Early Business Model for the Orchestrator of a repurposing Ecosystem at the Bottom of the Pyramid

Publication Type:

Conference Paper

Source:

Gerpisa colloquium (2024)

Abstract:

Early Business Model for the Orchestrator of a repurposing Ecosystem at the Bottom of the Pyramid

Purpose
The global economy's growth is influenced by emerging markets, necessitating unique business models due to diverse institutional contexts and low consumer incomes at the "bottom of the pyramid" (BOP) (Dentchev et al., 2022; Ghauri et al., 2021). Business models aiming at social and economic impact, like BOP 2.0 and 3.0, emphasize sustainability and collaboration among BOP communities, NGOs, and multinational companies. Repurposing business models offer sustainable benefits and align with international management discussions (Ciambotti & Pedrini, 2021; Dentchev et al., 2022; Hansen & Revellio, 2020; Lashitew et al., 2022). This paper proposes a framework for an early business model for the orchestrator of a repurposing ecosystem at the BOP, which is exemplified through a case study on using second-life car batteries for solar storage in remote Amazon regions. The paper aims to refine the framework through the case study, contributing to the design of sustainable BOP business models, with implications for business model theory and practical application in emerging markets.

Design
The study employs a single case study methodology to explore the design of an early business model for the orchestrator of a repurposing ecosystem at the bottom of the pyramid, focusing on the second-life use of car batteries for solar storage in remote Amazon regions (Maruster, 2013; Yin, 2009). Drawing from a multi-method approach, including interviews, surveys, and literature reviews, the research aims to understand the components and interactions of such models. Methodologically, the study follows an explanatory framework, systematically analyzing data across nine categories to develop a streamlined business model (Johnson et al., 2007). The potential application in remote villages highlights the economic challenges of electricity provision and the social opportunities presented by solar power and second-life battery storage systems. The proposed operating model demonstrates profitability and sustainability for stakeholders involved, including local inhabitants, governments, orchestrators, battery manufacturers, refurbishment enterprises, and energy providers, fostering a symbiotic relationship and equitable value distribution.

Findings
The draft of an early repurposing business model for using car batteries in solar storage to secure energy supply in remote Amazon areas is designed based on Amit and Zott's framework (Amit & Zott, 2015). It focuses on creating and capturing value by maximizing the difference between willingness to pay and opportunity costs, primarily through exploiting low factor costs and regulatory support (Brandenburger & Stuart, 1996). The model targets a break-even point within three years, transitioning from diesel power to sustainable energy sources. Stakeholder activities are crucial, with residents benefiting from improved living conditions, businesses gaining a competitive edge, manufacturers expanding production capacities, and governments promoting regional development. The model offers a transformative approach, balancing economic viability with environmental sustainability and fostering collaborative ecosystems in emerging markets. Stakeholder activities play a pivotal role in enhancing complementarities and design within the ecosystem, ultimately contributing to improved energy access and socio-economic development in remote regions of the Amazon.

Practical and theoretical implications
The study suggests an iterative approach to business model design, starting with broad conceptualization and evolving into detailed models within ecosystems. It emphasizes the importance of anticipating the dynamic evolution of the business model and continuous refinement to navigate the complexities of the business landscape effectively. The transition from early to detailed business models involves elaboration and adjustment based on feedback loops and market analyses. This forward-thinking perspective enhances the understanding of business model dynamics and offers practical implications for organizations. Integrating solar energy and second-life batteries into business operations aligns with sustainability practices, offering cost savings, regulatory compliance, and market differentiation (Bartolucci et al., 2023; Gatignon, 2022; Wang et al., 2023). Despite upfront costs, these solutions yield long-term benefits, positioning companies for success in contemporary business environments (Jeppe et al., 2023; Terkes et al., 2023).

References
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