Global Strategy - blog

Authors:Järvensivu, Paavo and Laukkanen, Mikko (2006).Download file: 'Managerial Cognitions and Business Model Evolution in the Biotechnology Industry - Cases Amgen and Genentech.' Master's Thesis, Helsinki School of Economics HSE, Helsinki, Finland.

The Abstract

Objectives
The study aims to discover how business models have evolved in the biotechnology industry by analyzing two US-based case companies, Amgen and Genentech. Emphasis is put on managerial cognitions and their role in the coevolution of business models and the business environment.

The theoretical goals are to improve the existing business model framework, which was chosen as a starting-point, and to find compatible research methods.

Methodology
The study uses an abductive case approach, where theory is developed side-by-side with empirical analysis. The selected sources of information are the case companies’ annual reports, complemented with specialist interviews and articles from the public press. The research methodology comprises of mapping all relevant events in spreadsheets, creating narratives describing the business model evolution of the case companies, building learning paths consisting of signals, cognitions, strategies and actions, and finally combining the information under the business model framework. The framework offers a valuable tool for analyzing business model evolution, making possible a systematic comparison between different companies.

Results
The improved business model framework and the methodology used are found to enable the relevant analysis and description of the business model evolution of biotechnology companies. However, the analysis still requires extensive interpretation by researchers. Based on the study, researchers and business managers can learn to better appreciate and understand the role of managerial cognitions and the complex dynamics in the coevolution of business models and the business environment. The study identifies, analyzes and presents those factors that have had influence on the ways the business models of Amgen and Genentech have evolved over time. The differences discovered in the evolution processes also serve as a foundation for further research.

Keywords: Business model, managerial cognition, evolution, biotechnology, Amgen, Genentech