The business model in the practice of strategic decision making: insights from a case study

Abstract

Purpose

Traditionally, management scholars have conceptualized the business model as a locus of innovation, planning tool, heuristic logic, or market device. However, so far, little is known about how the model is being applied in practice. To address this gap, this study aims to introduce a strategy‐as‐practice perspective and to explore the implications and limitations of applying the business model as a strategizing device.

Design/methodology/approach

A single‐case study design was selected to explore the implications and limitations of using the business model as a strategizing device in a high‐tech firm.

Findings

The business model provides a valuable structural template for mapping the current business model of a firm. However, in developing and discussing strategic options, it acts more as a symbolic artifact stimulating a creative decision‐making process than as an analytic tool with a clear sequence of steps.

Practical implications

When working with the business model concept in practice, its technical and linguistic legitimacy is initially highly limited. In the process of gaining legitimacy, however, a collective lock‐in to the current strategic identity may arise. Managers have to be aware of these limitations and need to achieve an appropriate balance within the organization.

Originality/value

The study introduces a social practice perspective into the business model debate, with a special emphasis on the implications and limitations of applying the business model concept as a strategizing device in a real‐life setting.

Citation

Hacklin, F. and Wallnöfer, M. (2012), "The business model in the practice of strategic decision making: insights from a case study", Management Decision, Vol. 50 No. 2, pp. 166-188. https://doi.org/10.1108/00251741211203515