Customer knowledge management and IT-enabled business model innovation: A conceptual framework and a case study from China
Highlights
► A model for CKM and IT-based business model innovation is proposed. ► A case from a Chinese leading telecommunication firm is employed. ► We attempt to link CMK research to business model innovation literature. ► We extend the CKM research through integrating customer and firm perspective.
Introduction
The literature has highlighted the importance of business model design to firm performance (e.g., Afuah, 2004, Zott & Amit, 2008), especially with the emergence of the Internet technology and its massive adoption for e-business (Ghaziani & Ventresca, 2005). Despite scholars may use different definitions of business model in different ways, there is some consensus that it describes the design of the value creation, delivery and capture mechanisms to be employed by firms (Chesbrough, 2010, Chesbrough and Rosenbloom, 2002, Teece, 2010, Zott et al., 2011). Due to the post-industrial rise of the knowledge economy and digital technology, IT-enabled business model becomes an important locus of innovation and the design of an appropriate IT-enabled business model is increasingly seen as a crucial business decision for firms (Amit and Zott, 2001, Chesbrough, 2010, Teece, 2010).
Meanwhile, as Teece (2010) noted, in order to successfully realize the potential of business model, firms need to be more customer-centric––“deliver value to customers, entice customers to pay for value, and convert those payments to profit” (Teece, 2010, p. 172), and manage customer-related knowledge more effectively (Rollins & Halinen, 2005). In doing so, firms need to not only actively acquired from customers, but also activate the knowledge interaction between firms and customers and the knowledge sharing among users (Baldwin et al., 2006, Franke & Shah, 2003; von Hippel, 1986, von Hippel, 1994). Therefore, understanding customers’ demand and behavior through managing the knowledge flow between a firm and its customers becomes a critical activity for business model innovation (Novo, 2004, Smith and McKeen, 2005). However, it is worth noting that the linkage between customer knowledge management and business model innovation remains a less discussed issue in the literature. In addition, although the importance of IT to customer knowledge management and business model innovation has been emphasized in the literature (Amit and Zott, 2001, Rowley, 2002), the process and mechanisms behind the influence of customer knowledge on IT-enabled business model innovation remain mostly as a black box (Zott et al., 2011). This paper attempts to bridge these theory gaps. More specifically, in this paper we focus on two related questions. First, what types of customer-related knowledge are included in IT-enabled business model innovation and how do these different types of knowledge influence the process of business model innovation? Second, as an enabler for business model innovation, how does IT influences the linkage between customer-related knowledge and business model innovation? In doing so, we introduce a conceptual framework to capture the linking mechanisms between customer knowledge management and IT-enabled business model innovation through integrating both customer perspective and service provider/producer perspective. Then case study method will be employed to validate this conceptual framework.
The rest of the paper is organized as follows: A conceptual framework gives the research framework; research method describes the case subject and data collection; the empirical results from a longitudinal case study are presented in case study; and finally, in the discussion and conclusion section of the paper, we provide a summary of the research findings, theoretical contributions, managerial implications, limitations and future research directions for the study.
Section snippets
A conceptual framework
A business model defines how a company creates and delivers value to customers, and then converts payments received to profits (Teece, 2010). In essence, it describes the design or architecture of the value creation, delivery, and capture mechanisms (Chesbrough, 2010, Chesbrough and Rosenbloom, 2002, Teece, 2010, Zott et al., 2011). Value creation is defined as the process in which a firm makes or increases the value flows embodied in and/or associated with market offerings for its customers
Research method
The framework was examined through a longitudinal case study. Case studies are appropriate when the unit of analysis is a system of action rather than individual one and the viewpoint of multiple respondents is desired (Yin, 2002). We selected the Sichuan Branch of China United Telecommunication Corporation (SBCUTC) as our research subject. Since 2003, this company attempted to build an agriculture information service (Tianfu Agriculture Information Network, TAIN) to exploit the rural
Background
During the last decade, the mobile communication market in China has developed very rapidly. However, there existed a significant disparity between urban and rural areas. Restricted by income, education level and geographic condition, the mobile communication service business in rural market developed quite slowly. These figures in Table 1 indicate an obvious gap in mobile phone use between urban and rural market.
For mobile communication services providers in China, it was a great challenge to
Summary of research findings
In this study, we present a conceptual framework to describe the linkage between customer knowledge management and IT-enabled business model innovation through investigating the influence of different types of customer knowledge on value creation and the role of IT in value delivery and value capture. Specifically, we find that different types of customer-related knowledge (i.e., knowledge about customer, knowledge from customer and knowledge for customer) contribute to value creation in
WU JIEBING is an Associate Professor of Strategic Management at the College of Public Administration, Zhejiang University, China. He received his Ph.D. in Management from Zhejiang University (2006), China. His research interests are mainly focused on inter-organizational networks and field evolution.
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WU JIEBING is an Associate Professor of Strategic Management at the College of Public Administration, Zhejiang University, China. He received his Ph.D. in Management from Zhejiang University (2006), China. His research interests are mainly focused on inter-organizational networks and field evolution.
GUO BIN is a Professor of Innovation Management at the School of Management, Zhejiang University, China. He is currently a vice-chairman of the Professor Committee at School of Management. He received his Ph.D. in Management from Zhejiang University (1998), China. His research interests are in the areas of innovation management and innovation strategy. He has published articles in refereed international journals including the Research Policy, Technovation, Technology Analysis and Strategic Management and other journals.
YONGJIANG SHI is the University Lecture of Industrial Systems in Engineering Department, and research director of the Centre for International Manufacturing in the Institute for Manufacturing, Cambridge University. He has been studying management of international manufacturing network and supply chain for over 15 years. His recent research interests have covered global manufacturing strategy, network system design, technology transfer in the contexts of intra-company coordination and inter-company collaboration, and emerging Chinese manufacturing companies.