarks need to be made. It was shown that the predominant business models at founding were the hybrid models, and in particular the hybrid product model (27 out of 74 firms). Also the product model was often reported as the business model at founding (23 out of 74 firms). These product firms were mostly academic spin offs. These findings differ from the sequence depicted in Fig. 1. We expected that firms would employ service or out-licensing activities in order to build a reputation in a technological field, of which they can benefit when starting product activities in the same field (Deephouse, 1999). We could however explain this discrepancy between our propositions and findings by further examining the types of products developed in this Dutch population. It appeared that therapeutics were only developed by less than half of the firms that were founded as product firms. This relatively low number of firms focusing solely on the development of therapeutics was also found in German biotechnology (Casper, 2000). In view of this, Fig. 1 could be further specified to also include the development of other types of products, such as diagnostics. These other types of products are less expensive to develop, but are also expected to be less profitable. Furthermore, Table 3 shows that most of the product firms do employ short-term revenue generating activities. The most frequently mentioned revenue-generating activities include out-licensing and selling research products. This finding substantiates the distinction made earlier in this paper between activities reflected in business models and profit generating activities. Data on these two types of activities need to be combined in order to provide an overview of the portfolio of activities of a firm. Also, it appeared that academic spin-off firms are relatively often founded as product firms compared to firm spin offs and independently established firms. An explanation for this can be that academic spin offs can benefit from the reputation of their parent organization and research group and might therefore be better able to start as a product firm. Also, these academic spin offs are likely to be able to start their business using technologies that have already been developed by their parent organization, as this parent organization is limited in its opportunities to commercialize these technologies on its own. Several possibilities for further refinement of the value-added sequence in business model development that we proposed in Fig. 1 have been mentioned. We furthermore need to mention that the number of shifts that occurred in the population was rather low, namely only 10 out of 75 firms shifted from one business model to another. This can be attributed to the fact that the Dutch DBFs are relatively young. It was shown that the percentage of the firms that made a shift in their business model was higher for the firms founded before 2001, than for the firms founded between 2001 and 2005 (Table 6). While there is some valuable information available from other studies on developments in business models on the level of specific populations of firms (see for instance Ernst Young, 2002, Ernst Young, 2003 and Ernst Young, 2004), additional research on the level of the firm should provide insight into shifts in business models of individual firms and the causes and consequences of these shifts. This study has provided some first insights into this subject as well as into the timing of shifts and multiple shifts of the business model of an individual firm. These first insights combined with the information on dynamics induced by newly founded firms represent the primary contribution of this paper to academe. The number of cases needs to be extended in order to determine whether these results are representative for firms active in medical biotechnology in the Netherlands, and might even be generalized to other populations of medical biotechnology firms. Also, additional research should be conducted on more established populations of medical biotechnology firms as this would increase the number of cases of firms that have shifted their business model. Overall, it might be expected that shifting of business models is an important issue for medical biotechnology firms in general, and further research should provide insight into the extent to which patterns in the nature and timing of these shifts can be found across populations of firms in developed economies. It may be expected that similarities in the financial climate of different countries or regions at a certain moment in time will contribute to the extent to which findings can be generalized to these countries or regions. We noticed a trend in Fig. 6 that the prevalence of the product and platform business models at founding has increased during the past couple of years. Further research will need to provide more clarity on this finding, and explanations thereof. In this study, we only took into account firms that still existed in 2004. It would also be very relevant to explicitly address firm failure and relate this to business model dynamics. Other studies have shown that, in German biotechnology, firm failures occur mainly in the fields of platform technology and therapeutics/tissue engineering, while firms engaging in services are less likely to fail (Ernst & Young, 2004). Not having been able to secure venture capital was indicated as the primary cause of these failures. It would be interesting to relate these findings to the possibility of shifting to hybrid business models, and the resulting extent of dependence on venture capital acquisition. Several years ago biotechnology was identified by the Dutch government as a field that is of great importance in developing a knowledge-based economy. This was followed by significant seed capital investments in newly founded firms. It has, however, become increasingly difficult for these new high-technology firms to obtain substantial amounts of venture capital. Consequently, on the one hand, firms can adapt their strategies in favour of selection criteria adhered to by venture capitalists, and on the other hand it becomes increasingly important to find ways to secure a stable income. This might lead to a further increase of the importance of hybrid business models as they include service or platform-related activities as compared to solely expensive product development, as was also the case in Germany in 2004 (Ernst & Young, 2004). Further research should provide insight into this subject. Moreover, executives not only need to manage the knowledge portfolio of the firm, and identify new technological opportunities (Malerba and Orsenigo, 1999; Terziovski and Morgan, 2006), they also need to manage the portfolio of activities the firm is engaged in, which are embedded in its business model, and is also not static. Further research needs to address the possible coevolution of these portfolios. As was noted in a paper by Terziovski and Morgan (2006), a critical success factor to accelerate innovation in biotechnology by firms is clearly expressing the strategy of the firm, which, as can be derived from this study, can be done by explicitly managing and articulating its business model and proposed changes thereof.