6. Discussion and conclusion
Internationalization of the firm can be understood as an innovation decision process (Andersen, 1993; Johanson & Vahlne, 2009; Jones & Coviello, 2005). Existing research suggests organizational learning, innovation and internationalization are linked together in a complex way (Chiva et al., 2014). Business model innovation provides a new source of sustained value creation for firms therefore a source of future competitive advantage (Foss & Saebi, 2017). We argue that research into business model innovation in the host country for MNEs will provide new insights into internationalization process as business model innovation not only deal with views from the ‘supply side’ but also the ‘demand side’ (Massa et al., 2017).
However, on the question of whether there exists different patterns of business model innovation which enable the international firms to rebuild the core logic of their business model in host country, we note that little study is available (Schneider & Spieth, 2013). Our study focuses on the retail industry and analyses the data collected from 15 international retailers in China. Our findings reveal six potential routes of retail business model innovations: legitimatizing brand image in the local market; sharing resources within the group, transferring knowledge from headquarters; alliance with the local stakeholders; and imitating the local competitors; and new innovation for the local market. Apart from the new innovation for the local market, five of the six routes are exploitative business model innovations. From the organizational learning perspective, these six routes can be clustered into three patterns of resource deployment: extension of existing knowledge base, embedment with the local environment, and autonomic exploration of subsidiaries (see Fig. 3). The first two patterns (extension and embedment) are exploitative learning in nature, whereas the third pattern (autonomy) is explorative. These patterns provide novel insights into the nature of the internationalization process as “multilateral rather unilateral” as in the original model of Johanson and Vahlne (1977) and the process is “also inter-organizational and not just intraorganizational” (Johanson & Vahlne, 1990: 19). They also disclose different ways of MNEs which recognize and exploit opportunities together with or against their local partners in the host market, therefore addressing the call by Forsgren (2016: 1139) regarding how various “counteracting forces affect the shape and direction of the internationalization process.”
