How industry recipe and boundary belief influence similar modular business model innovations

Abstract

This study attempts to use a decision-making approach to explore how industry recipes and boundary beliefs influence similar modular business model innovations (BMIs) among over-the-top (OTT)-service providers. Industry recipes and boundary beliefs fundamentally define the practice and structure of an industry, respectively. Therefore, this study aims to expand the theoretical understanding of how similar modular BMIs influence the industrial effect on the managerial cognitive perspective. To this end, this study examined the modular BMI of two OTT-service providers' value creation and value capture. A comparative and qualitative case study was conducted that mainly collected secondary data on the rigorous usage of the triangulation technique. Confirmatory interviews with managers in two OTT-service providers were also conducted to complement the analytical results obtained from the template analysis. First, the results show that the emergence of two similar modular BMIs—both involving value capture—was influenced by the industry recipe and the boundary recipe. However, when there was no industry recipe, the managerial cognition on boundary belief influenced similar modular BMIs of value creation. These results highlight that managerial cognition regarding boundary belief can guide the selection of technology for the modular BMIs of value creation. Secondly, this study finds that managerial cognition regarding industry recipe and boundary belief influence the choice of learning approach. Each of the modular BMIs demonstrated incremental or radical learning in each firm, because the presence of an industry recipe reduces the ambiguity of the modular BMI of value capture along with each firm's experiences.

Keywords

• Modular business model innovation
• Managerial cognition
• Industry recipe
• Boundary belief
• Over-the-top (OTT) service provider