WHEN DO NOVEL BUSINESS MODELS LEAD TO HIGH PERFORMANCE? A CONFIGURATIONAL APPROACH TO VALUE DRIVERS, COMPETITIVE STRATEGY, AND FIRM ENVIRONMENT

The strategy literature has viewed novel business model design as a universally positive antecedent of high performance in entrepreneurial ventures. Not only have scholars emphasized novelty as a necessity, but they have almost considered it a sufficient condition for performance. Challenging this assumption, we hypothesize that novelty can produce high performance only in combination with specific configurations that feature other value drivers, such as efficiency, lock-in, and complementarity, which help firms not only create value but also capture more of it. Fuzzy set qualitative comparative analysis of two samples of Internet-enabled firms largely supports our hypotheses. We find that novelty alone is insufficient for high performance, even when it appears as a necessary condition for very high performance in new technological environments. Our results highlight how novelty combines effectively with other value drivers (in particular with efficiency) and strategies (in particular with differentiation) contingent on the intensity of competition, firm size, and firms' technological environment. Our study contributes to literature streams on value creation, business model design, and innovation.