COVID 19 – The External Economic Shock: Changing the Business Models
DOI:
https://doi.org/10.6092/issn.2036-5195/13182Keywords:
Business model, External shock, Pandemic, “Polar business models”, Beta business modelsAbstract
This essay examines the issue of changing business models as a result of the Covid pandemic, with an attention on business models in the tourism sector. A similar change is historically tangible after a massive external shock to the economy. The terms "external shock to the economy" and "pandemic" as an external economic shock have been clarified. The paper examines significant historical cases and periods in which a general and radical change took place, and the renewal of the business environment and business models as a result of external shocks to the economy. The view is presented that the Covid pandemic as an external shock is a catalyst for a change of environment and change of business models, leading to the forefront in the practice of new business models.
The hypothesis of possible polar business models is considered, based on a summary of distant historical and recent experience in the specific business ecosystem and the algorithm of change. As a result of the study, it was concluded that the change, including in the business models including those in the tourism sector, will most likely require the implementation of self-created club beta versions and "ambidextrous" business models on the one hand and business models based on state entrepreneurship. Both polar business models are emerging from social trends.
References
: Worst Year in Tourism History with 1 Billion Fewer International Arrivals. (2021, January 28), (pp. 4, 6, 8, 9). UNWTO. https://www.unwto.org/news/2020-worst-year-in-tourism-history-with-1-billion-fewer-international-arrivals
Accenture Strategy. (2014). Circular advantage innovative business models and technologies to create value in a world without limits to growth. Acenture. https://www.accenture.com/t20150523T053139__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_6/Accenture-Circular-Advantage-Innovative-Business-Models-Technologies-Value-Growth.pdf
Airbnb, Inc. (2020, December). FORM 10-K. United States Securities and Exchange Commission, (pp. 3, 12, 17). Washington, D.C. 20549. https://s26.q4cdn.com/656283129/files/doc_financials/2020/q4/84dcc076-235d-4520-805c-0e64b6fe8c40.pdf
Andrianto, T., Koseoglu, M. A., & King, B. (2021). A business model innovation process for tourism: findings from a literature review. Tourism Recreation Research, 1–8. https://doi.org/10.1080/02508281.2021.1878654
Andriopoulos, C., & Lewis, M. W. (2009). Exploitation-Exploration Tensions and Organizational Ambidexterity: Managing Paradoxes of Innovation. Organization Science, 20(4), 696–717. https://doi.org/10.1287/orsc.1080.0406
Arts, O. (2017, February 2). New Business models for this decade (beta). Slidesshare. https://www.slideshare.net/oukearts/10-new-business-models-for-this-decade
Baldarelli, M. G. (2011). Le aziende dell’economia di comunione. Mission, governance e accountability. (2011). Città Nuova.
Baldarelli, M. G., del Baldo, M., & Ferrone, C. (2015). The Relationships Between CSR, Good Governance and Accountability in the Economy of Communion (EoC) Enterprises. In Economy of communion enterprises: mission, governance and accountability (pp. 3–38). Springer Publishing. https://doi.org/10.1007/978-3-319-10909-1_1
Barbrook, R. (1998). The Hi-Tech Gift Economy. First Monday, 3(12). https://doi.org/10.5210/fm.v3i12.631
Baulant, M. (1971). Le salaire des ouvriers du bâtiment à Paris de 1400 à 1726. Annales: Histoire, Sciences Sociales, 26(2), 463–483.
Brown, E. H. P., & Hopkins, S. V. (1956). Seven Centuries of the Prices of Consumables, Compared with Builders’ Wage- Rates. Economica, 23(92), 296. https://doi.org/10.2307/2551457
Brown, E. H. P., & Hopkins, S. V. (1957). Wage-Rates and Prices: Evidence for Population Pressure in the Sixteenth Century. Economica, 24(96), 289. https://doi.org/10.2307/2550419
Bruton, G., Khavul, S., Siegel, D., & Wright, M. (2015). New Financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer–to–Peer Innovations. Entrepreneurship Theory and Practice, 39(1), 9–26. https://doi.org/10.1111/etap.12143
Buchanan, J. M. (1965). An Economic Theory of Clubs. Economica, 32(125). https://doi.org/10.2307/2552442
Business Model Navigator. (2021, January 1). Business Model Navigator. https://businessmodelnavigator.com
Chertow, M. R. (2008). “Uncovering” Industrial Symbiosis. Journal of Industrial Ecology, 11(1), 11–30. https://doi.org/10.1162/jiec.2007.1110
Chistyakova, E. V. (1975). Urban uprisings in Russia in the first half of the 17th century (1st ed., Vol. 1), (pp. 49). Voronezh.
Choudhury, S. (2021, April 28). from Social Media To The Sharing Economy: The Three Drivers Of Business Disruption. Platform Thinking Labs – Platform Strategist. https://platformthinkinglabs.com/materials/social-media-sharing-economy-platforms/
Coronavirus: Effect of the Epidemic on Contractual Obligations. (2020, April 6). Deloitte Serbia. https://www2.deloitte.com/rs/en/pages/risk/articles/coronavirus-effect-of-the-epidemic-on-contractual-obligations.html
Epidemic. (n.d.). In Dictionary Merriam Webster. Merriam-Webster Inc. Retrieved July 12, 2021, from https://www.merriam-webster.com/dictionary/epidemic
Epidemic. (1989). In Oxford University & L. Brown (Eds.), New Shorter Oxford English Dictionary. Oxford University Press. https://play.google.com/store/apps/details?id=com.mobisystems.msdict.embedded.wireless.oxford.shorterenglish&hl=en_US&gl=US
Estellés-Arolas, E., & González-Ladrón-de-Guevara, F. (2012). Towards an integrated crowdsourcing definition. Journal of Information Science, 38(2), 189–200. https://doi.org/10.1177/0165551512437638
Eurostat. (2019-2021). Tourism statistics - characteristics of tourism trips - Statistics Explained [Dataset]. Eurostat.
Fischer, A., Dewatripont, M., & Goldman, M. (2019). Benefit Corporation: a path to affordable gene therapies? Nature Medicine, 25(12), 1813–1814. https://doi.org/10.1038/s41591-019-0676-z
Fogel, R. W. (1993a, March 11–May 13). A comparison of biomedical and economic measures of egalitariansim: Some implications of secular trends for current policy. [Workshop]. Workshop on Economic Theories of Inequality, Stanford University, USA.
Fogel, R. W. (1993b, December 9). Economic Growth, Population Theory, And Physiology: The Bearing Of Long-Term Processes On The Making Of Economic Policy, Nobel Lecture, 9 December [Slides]. The Nobel Prize. https://www.nobelprize.org/uploads/2018/06/fogel-lecture.pdf
Fogel, R. W. (1994). Economic Growth, Population Theory, and Physiology: The Bearing Of Long-Term Processes On The Making Of Economic Policy. National Bureau Of Economic Research Working Paper Series, No. 4638, 1–50. https://www.nber.org/system/files/working_papers/w4638/w4638.pdf
Fogel, R. W. (2000). The Fourth Great Awakening and the Future of Egalitarianism (1st ed.). University of Chicago Press.
Friedman, A. (2017, May). Evolving the capital markets ecosystem | The World Federation of Exchanges. World Federation of Exchange. https://focus.world-exchanges.org/articles/evolving-capital-markets-ecosystem
Gassmann, O., Csik, M., & Frankenberger, K. (2014). The Business Model Navigator: 55 Models That Will Revolutionise Your Business (1st ed.), FT Press, 5-12.
Gassmann, O., Frankenberger, K., & Csik, M. (2012). The St. Gallen Business Model Navigator, Working Paper. Working Paper University of St. Gallen. Published. https://www.thegeniusworks.com/wp-content/uploads/2017/06/St-Gallen-Business-Model-Innovation-Paper.pdf
Gebauer, H., Saul, C. J., Haldimann, M., & Gustafsson, A. (2017). Organizational capabilities for pay-per-use services in product-oriented companies. International Journal of Production Economics, 192, 157–168. https://doi.org/10.1016/j.ijpe.2016.12.007
Genc, R. (2020). The Impact of Business Model Innovation on Sustainable Tourism. The Gaze: Journal of Tourism and Hospitality, 11(1), 1–9. https://doi.org/10.3126/gaze.v11i1.26610
Gilani, N. M. (2020, April 9). Letter: A new social contract will meet resistance. Financial Times. https://www.ft.com/content/b93075ec-759d-11ea-ad98-044200cb277f
Gnos, M. (2020, December 18). The 5 Business Model Patterns You Should Follow in 2021. Business Model Innovation Lab | BMI Lab | Spinoff from the University of St.Gallen. https://bmilab.com/blog/2020/12/18/the-5-business-model-patterns-you-should-follow-in-2021
Goodyear, J. D. (1978). The sugar connection: a new perspective on the history of yellow fever. Bulletin of the History of Medicine, 52(1), 13–14.
Google Inc. (n.d.). Books Ngram Viewer. Google Books Ngram Viewer. Retrieved July 10, 2021, from https://books.google.com/ngrams/graph?content=taxation%2C+tax&year_start=1800&year_end=2019&corpus=26&smoothing=3&direct_url=t1%3B%2Ctaxation%3B%2Cc0%3B.t1%3B%2Ctax%3B%2Cc0
Grab, B., Bumbac, R., Gavril, R., & Ilie, C. (2018, June). The winner takes it all - Business model innovation in the tourism industry. Conference: 4th BASIQ International Conference on New Trends in Sustainable Business and Consumption, Projects: Research on collaborative networks and management practices in connection to sustainable business. Digitization and Strategic Management, Heidelberg, Germany. https://www.researchgate.net/publication/325896837_The_winner_takes_it_all_-_Business_model_innovation_in_the_tourism_industry
Guido, A., & Ó Gráda, C. (Eds.). (2017). Famine in European History Cambridge (1st ed.). Cambridge University Press. https://doi.org/10.1111/padr.12139
Gürlek, M. (2021). Effects of high-performance work systems (HPWSs) on intellectual capital, organizational ambidexterity and knowledge absorptive capacity: evidence from the hotel industry. Journal of Hospitality Marketing & Management, 30(1), 38–70. https://doi.org/10.1080/19368623.2020.1774029
Gutieres, A. (2020, July 27). Secretary-General’s Nelson Mandela Lecture: “Tackling the Inequality. United Nations Secretary-General. https://www.un.org/sg/en/content/sg/statement/2020-07-18/secretary-generals-nelson-mandela-lecture-%E2%80%9Ctackling-the-inequality-pandemic-new-social-contract-for-new-era%E2%80%9D-delivered
Haddawy, P., Cheng, C., Rujikeadkumjorn, N., & Dhananaiyapergse, K. (2005). Optimizing ad hoc trade in commercial barter trade exchange. Electronic Commerce Research and Applications, 4(4), 299–314. https://doi.org/10.1016/j.elerap.2005.06.001
Hays, J. N. (2005). Epidemics and Pandemics: Their Impacts on Human History (1st ed.). ABC-CLIO.
Hornby, A. S., & Cowie, A. P. (1995). Epidemic. In Oxford advanced learner’s dictionary. Oxford University Press. https://www.oxfordlearnersdictionaries.com/definition/english/epidemic_1?%20Q%20=%20epidemic
Hornby, A. S., & Cowie, A. P. (1995). Pandemic. In Oxford advanced learner’s dictionary. Oxford university press. https://www.oxfordlearnersdictionaries.com/definition/english/pandemic_1?q=pandemic
Hunkar, D. (2018, October 19). Market Cap of Tech Companies vs. GDP of Countries | TopForeignStocks.com. topforeignstocks.com. https://topforeignstocks.com/2018/10/19/market-cap-of-tech-companies-vs-gdp-of-countries/
Is Mettle right for you? | Eligibility criteria | Mettle. (n.d.). Mettle. Retrieved July 13, 2021, from https://www.mettle.co.uk/eligibility/
Israel, S. (2020, October 30). The Number Of Companies Publicly Traded In The US Is Shrinking—Or Is It? MarketWatch. https://www.marketwatch.com/story/the-number-of-companies-publicly-traded-in-the-us-is-shrinkingor-is-it-2020-10-30?mod=investing
Jabłoński, A., & Jabłoński, M. (2019). Social Business Models in the Digital Economy: New Concepts and Contemporary Challenges (1st ed. 2020 ed.), Palgrave Macmillan, 1, 49. https://doi.org/10.1007/978-3-030-29732-9
Lalitsethi. (2021, January 26). The IMF Chief Project forecasts global economic growth of 5.5% in 2021 and states all the steps needed for the deck to recover the pandemic. India News Republic. https://indianewsrepublic.com/the-imf-chief-project-forecasts-global-economic-growth-of-5-5-in-2021-and-states-all-the-steps-needed-for-the-deck-to-recover-the-pandemic/171769/
Last, J. M. (2001). Pandemic. In A dictionary of epidemiology (4th ed.). Oxford: Oxford University Press. https://doi.org/10.1093/aje/154.1.93-a
Lehner, O. M. (2013). Crowdfunding social ventures: a model and research agenda. Venture Capital, 15(4), 289–311. https://doi.org/10.1080/13691066.2013.782624
Leontief, W., Walras, L., & Jaffe, W. (1955). Elements of Pure Economics or the Theory of Social Wealth. Southern Economic Journal, 22(2), 50–81. https://doi.org/10.2307/1054717
Linz, C. (2020, November 6). How to transform your business model for a post-COVID future. World Economic Forum. https://www.weforum.org/agenda/2020/11/transform-business-model-post-covid-future/
Manolova - Nikolova, N. (2016). For cholerates in the Ottoman empire at 60th years in the Nineteenth century. In Collection in Honor to Professor Maria Radeva (1st ed., Vol. 1, pp. 235–244). University “St. Kl. Ohridski.”
Marinov, M. A., & Marinova, S. T. (2020). Covid-19 and International Business: Change of Era (Routledge Frontiers in the Development of International Business, Management and Marketing) (1st ed.). Routledge.
Marriot International. (2020, December). Annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934 for the fiscal year ended december 31, 2020. United states securities and exchange commission Washington, D.C. 20549. (p. 32). https://marriott.gcs-web.com/static-files/b82978a6-9d28-4e38-9855-fc4ae2cebe11
Matook, S., & Vessey, I. (2008). Types of business-to-business e-marketplaces: The role of a theory-based, domain-specific model. Journal of Electronic Commerce Research, 9(4), 260–279.
Megaw, N. (2019, November 27). RBS launches Bó as rival to digital bank start-ups. Financial Times. https://www.ft.com/content/a459b2c8-1120-11ea-a225-db2f231cfeae
Morgan, J. (2008, July 19). How Do You Define “Beta?” Is Your Company in Beta? https://thefutureorganization.com/how-do-you-define-beta-is-your-company-in-beta/
Neal, L. (2000). How it all began: the monetary and financial architecture of Europe during the first global capital markets, 1648–1815. Financial History Review, 7(2), pp., 117–140. https://doi.org/10.1017/s0968565000000081
North, D. C. (2005). Understanding the Process of Economic Change (The Princeton Economic History of the Western World, 32), (pp. 23 – 37, 48). Princeton University Press.
North, D. C., & Thomas, R. P. (2012). The Rise of the Western World: A New Economic History. Cambridge University Press.
Obeid, Z., & Khalife, H. (2020, June 1). COVID-19: impact on contractual obligations. Lexology.
Ojeda, M. U., Chai, L., Elliott, G., & Harradine, D. (2020, April 14). COVID-19: A time for transformation and thinking for the future. KPMG. https://home.kpmg/au/en/home/insights/2020/04/Covid-19-coronavirus-digital-transformation-for-sme.html
O’Reilly, C. A., & Tushman, M. L. (2011). Organizational Ambidexterity in Action: How Managers Explore and Exploit. California Management Review, 53(4), 5–22. https://doi.org/10.1525/cmr.2011.53.4.5
O’Reilly III, C., & Tushman, M. (2004). The Ambidextrous Organization. Harvard Business Review, 4(1), 1–10. http://www.iot.ntnu.no/innovation/norsi-pims-courses/tushman/O%C3%86Reilly%20&%20Tushman%20(2004).pdf
Organization for Economic Cooperation and Development. (2011). OECD Reviews Of Risk Management Policies: Future Global Shocks Improving Risk Governance. Organization For Economic Cooperation & Development.
Organization for Economic Cooperation and Development. (2020). Tourism Policy Responses to the coronavirus (COVID-19). OECD Policy Responses to Coronavirus (COVID-19). p. 4. Published. https://read.oecd-ilibrary.org/view/?ref=124_124984-7uf8nm95se&title=Covid-19_Tourism_Policy_Responses
Oxford University. (1993). Epidemic. In New Shorter Oxford English Dictionary. Oxford University Press.
Pandemic. (n.d.). In Merram Webster Dictionary. Merriam Webster Dictionary. Retrieved July 12, 2021, from https://www.merriam-webster.com/dictionary/pandemic
Park, Y., Pavlou, P. A., & Saraf, N. (2020). Configurations for Achieving Organizational Ambidexterity with Digitization. Information Systems Research, 31(4), 1376–1397. https://doi.org/10.1287/isre.2020.0950
Paunov, C. (2012). The global crisis and firms’ investments in innovation. Research Policy, 41(1), 24–35. https://doi.org/10.1016/j.respol.2011.07.007
Powell, J. (2004). FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (Reprint ed.). Crown Forum.
Reim, W., Parida, V., & ÖRtqvist, D. (2015). Product–Service Systems (PSS) business models and tactics – a systematic literature review. Journal of Cleaner Production, 97, 61–75. https://doi.org/10.1016/j.jclepro.2014.07.003
Reinhold, S., Zach, F. J., & Krizaj, D. (2017). Business models in tourism: a review and research agenda. Tourism Review, 72(4), 462–482. https://doi.org/10.1108/tr-05-2017-0094
Rosca, E., Arnold, M., & Bendul, J. C. (2017). Business models for sustainable innovation – an empirical analysis of frugal products and services. Journal of Cleaner Production, 162, S133–S145. https://doi.org/10.1016/j.jclepro.2016.02.050
Sahebalzamani, S., & Bertella, G. (2018). Business Models and Sustainability in Nature Tourism: A Systematic Review of the Literature. Sustainability, 10(9), 3226, 6. https://doi.org/10.3390/su10093226
Scasciamacchia, S., Serrecchia, L., Giangrossi, L., Garofolo, G., Balestrucci, A., Sammartino, G., & Fasanella, A. (2012). Plague Epidemic in the Kingdom of Naples, 1656–1658. Emerging Infectious Diseases, 18(1), 186–188. https://doi.org/10.3201/eid1801.110597
Schwab, K., & Vanham, P. (2021a). Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet (1st ed.). (p. 1-3). Wiley.
Schwab, K., & Vanham, P. (2021b, January 26). Stakeholder capitalism, shareholder capitalism and state capitalism. World Economic Forum. https://www.weforum.org/agenda/2021/01/what-is-the-difference-between-stakeholder-capitalism-shareholder-capitalism-and-state-capitalism-davos-agenda-2021
Sigala, M. (2007, January). Web 2.0 in the tourism industry: a new tourism generation and new e-business models. Research Gate. https://www.researchgate.net/publication/228437016_Web_20_in_the_tourism_industry_a_new_tourism_generation_and_new_e-business_models
Simsek, Z. (2009). Organizational Ambidexterity: Towards a Multilevel Understanding. Journal of Management Studies, 46(4), 597–624. https://doi.org/10.1111/j.1467-6486.2009.00828.x
Smith, W. D. (1984). The Function of Commercial Centers in the Modernization of European Capitalism: Amsterdam as an Information Exchange in the Seventeenth Century. The Journal of Economic History, 44(4), 985–1005. https://doi.org/10.1017/s0022050700033052
Stoneman, A. J. (2015). Socialism with a human face: the leadership and legacy of the Prague Spring. The History Teacher, 49(1), 103–125. https://www.nhd.org//sites/default/files/Stoneman_Senior_StanfordUniversityOnlineHighSchool_Wisconsin.compressed.pdf
Taleb, N. N. (2007). The Black Swan: The Impact of the Highly Improbable (Incerto) (Annotated ed.). Random House.
Teschke, B. (2009). The Myth of 1648: Class, Geopolitics, and the Making of Modern International Relations (2nd ed.) (p. 30). Verso.
Tikhomirov, M. N., & Epifanov, P. P. (Eds.). (1961). Sobornoe ulojenie ot 1694 (Cathedral code from 1694) (1st ed., Vol. 1). Publishing house Moscow University. http://www.hist.msu.ru/ER/Etext/1649/whole.htm
Tilly, C. (1984). Demographic origins of the european proletariat, draft of paper to appear. In D. Levine (Ed.), Proletarianization and Family History (Studies in Social Discontinuity) (1st ed., Vol. 1, 3–14). Michigan: Academic Press- University of Michigan.
Trenz, M., Frey, A., & Veit, D. (1918). Disentangling the facets of sharing: A categorization of what we know and don’t know about the Sharing Economy. Internet Research (INTERNET RES), 28(4), 888–925. https://www.researchgate.net/publication/325827097_Disentangling_the_facets_of_sharing_A_categorization_of_what_we_know_and_don’t_know_about_the_Sharing_Economy
Unemployment Rates, Organization for Economic Cooperation and Development - Updated: October 2020 - OECD. (2020, October 12), 1. Paris.
https://www.oecd.org/newsroom/unemployment-rates-oecd-update-october-2020.htm
United Nations Conference on Trade and Development. (2020, December 9). COVID-19 drives large international trade declines in 2020 | UNCTAD. UNCTAD.
https://unctad.org/news/covid-19-drives-large-international-trade-declines-2020
UNWTO. (2019). New Business Models in the Accommodation Industry – Benchmarking of Rules and Regulations in the Short-term Rental Market, Executive Summary. World Tourism Organization ( UNWTO ). https://doi.org/10.18111/9789284421190
van der Wee, H. (1963). The Growth of the Antwerp Market and the European Economy. Cham: Springer Publishing.
Walras, L. (2010). Elements of Pure Economics (1st ed.), UK: Routledge.
Webster, S., & Mitra, S. (2007). Competitive strategy in remanufacturing and the impact of take-back laws. Journal of Operations Management, 25(6), 1123–1140.
https://doi.org/10.1016/j.jom.2007.01.014
Wichowski, A. (2020). The Information Trade: How Big Tech Conquers Countries, Challenges Our Rights, and Transforms Our World (Illustrated ed.). HarperOne.
Winkler, H. (2011). Closed-loop production systems—A sustainable supply chain approach. CIRP Journal of Manufacturing Science and Technology, 4(3), 243–246. https://doi.org/10.1016/j.cirpj.2011.05.001
World Bank Group, & Bakker, M. (2018). Tourism and the Sharing Economy: Policy and Potential of Sustainable Peer-to-Peer Accommodation. World Bank. http://hdl.handle.net/10986/30452
World Health Organization. (2020, March 12). What is a pandemic? https://www.who.int/csr/disease/swineflu/frequently_asked_questions/pandemic/en/
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Ninel Nesheva-Kiosseva
This work is licensed under a Creative Commons Attribution 3.0 Unported License.
