Living With Transformations of International Opportunities: Drivers of Business Model Change in Global Value Chains

Introduction

Discontinuities characterize the contemporary international business environment (McKinley, 2022), where digitalization, sustainability requirements, and other technological, social, and political developments introduce varying changes to how firms operate (Parida et al., 2019). For example, whereas offshoring to China once was a lucrative alternative, reshoring and re-internationalizing now occur in different forms (Ellram et al., 2013; Sort et al., 2021) together with the search for innovative and flexible business model designs (Brozovic, 2018; Sort & Turcan, 2019). The purposive search for flexibility in international business has been captured in discussions on global factories (Buckley & Ghauri, 2004; Buckley & Strange, 2015) that describe managers’ efforts to utilize optimal locations for their firms’ specific activities. The firms’ own actions play a notable role in the changes, not least because their R&D and innovation activities increasingly spread to different networks and ecosystems in varying locations, thereby giving a start to new, sometimes path-breaking developments across global value chains (e.g., Dedrick et al., 2010; Di Minin & Bianchi, 2011; Van Assche, 2017).

However, the patterns behind the strategic shifts are still not fully understood. Sort and Turcan (2019, p. 39) note that while existing research on business models (BM) extensively describes the business model changes connected to firm growth or disruption, “it is rather scarce on understanding how companies reinvent themselves and their BMs in situations such as de-investing, de-exporting, back-shoring or reshoring.” Hence, the considerable variation in response types at the market operation level is seldom covered, and little is known about the business opportunity level changes beneath the market and business model changes. We bring these elements together by examining how international opportunity transformations connect with market operation decisions driving together business model changes.

The changes in the business environment as well as within the firm may trigger planned and unplanned activities (Buckley & Casson, 1998) that involve “transforming the extant world into new possibilities” (Venkataraman et al., 2012, p. 26), thereby initiating new international business opportunities (Alvarez & Barney, 2007; Oviatt & McDougall, 2005). For example, the current technological developments make firms digitalize business functions and redesign their business models to seize new opportunities in the technologically mediated global markets (Hervé et al., 2020). Approaching changes from the opportunity viewpoint, we acknowledge that transformative processes are inherent in the long-term value creation of international firms. The transformative approach emphasizes the possibility of a total lack of connections, other than the history, between old and new opportunities and their relationships with the value-creation contexts (Venkataraman et al., 2012).