Institutional voids and business model innovation in Africa: the role of nonmarket market strategy

Abstract

While business model innovation and nonmarket strategy have received extensive coverage in the international business literature, their inter-relationship has been overlooked. In this study, we investigate how multinational firms leverage nonmarket strategy to innovate their business models in institutionally challenging contexts. Using data from Jumia, Africa’s largest e-commerce multinational firm, we identify the institutional voids that constrain e-commerce and unpack the process through which the firm innovated its business model accordingly. Importantly, we also show how Jumia used nonmarket strategy to shape its institutional environment to facilitate a successful deployment of its business model. Overall, this study shows that nonmarket strategy complements and paves the way for model innovation, especially in underdeveloped contexts where formal and informal institutional support is required to guarantee the viability of business models that are incompatible with existing institutional conditions.

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ORCID for Augustine Awuah Peprah: orcid.org/0000-0002-6497-9161

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