Explicating the business model from a knowledge-based view: nature, structure, imitability and competitive advantage erosion

Purpose: The purpose of this paper is to conceptualize the business model (BM) from a knowledge-based view (KBV), to interpret its nature and knowledge structure and to investigate the relationship between its imitability and the erosion of firm’s competitive advantage. Design/methodology/approach: Based on a systematic literature review, this study builds an integrated framework to explicate the nature and structure of the BM from a KBV. Moreover, on the analysis of two contrasting cases, the argument concerning the relationship between BM imitability and its strategic value is proposed, analyzed and supported. Findings: The main finding of this study is that a BM can be viewed as a structured knowledge cluster that contains explicit and implicit parts. Its imitation is a dynamic process of knowledge diffusion across firm boundaries. Ceteris paribus, with a lower proportion of implicit knowledge, a BM is more likely to be imitated and the adopter’s competitive advantage is more likely to be eroded, and vice versa. Practical implications: The proposed framework could provide managers with a deeper understanding of the nature and structure of the BM and help potential adopters develop a successful entry strategy by avoiding BMs that seem profitable but are incapable of maintaining competitive advantage. Originality/value: As a complement to previous studies, the research conceptualizes the BM as a “structured knowledge cluster” to explicate its nature and knowledge structure from a KBV. The implicit part of the BM is explored, and its importance for the adopter’s competitive advantage is discussed and verified.