Business model of dependent firms: the Italian case

The business model seems to be a potential source of competitive advantage because it explains how a firm builds and uses its resources to create and capture value. However so far literature on business model and financial performance focus the attention on the “firm” as a unit of analysis without clearly define the boundaries of the economic entity to which they refer. The purpose of this paper is to answer the following research questions: what are the boundaries of the business model of dependent firms (i.e. firms that belong to the same business group)? How can be interpreted the relationship between business models and financial performances of those firms?. We use an exploratory multiple case study analysis of two Italian business groups. The analysis shows that business model of an affiliated–group company could be autonomous, partially autonomous or totally dependent on the business model of the wider business group. In this latter case, we can also say that the affiliated–firm is delegated to realise a part of the business model of whole group, considered as a single economic entity. As a consequence, the business model of the whole group might affect the financial performance of the dependent economic entities. Thus, the effort to study the relationship between business model and financial performance could be strongly biased if the boundaries of the underpinned economic entity are not clearly defined