Our purpose is to examine an individual’s business model and show what, why and how changes over time.
An Individual Business Model in the Making: a Chef’s Quest for Creative Freedom
Introduction
A business model is a useful notion that (as Baden-Fuller and Morgan find) enhances the understanding, labeling and classification of firms' operations. Defined by Amit and Zott as ‘the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities’, the concept fell from grace at the time of the dot.com crash, but has regained visibility and importance in the recent downturn.1 Its renaissance is seen in the growing number of sources, from academic articles and executive reports to media publications, as well as the range of contexts which have been studied: from internet-based companies to ventures in healthcare, biotechnology, open source communities, or those fulfilling ‘bottom of the pyramid’ needs in developing countries.2
In the main, business models are depicted as organizational devices that reveal a company's logic for creating and capturing value, and also its approach to constant renewal. However, companies experience difficulties and encounter barriers in renewing their business models. Discovering and exploiting new business models requires significant experimentation and learning, as well as a repertoire of leadership actions that accelerate renewal by enabling meta-capabilities for what Doz and Kosonen identify as ‘organizational agility’.3 Still, little is known about what drives business model transformation and the mechanisms through which change occurs, and there is also a dearth of research on whether and how individuals – entrepreneurs, professionals, scientists, artists – shape and transform their ‘individual’ business models to pursue specific interests. Thus an understanding of the applicability and meaning of the business model concept and its dynamic beyond the organizational unit of analysis – to individuals or supra-organizational units - is still to emerge.4
This article examines an individual's business model and traces its changes over time. In particular, it provides rich detail on the nature of these changes and why and how they take place. For the purpose of this study we define individual business models as sets of activities, organizing, and strategic resources that individuals employ to pursue their interests and motivations, and to create and capture value in the process. We draw insights from a longitudinal, in-depth, inductive study of the business model evolution of a focal case - that of the gastronomic innovator and entrepreneur Ferran Adrià, chef and co-owner of the three-star Michelin restaurant elBulli (see the Appendix for details of data and methods used). Our unit of analysis is Adrià's individual business model - not that of his restaurant, which is just one element within it – and our purpose is to hold to this individual perspective and show the triggers, mechanisms and defining changes in its evolution as he seeks to develop and employ his creative freedom.
The article contributes to the study of business models in three ways. First, we show for the first time that the notion of business model has both significance and usefulness when extended to the level of the individual. Second, we shed light on the dynamics of an individual business model, in which organizations are a means in the pursuit of individuals' goal and motivations, identifying the types of changes of (and within) the business model, and the articulating triggers and mechanisms associated with these transformations. Finally, we provide a rich account of value as an essential element in an individual's business model, distinguishing between value creation, value appropriation and value sharing mechanisms, as well as value slippage to third parties.
The article is structured as follows. First, we reveal the four main stages in the evolution of Adrià's business model, denoting changes in activities, organizing, and strategic resources, (the ‘what') as well as in the value created and captured by the chef, and shared with or appropriated by third parties. We also identify triggers (the ‘why') and mechanisms (the ‘how') that drove this business model transformation over time. Next, based on an analytical generalization of our inductive study's findings, we articulate a theoretical framework of the dynamics of individual business models. Finally, we conclude with a consideration of the contribution of this study, avenues for further research and implications for managers.
Section snippets
The making of Ferran Adrià's business model
The self-taught Spaniard Ferran Adrià is considered one of the world's most innovative chefs, and an emblem and driving force of the ‘Nueva Nouvelle Cuisine’ (‘nueva' means new in Spanish). Beyond cuisine, he has also received recognition in the fields of design, art, science and society, as evidenced by, e.g., the 2006 Lucky Strike Designer Award (previously given to such creators as Karl Lagerfeld, Donna Karan and Philippe Starck); his participation as an artist in the 2007 ‘documenta12’ (one
The what – business model transformation: activities, organizing, strategic resources and value
Table 1, Table 2 summarize the critical elements of Adrià's business model in each period, revealing the changes in its key activities, organizing and strategic resources, as well as in the value he and his team created, captured both by them and by external parties.
The why and how: triggers and mechanisms of business model transformation
The previous sections have unraveled changes in elements of Adrià's business model over time, paying attention to activities, organizing, strategic resources and value. We now move on to discuss and illustrate the triggers that drove the business model dynamics and the mechanisms through which the changes shown in Figure 1 were achieved.
Individual business model transformation: a theoretical framework
Figure 2 reveals a theoretical framework of an individual business model transformation that has been analytically generalized from this case, and which captures both internal elements and external factors. There are three main internal elements: (1) triggers of dynamics, (2) changes in business model activities, organizing and strategic resources, and (3) value captured changes, which may promote modifications of the triggers and adjustments to main elements of the business model. The internal
Conclusion
By tracing the creation of and modifications to Ferran Adriá's business model, this study has depicted the evolution of an individual business model, revealing the what, why and how of its changes over time. It has shown that the notion of business model has a meaning and usefulness that extends beyond its application to organizational units, and that it can also help us understand the business trajectory of individuals – such as entrepreneurs, professionals, scientists or artists – with
Acknowledgement
We are grateful for the helpful comments and suggestions provided by the editors of the Special Issue – Charles Baden-Fuller, Benoît Demil and Xavier Lecocq - and the journal's reviewers, as well as Jon Morgan's efforts in judiciously improving our manuscript. Our thanks also go to Henry Chesbrough, Mike Jacobides, Kate Kellogg, Phanish Puranam, Joan Enric Ricart and Lourdes Sosa, as well as to the participants at the InnovaRH consortium meeting (November 2009, Madrid, Spain); the Academy of
Silviya Svejenova is Associate Professor in the Business Policy Department at ESADE Business School. She holds a PhD in Management from IESE Business School, and her research examines novelty and business models in creative industries, as well as the work and careers of executives. She has served on the Board of EGOS (European Group for Organizational Studies) since 2004, and her book Sharing Executive Power (Cambridge University Press) was an Academy of Management Terry Book Award finalist for
References (29)
- et al.
A Day at elBulli: An insight into the ideas, methods and creativity of Ferran Adria
Phaidon London
(2008) Los pupilos de Adrià crean una empresa
Expansión
(2008)- et al.
Món Sant Benet: utopía, ambició i passió., Un cas de lideratge territorial a la Catalunya Central
- C. Wright, ElBulli: The Science of Desert, Pastry Art & Design, February, 44–52 (quote is from p. 46)...
- C. Zott and R. Amit, Business Model Design: An Activity System Perspective, Long Range Planning 43(2–3),...
The creative response in economic history
Journal of Economic History
(1947)et al.Strategic intent
Harvard Business Review
(1989)The Alert and creative entrepreneur: a clarification, IFN Working Paper No. 760
(2008)Expert opinion and gastronomy: the recipe for success
Journal of Cultural Economics
(2003)et al.The role of guides in artistic industries: the special case of the “star system” in the haute-cuisine sector
Managing Service Quality
(2005)et al.Revenue models in haute cuisine: an exploratory analysis
International Journal of Contemporary Hospitality Management
(2005)- C. Baden-Fuller and M. S. Morgan, Business models: practice and theory, Long Range Planning, 43(2–3), 156–171... et al.
Value creation in e-business
Strategic Management Journal
(2001)Creative entrepreneurship in a downturn: Q&A with Bhaskar Chakravorti
(23 February 2009) Why business models matter
Harvard Business Review
(2002)Open innovation: the new imperative for creating and profiting from technology
(2003)et al.Business model design and the performance of entrepreneurial firms
Organization Science
(2007)IBM Global CEO Study (2006), The Enterprise of the Future IBM Global CEO Study...Three steps to a sound business model
Business Week (Online), New York
(2 March 2009)Managers ditch old business models
Financial Times P.
(24 Nov 2008)A rubbish business model
The Economist
(23 Sep 2006)et al.Creating a new business model; she's still ‘The Body’
Newsweek
(26 Jun 2006)M. Cusumano, The changing software business: From products to services and other new business models, Paper of the MIT... et al.E-business strategies and Internet business models: how the internet adds value
Organizational Dynamics
(2004)et al.Continuous morphing: Competing through dynamic capabilities, form and function
Academy of Management Journal
(2001)Business models for internet based e-commerce: an anatomy
California Management Review
(2000)et al.Disruptive innovation in health care delivery: a framework for business model innovation
Health Affairs
(2008)et al.Do science and money go together? The case of the French biotech industry
Strategic Management Journal
(2008)et al.Dynamics in business models: an empirical analysis of medical biotechnology firm in the Netherlands
Technovation
(2007)et al.Development of SMEs and heterogeneity of trajectories: the case of biotechnology in France
Research Policy
(2003)et al.Business models and investment trends in the biotechnology industry in Europe
Journal of Commercial Biotechnology
(2002)et al.How do firms make use of open source communities?
Long Range Planning
(2008)et al.Strategic Innovation at the base of the pyramid
Sloan Management Review
(2007)et al.Market penetration and acquisition strategies for emerging economies
Long Range Planning
(2006)The fortune at the bottom of the pyramid
(2006)J. D. Thompson and I. C. MacMillan, Business Models: Creating New markets and societal wealth, Long Range Planning...M. Yunus, B. Moingeon and L. Lehmann-Ortega, Building social business models: lessons from the Grameen experience, Long...- Y. Doz and M. Kosonen, Embedding strategic agility: A leadership agenda for accelerating business model renewal, Long...
The role of the Business model in capturing value from innovation: evidence from Xerox corporation's technology spin-off companies
Industrial and Corporate Change
Mastering strategic renewal: mobilising renewal journeys in multi-unit firms
Long Range Planning
The fit between product market strategy and business model: implications for firm performance
Strategic Management Journal
Unless otherwise specified, all quotes are from The History of elBulli
Carles Abellán, un cocinero en moto: A Prologue
Cited by (171)
Is the cooking profession still ‘hot’? A qualitative cross-national study of chefs' career perceptions
2023, Journal of Hospitality and Tourism ManagementThe promise of digital technologies for sustainable entrepreneurship: A systematic literature review and research agenda
2023, International Journal of Information ManagementThe development of digital commerce in the fashion industry: The typology of emerging designers in London
2023, Technological Forecasting and Social ChangeDynamic capabilities in social purpose organisation during critical event: Case study analysis
2022, International Journal of Disaster Risk ReductionA journey towards a digital platform business model: A case study in a global tech-company
2022, Technological Forecasting and Social Change
Silviya Svejenova is Associate Professor in the Business Policy Department at ESADE Business School. She holds a PhD in Management from IESE Business School, and her research examines novelty and business models in creative industries, as well as the work and careers of executives. She has served on the Board of EGOS (European Group for Organizational Studies) since 2004, and her book Sharing Executive Power (Cambridge University Press) was an Academy of Management Terry Book Award finalist for Best Management Book in 2007. Business Policy Dept., ESADE Business School, Ramon Llull University, 60-62 Pedralbes Av., 08034 Barcelona, Spain. Tel.: +34 932806162. E-mail: [email protected]
Marcel Planellas is Professor in the Business Policy Department, Lead Researcher of the Entrepreneurial Initiative Research Group at ESADE - Ramon Llull University. He holds a PhD in Business and Economics from Universitat Autònoma de Barcelona and is the current Secretary General of ESADE. His research interests are in the field of Strategy and Entrepreneurship, and he is an independent director on the boards of various Spanish companies. Business Policy Dept., ESADE Business School, Ramon Llull University, 60-62 Pedralbes Av., 08034 Barcelona, Spain. Tel.: +34 932806162. E-mail: [email protected]
Luis Vives is Assistant Professor in the Business Policy Department at ESADE Business School. He gained his PhD in Management at IESE Business School and was Postdoctoral Fellow at the MIT Sloan School of Management before joining ESADE. His research interests focus on the processes, paths and positions of firm internationalization, the management of the firm's corporate scope, and the design and development of business models. Business Policy Dept., ESADE Business School, Ramon Llull University, 60-62 Pedralbes Av., 08034 Barcelona, Spain. Tel.: +34 932806162. E-mail: [email protected]