Integrating business models and strategy for sustained competitive advantage

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Integrating business models and strategy for sustained competitive advantage

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Title: Integrating business models and strategy for sustained competitive advantage
A case study of Ryanair
Author: Korsaa, Caroline Ramos; Røge Jensen, Lisbet
Abstract: This thesis studies the business model as a possible integrator of different strategic perspectives on firms‟ sustained competitive advantage. It presents the arguments for viewing the business model as a concept closely related to strategy in general and competitive advantage in particular. Furthermore, it reviews existing business model literature in order to determine how this field can contribute to our understanding of sustained competitive advantage. Despite the increase of interest in the term business model by academics and managers, no common definition has yet been accepted by the business community (Shafer et al., 2005). On one hand, Porter (2001) argues that the talk about business models has substituted the talk about strategy and competitive advantage and that the business model approach to management is an “invitation for faulty thinking and self-delusion” (p.73). On the other hand, the study conducted in this thesis and the review of existing business model literature show that the business model can in fact be integrated with strategy in order to create a wider understanding of a firm‟s sustained competitive advantage. Hence, based on a theoretical framework, this thesis proposes a business model which integrates components from both Industrial Organization and the Resource-Based View of the firm as well as components from the business model literature. In addition, the business model proposition is based on the hypothesis that the sustainability of competitive advantage depends on a strategic fit, which is argued to be a function of competitive advantage and the degree of coupling between the business model components. In order to test the business model proposition and hypothesis, an empirical investigation of the Irish airline and industry leader Ryanair is conducted. The conclusion of the study carried out in this thesis is, that including important elements from different perspectives allows for a greater complexity when evaluating firm performance. This complexity comes from the wider scope of analysis which is a result of working with the several components included in the business model proposition. Working with these components makes it possible to pull apart aspects of the firm in order to look closely at the firm‟s fundamental functions and this, in turn, enhances our understanding of sustained competitive advantage.
URI: http://hdl.handle.net/10417/1771
Date: 2011-03-21
Pages: 137 s.
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