The open-combined business model, strategies, and a firm's dynamic capability in the electronics industry [electronic resource]
Keywords: Management Science and Engineering.

This research examined strategies and conditions under which a firm in a newly industrialized country (NIC) became a global company which has maintained a strong competitive position and relatively secure financial performance in the electronic components and consumer electronics industry. This study particularly focused on the relationship between firms' business models and their successes, and analyzed the performance of firms following different business models in the electronics industry. We introduce the open-combined business model (OCBM)--which includes both electronic components and consumer electronics businesses in a single company but is also open to selling its core components to other firms--and investigate competitive advantages of the firm with the OCBM in the electronics industry. The dissertation starts with an in-depth case study of Samsung Electronics--which is an excellent example of a successful firm that began in an NIC--to find empirical evidence by investigating the history of its business model development, vision, management, working culture, and business areas together with various financial results. Then the study qualitatively analyzes the role of a firm's specific business model and its balancing strategies in developing dynamic capability by analyzing the case of Samsung Electronics. We argue that Samsung Electronics' outstanding success is due to its use of the OCBM with three balancing strategies--cooperation vs. competition, exploration vs. exploitation, and innovation vs. imitation. The dissertation also quantitatively analyzes the capability and characteristics of firms following different business models under changing environmental conditions in the evolution of the electronics industry. We use the "history-friendly" simulation model--which is an agent-based stochastic simulation model to explain qualitative theories about mechanisms and factors affecting the evolution of the industry. We find that changes in the environmental conditions--the increase of the market size in the components industry and the increase of integration technology intensity in consumer electronics--differently affected the growth of the manufacturing capability and integration capability of firms following different business models. In particular, these changes were most beneficial to the firm with the OCBM thanks to its internal and external dynamics, which allowed it to enhance its dynamic capabilities and to maintain a strong performance in the evolution of the electronics industry. This study contributes to the literature on success of incumbent firms by elaborating on the link between a firm's business model and dynamic capabilities, and by examining the competition of firms following different business models under changing environmental conditions. This study also contributes to the theories of a firm's success in NICs by providing a new approach to answering the question of how successful firms in NICs adapt to the changing environmental conditions and have relatively stable financial performance. It also contributes to the "history-friendly" model literature by identifying complex internal and external dynamics among business models, synergy effects, and environmental condition changes as successful factors in the evolution of the electronics industry. Finally, this study contributes to the categorization of business models by defining the open-combined business model (OCBM) as a new category and by analyzing its benefits of openness and combined businesses.