Power Battles and the Emergence of New Industries: The Case of Mobile Payment Services
Speaker
Abstract
| Market emergence and industry architecture are topics of great interest to organizational researchers. While earlier works assume that markets always existed, recent works have started to explore the process through which new markets come into existence and mature. To answer the question of how firms agree upon a business model in emerging industries, we carried out a multiple-case inductive study of the mobile payment industry, an industry that emerged in late 1999 to enable payments using mobile phones using a new contactless technology (NFC). |
| We find that while the technology existed since the late 90’s, the commercialization did not take place until today because the interested parties (banks, mobile operators, handset makers, merchants, and software and hardware developers) could not agree on a business model. Specifically, the most powerful players among these, mobile operators and banks, coming from central roles in their respective traditional industries, entered a decade-long battle regarding the most beneficial business model for themselves. We observed that in geographic regions (e.g. Japan, rural Africa or India) where one of the players, either the bank or the mobile operator, was more powerful that the other, commercialization happened much faster compared to regions (e.g. Europe and US) where the players were equally powerful. |
| Overall, we find that new industry development can stall for long periods due to the negotiation of the players on a business model. The result of this negotiation largely depends on the power balance of the parties where, contrary to prior literature, fewer powerful players advocating the new industry works better than many. |
| Dr. Pinar Ozcan is Assistant Professor in Strategic Management at IESE Business School in Barcelona, Spain. She specializes in strategy, entrepreneurial growth, and the emergence of new technology markets. Her recent research focuses on how entrepreneurial firms grow by building an effective partner ecosystem (alliance portfolio) leveraging opportunities that are present in nascent markets that are highly dynamic and ambiguous. She finds that entrepreneurial firms with low power and legitimacy go through spiral of growth, as their alliance portfolio coevolves with the firm's overall performance. This phenomenon helps explain the exponential growth or decline that we observe in nascent markets. |
| Dr. Ozcan completed her Ph.D. at the Stanford Technology Ventures Program (STVP) at the Stanford University Management Science and Engineering Department, and also holds a Master of Science and dual Bachelors degrees from Stanford. At Stanford, Dr. Ozcan directed the AEA Stanford Executive Institute, a summer executive program for the high tech industry for three consecutive years. She also organized the Stanford Entrepreneurship Thought Leaders Seminar for young entrepreneurs, and helped create the STVP Entrepreneurship Educators Project for entrepreneurship educators worldwide. Dr. Ozcan serves as full faculty at the National Arts Strategies Executive Program on Creative Alliances since 2004. |
| Dr. Ozcan's work experience includes management consulting at Siemens Corporation in Munich, Germany, and strategy consulting with technology ventures and venture capital firms in the Silicon Valley. |
| Dr. Ozcan is from Istanbul, Turkey. She is fluent in English, German, and Turkish, and also speaks Spanish and French. |
| Contact information: |
| Mahmut Ozdemir |
