BUSINESS MODEL COMMUNICATION AND FINANCIAL PERFORMANCE IN CROSS NATIONAL ACQUISITIONS

Purpose: The purpose of this study is to explore the link between external business model communication and financial performance for ten cross-national acquisitions by Danish companies. Methodology: We tie stakeholder and shareholder theory to Magretta’s (2002) model, which capture a holistic approach to the analysis of newsletters and financial data. We further apply Fairclough’s (1992) critical discourse analysis and regression analyses to analyze the communication process and the accounting data after the acquisition, respectively. Findings: The study identifies a lack of business model communication in an acquisition process. Furthermore, our analyses show that 15 years after the acquisitions, the acquirers have generally not established substantial links between their own business models and the business models of the acquired companies. As to the quantitative analyses, above average narrative communication has a weak link to company performance. Antecedents of good communication are the number of stakeholders that have to be addressed, as well as the anticipated disruptive events after the acquisition. Research limitations: The analytically indicated links between external communication and financial performance have limitations due to a small sample and due to the complex organizational set-up where the acquired organizations’ financial performance is quickly absorbed into the parent company. Originality: This study is novel in its approach of applying a longitudinal qualitative as well as quantitative approach to business model identification in mergers and acquisitions. Furthermore, it provides linkages and discussions of business model conceptualization with stakeholder and shareholder theories. &nbsp

Charging Customers or Making Profit? Business Model Change in the Software Industry

Purpose: Advancements in technology, changing customer demands or new market entrants are often seen as a necessary condition to trigger the creation of new Business Models, or disruptive change in existing ones. Yet, the sufficient condition is often determined by pricing and how customers are willing to pay for the technology (Chesbrough and Rosenbloom, 2002). As a consequence, much research on Business Models has focused on innovation and technology management (Rajala et al., 2012; Zott et al., 2011), and software-specific frameworks for Business Models have emerged (Popp, 2011; Rajala et al., 2003; Rajala et al., 2004; Stahl, 2004). This paper attempts to illustrate Business Model change in the software industry. Design: Drawing on Rajala et al. (2003), this case study explores the (1) antecedents and (2) consequences of a Business Model-change in a logistics software company. The company decided to abolish their profitable fee-based licensing for an internet-based version of its core product and to offer it as freeware including unlimited service. Findings: Firstly, we illustrate how external developments in technology and customer demands (pricing), as well as the desire for a sustainable Business Model, have led to this drastic change. Secondly, we initially find that much of the company’s new Business Model is congruent with the company-focused framework of Rajala et al. (2003) [product strategy; distribution model, services and implementation; revenue logic]. Value: The existing frameworks for Business Models in the software industry cannot fully explain the disruptive change in the Business Model. Therefore, we suggest extending the framework by the element of ‘innovation’