همانندسازی مدل کسب و کار برای بین المللی شدن زودهنگام و سریع : تجربه مستقیم ING

Business model replication is a basis for the early and rapid internationalisation of new ventures. But business models do not emerge ‘fully formed’ – rather they continue to evolve from their initial conception and throughout their repeated application. The earlier and more rapidly internationalisation occurs, the more condensed is the period during which this evolution can – and must – occur if the internationalisation is to be successful. In this article we analyse the processes whereby the business model of a new venture – ING Direct – emerged and evolved as the venture underwent early and rapid internationalisation. We identify the contribution of four processes which we label clarification, localisation, experimentation and co-option. This study contributes to the understanding of the processes underlying both business model evolution and early and rapid internationalisation.

One of the great strengths of multinational enterprises (MNEs) is their potential to function as a network to facilitate the creation and transfer of knowledge. A key reason for the pervasiveness of the MNE organizational form is often thought to be its capacity, through intra-organizational links, to exploit knowledge more effectively than can domestic organizations or the market at large. However, while forming an MNE can enable the knowledge creation and transfer processes, at the same time these processes can also be key in facilitating a new venture becoming a MNE in the first place. In particular, they are means whereby the business model underpinning the venture evolves, with associated implications for organizational performance.1 Where a new venture intends to internationalise both early in its existence and rapidly – the phenomenon of ‘accelerated internationalisation’ – there is likely to be a still greater dependence on effective knowledge creation and transfer. Even where internationalisation is based on a replication strategy, a new venture’s business model is unlikely to have emerged fully formed, and knowledge creation and knowledge transfer will impact both its early fine-tuning and its continuing evolution. Despite the significance of knowledge creation and transfer for the growth of new ventures into MNEs, this aspect has received relatively little attention in the literature, as research on MNEs has tended to focus on their functioning as already established entities rather than on the processes whereby emerging ventures become global players. Similarly, the business model literature has tended to emphasise either the innovative capacity of new business models or the need for them to change over time to meet changing competitive conditions, but far less attention has been given to the specific detail of processes whereby new business models are ‘discovered, adjusted and fine tuned by doing’.2 To address this imbalance, we have researched the processes through which business model replication can provide a basis for the early and rapid internationalisation of a new venture. In particular, we illustrate the role of four processes – which we characterise as clarification, localization, experimentation and co-option – in determining how a business model takes its initial form and subsequently, continues to evolve. Our research was case-based, involving a longitudinal study of ING Direct’s emergence as a global retail bank. This company constitutes a particularly appropriate research site for four mutually reinforcing reasons which, taken together, made the development and international expansion of ING Direct a rewarding case for research study. • First, it internationalised early and rapidly: within five years of the results of the initial trial of its business model (1997–8), ING Direct had entered eight other countries. • Second, ING Direct’s international expansion was through business model replication, and since it occurred in multiple countries over a concentrated time period, it serves as an example of a natural experiment into the processes associated with the emergence and evolution of a replicated business model. • Third, various measures indicate that ING Direct’s accelerated international expansion was successful. Within six years of the initial business model trial it was the largest direct bank (as measured by client funds entrusted) in every country where it operated (see Table 1). Despite still incurring the costs involved in entering further new markets, it became profitable by the final quarter of 2002, and 2003 provided its first full year of profit (see Table 2). Although ING was not a well-known entity in most countries at the time of entry, brand awareness of ING Direct averaged 83% across these markets by 2007. No other direct bank has had a comparable record of success on a global scale to date.3 Fourth, we were permitted access to a range of informants that was exceptional in terms of both their seniority and geographic spread, gaining approval for interviews with the CEOs and other senior executives both at Global Head Office and in each operational country. This breadth of access to the most senior strategic decision-makers involved in the design and implementation of ING Direct’s business model offered us the possibility of exceptional data quality. This article is structured as follows. First, we identify key elements of the existing literatures on early and rapid internationalisation, and on the strategy of business model replication. We then outline our research method (additional details are provided in the Appendix) before presenting our findings. The paper ends with a discussion and conclusion that focuses on the implications of our findings for theory and practice.

Our research provides a detailed illustration of the way in which a strategy based on business model replication can be used in the context of early and rapid internationalisation. The research also highlights the evolutionary nature of business models, identifying four processes which provide a structure for this evolution. In doing so, our findings make a number of contributions to the research literature as well as providing insights for managers. Winter and Szulanski refer to ‘the strategic subtlety of replication’ to express their view that replication can be so much more than its common characterization – as the relatively unproblematic repeated application of a basic business model. The ING Direct experience provides a clear example of how this ‘subtlety’ may be manifest through the combinations of exploration and exploitation we have described in our clarification, localisation, experimentation and co-option categories. The co-evolution of application and discovery that has characterized ING Direct’s clarification process illustrates their argument that the core elements of a replicated business model, far from coming into existence ‘in a flash, [are] discovered, adjusted and fine-tuned by doing’. However, whereas Winter and Szulanski characterize replication as ‘exploration followed by exploitation’, the ING Direct experience provides a modified perspective on this depiction. While clarification was substantially exploration-oriented, exploration did not end there: it remained an important feature of the way the subsidiaries enacted the core business model principles through localization, experimentation and co-option.25 principle-based replication can be a dynamic process in which exploration and exploitation have a continuing and iterative relationship. …and depends on people acting on their own initiative, but within the spirit of the principles. Our research also provides an illustration and elaboration of the Baden-Fuller and Winter concept of principle-based replication, and as such provides a complement to the more common template-based studies of replication. The ING Direct experience shows that principle-based replication can be a dynamic process in which exploration and exploitation have a continuing and iterative relationship. Clarification during the Canadian pilot experience resulted in the refining of set of core principles which then constituted the basis for the business model’s subsequent replication in other locations. ING Direct’s policy of recruiting by ‘cultural fit’ is also consistent with their argument that the motivation of staff is of particular significance where replication is principles-based. Whereas template-based replication is more likely to involve copying prescribed actions closely, principle-based replication depends more on people acting on their own initiative, but within the spirit of the principles. Localisation and experimentation are also likely to be particularly significant in this replication mechanism, because it is likely to require more ‘filling-in’ of the operational details than in template-based replication. In fact, one might suggest that localisation and experimentation are likely to have an uneasy relationship with template-based replication, because of their potential to undermine the kind of tightly coupled sets of activities that templates tend to embody, and which may be believed to be key to the new operation’s ability to return performance benefits. Our study also makes a contribution to our understanding of the range of application of the concept ‘business model replication’, a concept normally applied at the level of individual business units (such as Starbucks or McDonalds outlets) that have a physical presence that ING Direct’s branchless internet and call centre based organization lacks. Nevertheless, ING Direct still sought to expand on the basis of replication of core principles, and thus our research provides an example of the application of business model replication beyond its normal sphere of use. Our focus on business model replication also allows us to contribute more broadly to knowledge of the processes whereby emerging entities become global players, and to the nature of inter-subsidiary and head office-subsidiary interaction in the context of early and rapid internationalisation. As part of this broader contribution, our research provides a new perspective on the application of the concept ‘born global’. While this label is typically associated with small and medium enterprise (SME) start-ups, the history of ING Direct illustrates that new enterprises with born-global intent may be ‘spun-off’ from a corporate parent, and that (as with SMEs) may also have to compete for funding, albeit from an internal, rather than external, capital market.26 It also contributes to understanding the operation of MNEs as networks. With the rise of the perspective that sees MNEs as networks that create, access, integrate and apply knowledge, subsidiaries have been seen increasingly as key sources of knowledge, capabilities and ideas that can be harnessed for the strategic benefit of the entire organization. The business model evolution process utilised by ING Direct relied on the MNE operating as a network, because it was heavily dependent on the innovative capacity of subsidiaries and on intra-subsidiary knowledge transfer.27 Our study raises some significant issues for managers to consider. First, it has shown that early and rapid internationalisation can involve the processes we have labelled clarification, localization, experimentation and co-option. Second, it illustrates that alignment of formal practices and cultural beliefs can encourage experimentation and co-option, and that the latter is likely to benefit where a ‘steal with pride’ ethos (or similar) drives behaviour. Third, it suggests that recruitment practices are likely to be particularly important where replication is principle-based, because employees have much more discretion than in a template-driven situation as to how they act, and can thus affect the success or failure of the replication effort. And, where the business model being replicated varies considerably from industry orthodoxy, previous experience in the industry may make applicants from within the industry less, rather than more, attractive as potential employees, because of the risk of them bringing engrained attitudes and beliefs with them that constrain their capacity to act in alignment with the core principles of an innovative business model that challenges industry norms. Fourth, our study shows that subsidiary-level localization, experimentation and co-option initiatives can – and perhaps should – run in parallel with head office oversight of core business model principles. ING Direct’s ‘fleet of companies’ concept manifested its belief in the need for an effective balance between centralized co-ordination and subsidiary autonomy if principle-based business model replication was to work well. This study illustrates the dynamic form that replication can take …[but] clarification, localization, experimentation and co-option may not be the only combination of processes associated with success ING Direct constitutes an exemplar case of business model replication in the context of early and rapid internationalisation. As such, the value of the rich data that it provides needs to be appreciated in parallel with acknowledgement of the limitations of such an approach. First, although the findings are based on the practices in eight different countries, it is still a study of one company, so, while the data may be rich, we make no claims as to the generalisability of our findings. The merit of the study lies in its ability to illustrate the dynamic form that replication can take when associated with the early and rapid internationalisation of an emerging MNE, not in any claim to representativeness. Clarification, localization, experimentation and co-option may not be the only combination of processes associated with successful replication: comparative case studies across multiple MNEs would determine whether this pattern of practices is found more broadly and large-scale quantitative research would identify the full extent of any such pattern. Second, while specific business model replication practices coexisted with specific indicators of success – and thus may seem to suggest a causal link – the data from this study alone is insufficient to constitute evidence of causality. Company performance is an outcome of multiple actions by both the company concerned and its competitors; only comprehensive research into both sets of actions would produce the basis for an evidence-based attribution of causality.28 In conclusion, this study contributes to our knowledge of the processes whereby an emerging business model takes its initial form and then continues to evolve. It provides a specific example of what is meant by the argument that business models, far from emerging fully-formed, are likely to be discovered, adjusted and fine tuned by ‘doing’. So our study also contributes to understanding how early and rapid internationalisation can both contribute to, and be facilitated by, business model evolution.