Issue 4, 2017

Migol E. V., Tretyak O. A. Business Models and Financial Performance of Companies: Th e Russian Market of Electronics and Home Appliances.

Recent advances in communication and information technologies have allowed companies to introduce new business models (BM) by implementing subjects of process, product and organizational innovation and involving new forms of cooperation and collaboration. All of this brings evidence to the fact that the Internet with its dynamic, rapid growth and highly competitive characteristics creates new ways of making a profit for the companies and makes it possible to construct new platforms for novel business models. There are currently an increasing number of publications in the sphere of business models. Due to BM-related issues being relatively new in academic research, there is still a lack of one common methodology for the analysis of this construct. The purpose of this paper is to investigate the question of correlation between BM and company’s financial results. We take Russian retail companies that specialize in home appliances and electronic products as the subject of our study, assuming that these companies are more likely to use and implement the advances of information technologies and experiment with their business models. Building on existing literature, we conceptualize a firm’s business model as a number of interdependent activities that describe the sources of firm’s value creation — novelty, lock-in, complementarities and efficiency. The next step is to explore their connections with the firms’ financial performance. The empirical results show that there is a statistical correlation between novelty-centered BM and financial results. The paper is limited to one certain segment of the market: retail firms that specialize in home appliances and electronics. Keywords: business model, value chain, value co-creation, sources of value creation, financial results, market of electronic products and home appliances, Russia.

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