web viewat the same time, another intense debate has taken place among strategy scholars about the...
TRANSCRIPT
Voluntary Disclosure of the Business Model in Italian IPO Prospectuses: a Comparative Analysis
Carlo BagnoliDept. of Management
Università Ca’ Foscari, [email protected]
Giulia RedigoloDept. of Management
Università Ca’ Foscari, [email protected]
ABSTRACT
How do companies to be listed actually deal with voluntary disclosure of their business model? Is it true that firms with greater knowledge-based resources and technological innovation endowments have a lower propensity to adopt fully open communication behaviors? This paper aims to identify the voluntary disclosure choices adopted by three Italian companies in their Initial Public Offering (IPO) prospectuses to investigate whether any differences may depend on the type of innovation underlying each business model. A series of interviews conducted with the top management allows to understand more deeply the business model of each company. Further, a content analysis is performed to compute a measure of disclosure and point out the strategic concepts and their relevance. The study provides evidence that companies with a business model based on technology-push innovation have a lower propensity to full disclosure of their intangible components, particularly of those mainly based on knowledge as these are also invisible. The study aims to make a contribution to the ongoing debate on business and financial reporting.
KEYWORDS: Voluntary Disclosure, Initial Public Offering (IPO), Business Model, Innovation, Intangible Resources.
1
Voluntary Disclosure of the Business Model in Italian IPO Prospectuses: a Comparative Analysis
1. INTRODUCTION
In recent years, there has been a strong debate among business and financial
reporting scholars on the role of mandatory financial reporting with respect to the
emergent knowledge economy based on innovation. Many of them agree on the
limits of such information in enabling the effective communication of the even more
complex firm’s value creation mechanisms (Francis and Shipper, 1999; Lev and
Zarowin, 1999), leading to emphasize the importance of voluntary disclosure of
intangible resources since they are key drivers for product and process innovation
(Leitner, 2011; Subramaniam and Youndt, 2005).
At the same time, another intense debate has taken place among strategy scholars
about the relative importance of product and process innovation compared to
business model innovation. More and more management scholars believe the latter to
be at least as important as the more traditional product and process innovation
(Govindarajan and Gupta, 2001; Markides, 1997). However this debate is quite
recent and has been highlighted only in a marginal way in the business and financial
reporting studies (ICAEW, 2010; Novak, 2011).
This study aims to fill this gap and claims a need to shift the focus of voluntary
disclosure from the intellectual capital to the business model. The latter, in fact,
allows us to understand a company’s intangible resources and how these interact with
the other components of the business model in order to create value.
More precisely, this study aims to identify the business model voluntary
disclosure choices made by three Italian manufacturing companies in Initial Public
Offering (IPO) prospectuses in order to investigate whether any differences may
depend on the type of innovation underlying the firms’ business models.
The research is carried out on the narrative sections of the IPO prospectuses of
three Italian companies. The analyzed companies are located in the North-east region
of Italy and listed on Borsa Italiana Stock Exchange. They presents similarities with
respect to the traditional variables that the accounting literature identifies as the main
determinants of voluntary disclosure (Chavent et al. 2006) and to the timing and
outcomes of the listing process. They rather differ in terms of business model
composition and innovation type standing at the basis of their value creation.
We chose a case study as the preferred methodology to address the research
questions given its ability to “illuminate” a decision or a set of decisions (Yin,
1984/2009). A series of in-depth interviews with the top management of the
companies allows to better understand the companies’ mechanisms of value creation
and their choices in terms of voluntary disclosure of the business model.
To investigate the level of disclosure a content analysis is performed by means
of a text analysis software (T-LAB), which provide a measure of frequency and
commonality for each strategic item disclosed in the IPO prospectus. Further, the
software allows to recognize the concepts holding more associations within each
other in order to ensure a most effective interpretation of the outcome and their
relations with the other business model components.
The results shows that all companies put similar emphasis on the description of
the customers, product and processes components of the business model.
Particularly, all companies describe in detail the first two and adopt an outside-in
strategic perspective. The companies placed rather different emphasis on the
3
description of the suppliers and especially the resources components. What appears
differentiating most the voluntary disclosure choices of companies to be listed lies in
the scant disclosure of resources (and their interactions with other components),
whenever the latter are “invisible” rather than intangible. These findings suggest that
the type of innovation underlying the business model of a company can significantly
affect business model voluntary disclosure choices in the IPO setting.
The paper contributes to the financial and reporting literature in various ways.
First, it adds to the ongoing debate on corporate reporting practices by focusing on a
new object of inquiry, that is the business model, and investigating its disclosure. The
existing strategic management literature concentrates on the role of the business
model as a useful tool to explain how value is created, delivered and captured
throughout the company’s life. This research indicates that the business model plays
an even important role in allowing external actors to understand a company’s value;
thus companies’ strategic communication should be shaped accordingly. Despite the
number of research papers devoted to exploring business models over the last few
years, structured research bridging the former with business and financial reporting
topics is still rare.
Further, this study differs from previous literature in that it uses Italian
manufacturing companies in the IPO setting. The Italian financial systems presents a
set of unique characteristics, while the IPO is an interesting setting since it offers a
unique opportunity to investigate the amount and the type of voluntary information
given that the company has a full incentive to present itself in the best possible light
in order to maximize the proceeds of the share issuance.
The paper is organized as follows: In the first section, voluntary disclosure, its
implications, and the concept of the business model are illustrated through a review
of prior studies. Then we frame the research question and the theoretical propositions
of the study. In the third section, we justify the choice of the companies and explain
why we perform the analysis on the IPO documents. Then, the methodology is
described. In the fourth section, we show and discuss the results. The last section is
dedicated to concluding remarks, limitations and suggestions for further research.
2. LITERATURE REVIEW AND RESEARCH QUESTIONS
Since the early Nineties, several accounting associations and regulatory bodies
put forward guidelines and proposals to improve the ability of the annual report’s
narrative sections to communicate a company’s mechanisms of value creation
(AICPA, 1994; CICA, 2001; FASB, 2001). Some research emphasizes the
increasing relevance of narrative reporting, as well as the declining
value of information conveyed within financial statements (Francis
and Shipper, 1999). New intangibles such as staff competencies, customer
relationships, models, and computer and administrative systems receive no
recognition in the traditional financial and management reporting model.
The growing globalization of the markets, the rapidity of technological
development - primarily of ICTs - and the evolution of consumers’ behavior (who are
increasingly interested in the intangible components of the value proposition), push
companies to innovate their products, processes, and especially their business models
with greater frequency (Amit and Zott, 2012; Teece, 2010). Consequently, the value
creation mechanisms become more complex and difficult to understand by only
5
means of the rigid financial statements required by law (Francis and Shipper, 1999;
Lev and Zarowin, 1999). Preceding literature put a great deal of emphasis on the
disclosure of intangible resources, recognizing the latter as key drivers for
innovation.
In the business and financial reporting literature the intellectual capital disclosure
has assumed a greater importance as an object of research, leading to the production
of reports and empirical research on the topic with specific reference to the Italian
context (Bozzolan et al. 2003; Upton, 2001; Zambon, 2003). The latter provide
evidence of an increasing disclosure of intellectual capital made especially by high
tech companies, whose mechanisms of value creation are largely based on intangible
resources (Cordazzo, 2007). However, it is noticeable that even though disclosure of
information by companies has been increasing, there are no clear signs that investors’
and analysts’ information demands have been met and an information gap still exists
between companies and investors, meaning that disclosure contained in the financial
reporting is still insufficient to allow a complete understanding of the value creation
mechanisms (Bagnoli and Vedovato, 2004; Eccles et al. 2001).
Nielsen and Bukh (2011) suggest the need to shift the focus of disclosure from
intellectual capital to the business model, in order to fill this gap. The business
model, in fact, allows to understand a company’s intangible resources but also their
interactions with the other components of the business model (product, processes…)
in order to create value. In 2010 also the International Accounting Standards Board
(IASB) recognized the role of the business model as a preeminent factor in
classifying a company’s financial assets by issuing the International Financial
Reporting Standard (IFRS) 09.
According to Nielsen and Bukh (2011), the above-mentioned gap is an
understanding gap, which depends on company’s inability to effectively
communicate its own business model rather than on its will to retain strategically
sensitive information.
However, research on voluntary disclosure claims that a listed company may
have incentives, especially if operating in highly uncertain markets, to not disclose
strategically “sensitive” information in order to avoid the risk of a competitive
disadvantage, even though this would reduce information asymmetry and thus the
cost of risk capital (Verrecchia, 2001). That is why a company’s business model
might be regarded as the most strategically “sensitive” information to be
communicated. One of the reason why a company might want to withhold
information is concerned with the presence of a large base of intangible resources.
Indeed, from a strategic perspective human, relational and structural capital, as part
of the intangible base of resources, are used to create knowledge to enhance firm
value.
This study therefore suggests that the information gap between companies and
investors does not depend on the inability of the former to effectively describe their
business models, rather it depends on their will to keep information private.
The study relies on the hypothesis that different types of innovation underlying a
company’s business model give rise to differing levels of disclosure in IPO
prospectuses. In particular, innovation can be regarded as relating to the following
three classes (Verganti, 2008):
- Market-pull innovation, which comes from the analysis of users’ needs and the
search for technologies that can satisfy them better. It implies an incremental
7
improvement of existing products and services to meet existent customer needs
(consolidation of existing markets and minimum level of uncertainty in development
forecasts);
- Design-driven innovation, which acts on emotional and symbolic aspects and
results in radically new meanings and languages of existing products or services to
meet customers’ latent needs (reconfiguration of existing markets and average level
of uncertainty in development forecasts);
- Technology-push innovation, which derives from the exploration of new
patterns of technological opportunities and is characterized by radical improvement
in product performance to generate non-existent customers’ needs (creation of new
markets and maximum level of uncertainty in development forecasts).
The types of innovation mentioned above may be associated with different and
increasing level of market uncertainty, that is why the descriptions of each business
models might represent a strategically more “sensitive” information with respect to
others. The study therefore suggests that companies adopting a business model based
on market-pull, design-driven and technology-push innovation are progressively
more reluctant to pursue full disclosure.
The trade-off between the opportunity to communicate the value creation
mechanisms and the threat that this might attract the interest of competitors is even
more critical during the listing process (Jenkinson and Ljungquist, 2001). Admission
for listing on the stock exchange has a powerful meaning since companies to be listed
do not have a publicly available track record of past financial performances. This
contributes to explaining why a company needs to communicate its business model in
the most effective way in its IPO prospectus.
The IPO prospectus plays an important role in fund-raising. Consequently, its
content is more exposed to legal liabilities than is the annual report and it represents
an additional incentive to full disclosure (Trueman, 1997). The listing process attracts
also competitors’ interest, since they could benefit from the information included in
the IPO prospectus, thus acting against the company and causing competitive
disadvantages (Healy and Palepu, 2001).
The requirements imposed by law and regulations allow some degree of
discretion regarding the form of the document at the time it is issued, contributing to
explain a further incentive to not disclose strategically “sensitive” information. For
all these reasons the IPO prospectus represents a meaningful context for the
recognition of costs and benefits associated with the voluntary disclosure of the
business model (Beattie, 1999).
The study attempts to identify the business model voluntary disclosure choices of
Italian manufacturing companies hypothesizing that different types of innovation
pursued by a company might lead to different levels of disclosure of the business
model in the IPO prospectus (given the degree of uncertainty to which each
innovation type is associated).
This consideration leads to the following research questions: “How do
manufacturing companies actually deal with voluntary disclosure of their business
model given the trade-off between costs and benefits of communicating strategically
sensitive information?”, and “How do different types of innovation underlying a
company’s business model affect voluntary disclosure choices?”
The research questions can be reported in brief in the form of the following
theoretical propositions, which are subject to further refinement:
9
P1: companies characterized by a business model based on technology-push
innovation are less prone to full disclosure of the business model in the IPO
prospectus compared to those based on market-pull and design-driven innovation;
P2: companies characterized by a business model based on market-pull
innovation are more prone to full disclosure of the business model in the IPO
prospectus compared to those based on technology-push and design-driven
innovation;
P3: companies characterized by a business model based on design-driven
innovation are more prone to full disclosure of the business model in the IPO
prospectus compared to those based on technology-push innovation but less prone
compared to those based on market-pull innovation.
Many empirical studies investigate the voluntary disclosure choices of companies
in their annual reports and the related determinants, namely: industry, size,
profitability, age, ownership, internationalization, type of management and country
(Chavent et al. 2006). Fewer studies address the issue considering the IPO prospectus
(Bukh et. al., 2002; Bukh et al. 2005; Cordazzo, 2007), and very few focus on
voluntary disclosure choices of Italian companies in their annual reports (Bagnoli,
2005; Bagnoli and Mantovani, 2012). This study differs from previous literature in
that it considers the business model as object of voluntary disclosure choices using
Italian manufacturing companies in the IPO setting.
The lack of business and financial reporting studies on the business model as
object of analysis is mostly likely due to the difficulties in defining the concept itself,
given that it has only recently been explored in the strategic literature (Teece, 2010).
However, several authors agree on the recognition of the business model’s
fundamental components: suppliers, resources, processes, products and customers,
emphasizing the need to investigate voluntary disclosure of the business model as a
whole.
-------------------------------------------
INSERT TABLE 1 ABOUT HERE
-------------------------------------------
This paper contributes to fill an important gap in the literature of business and
financial reporting borrowing ideas that have recently emerged in the strategic
management literature.
3. RESEARCH DESIGN AND METHODOLOGY
To address the research questions we rely on a case study given its ability to
“illuminate” a decision or a set of decisions (Yin, 1984/2009). The case study is the
preferred methodology to build knowledge about the phenomenon because the
existing contributions on voluntary disclosure of the business model in IPO
prospectuses are still limited. The research method is also justified by the difficulty
of isolating what we refer to as a new determinant of business model disclosure - the
innovation underlying business models -, compared to other determinants of
voluntary disclosure choices (sector, size, profitability, etc.). The case study, in fact,
is useful for in-depth analysis of a real phenomenon when the boundaries between the
latter and its context are not clear.
However, case study research suffers from a lack of rigor and an excess of bias.
There is no assurance of either reliability or internal validity. That is why using a
case study for anything more than exploratory purposes is risky (Bromley, 1986). In
addition, this method does not provide experimental controls. Therefore it is assumed
11
to not allow for “scientific distance”, it has no built-in corrective against the possible
biases of the researcher who will tend to confirm his/her assumptions (Flyvbjerg,
2006). Critics also claim that the case study does not accurately measure independent
and dependent variables (Stoecker, 1991).
Nonetheless, the study resorts to multiple case studies as they provide a logic of
replication and each case is treated as a single experiment to confirm or reject
inferences arising from others. The logic adopted is “theoretical” rather than “literal”
(designed to obtain similar results) in order to obtain expected but mixed results (Yin,
1984/2009). The use of multiple case studies within a “theoretical” logic makes it
possible to achieve more robust results and a level of generalization that a single case
per se does not permit (Santos and Eisenhardt, 2009).
The research focuses on three manufacturing companies located in the North-east
region of Italy and listed on Borsa Italiana Stock Exchange (STAR segment),
namely: Eurotech, Nice and Zignago Vetro. The choice of manufacturing companies
is related to the greater complexity of their business models compared to those of
commercial or service companies, thus provides the best setting in order to carrying
out the research.
The focus on the Italian context depends on the deep differences with respect to
the U.S. context, where most of the studies on voluntary disclosure have been
developed. Italian listed companies are characterized by the scarce
presence of institutional investors within their ownership structures,
as well as by the low percentage of shares traded on the market. In
addition, the entire financial system presents a lower legal protection of investors,
increasing competition for government securities and dominance of the banking
system. Thus, the generalization of preceding results to the Italian financial context is
still dubious (Francis et al. 2005).,
We selected the STAR segment of the Italian Stock Exchange as it is reserved for
mid-size companies with high transparency and communication requirements, as well
as high liquidity and rules aligned to the international standards of corporate
governance.
With respect to the type of innovation as a determinant of business model
disclosure, the choice of the three companies is related to the deep differences
characterizing their business models.
With respect to the IPO setting, the companies present similarities in terms of
timing and results of the listing process. Eurotech, Nice and Zignago Vetro are the
last north-east manufacturing companies to be listed on the STAR segment of the
Italian Stock Exchange before the 2008 crisis. The crisis increased the level of
uncertainty, thus modifying the voluntary disclosure strategies at least with reference
to the external environment (Bagnoli, 2009). We therefore choose not to consider
companies listed after 2008. With regard to the listing process outcomes, all the three
companies stand out for the positive market reaction at the time of listing. The
outcome translates into a positive bid-ask spread, as well as an increase in the share
prices in the first fifteen days after listing (Schrand and Verrecchia, 2005).
As for the traditional variables that literature identifies as main determinants of
voluntary disclosure choices, the three companies operate in the same industry -
manufacturing -, but in different sub-industry. They are similar in size and level of
profitability at the time of listing. Although they show clear differences in numerical
terms, they all can be refer as to mid-size profitable companies .
13
Eurotech and Nice are founded in the same period, while Zignago Vetro shows
some changes in the ownership structure due to a variation of its shareholders base in
the same years. At the time of listing all three companies are characterized by a small
ownership, and after IPO only Eurotech become a public company. Finally, the
companies share the same geographical region (north-east of Italy), operate in an
international context, and are led by powerful, charismatic leaders.
The analysis is carried out on IPO prospectus (1), with particular reference to its
narrative sections. Managers use the latter to report past economic and financial
results in order to foster investors’ confidence. The goal is to recount the past in order
to create an expectation for the future (Gioia et al., 2002). They then describe the
logic underlying the achievement of economic results and the business model, while
avoiding the disclosure of strategically sensitive information. Hypotheses about
future performances and the definition of a business plan seem to be implicitly left to
analysts.
The study relies on a content analysis in order to compute a measure of
disclosure, as it is widely used in the studies on voluntary disclosure (Guthrie et al.,
2004). A text analysis software, T-LAB, is employed to identify the frequency of the
concepts contained in the IPO prospectuses. Successively, a cluster analysis helps to
group them by using a statistical criterion such as the Ward's agglomerative
hierarchical method with Euclidean distance (Lancia, 2004). In this case, the
procedure for choosing the pair of clusters to merge at each step is based on the
optimal value of an objective function. We then rely on the dendrogram (tree
structure representing progressive grouping) in order to make it possible the 1() The Italian IPO prospectus consists of two sections preceded by the following paragraphs:
"Definitions and Glossary", "Company risk factors" and "Summary Note". For our purpose of research, the analysis is limited to the first section, particularly to the first nineteen chapters that show a narrative structure.
identification of each cluster, and cut it exactly at the point where it shows the
highest jump.
-------------------------------------------
INSERT FIGURE 4 ABOUT HERE
-------------------------------------------
The outcome of this method reflects three main clusters, namely: Corporate
Governance, Economic Value and Business Model. The analysis is then limited to
the concepts included in the “Business Model” cluster, and we observe their
frequency and commonalities with respect to the other IPO prospectuses(2).
Frequency serves a proxy for the relevance of each concept (Beattie and Thomson,
2007), while commonality is used as a measure of the non-specificity of each
concept. As a result, the analysis focuses on two main concept categories: “frequent
and common” and “frequent and exclusive”. T-LAB also allows to recognize the
most associated concepts through the computation of the cosine coefficient(3).
Further, we explore the “elementary contexts” function in order to attribute the right
contextualization and meaning to each concept (4).
The frequent concepts are then linked to the business model components
identified in the literature. For each concept the most associated ones are listed(5).
We provide the reader with one table representing the “frequent and common”
concepts and three different tables (one for each company) representing the “frequent
and exclusive” ones and their associations (see tables 2, 3, 4 and 5).
2() Concepts with a frequency higher than the average of the cluster to which they belong are defined as “frequent". Concepts that are present in at least two IPO prospectuses are defined as “common”.
3() We considered only the concepts that show an association coefficient greater than 20%.4() These represent part of the text corresponding to one or more sentences in which the presence of
a concept is detected. Their analysis allows us to avoid, for example, confusing nouns (i.e. “prodotto”/ “product”) with verb forms (i.e. “prodotto”/ “produced”).
5() The associated concepts are represented in each table following a decreasing order of the value of the association coefficient. We use bold to highlight those concepts considered as highly frequent, (i.e. showing a frequency value at least equal to 35). We then use capital letters for those concepts previously identified as “common and frequent” and “frequent and exclusive”.
15
Additional data are collected using interviews. From mid 2009 to late 2011 we
conduct 30 interviews with the top management of the companies (typically with the
chairman/founder and/or CEO)(6), in order to better understand the companies’
mechanisms of value creation and their choices in terms of voluntary disclosure of
the business model. The interviews are structured around a set of questions aimed at
identifying the company’s business model, its fundamental components, and the
interactions among the latter (see Appendix A).
We adopt the open-question technique to leave each party free to express and
enrich their response with details. This allows us to grasp all the subjective
interpretations. Each interview lasts on average two hours and respondents generally
adopt a similar level of depth and precision in dealing with the various issues. The
results are explained by means of a graphic format to make them easier to
understand, and summarized as follows.
The three companies’ business models are respectively based on: technology-
push innovation (Eurotech), design-driven innovation (Nice) and market-pull
innovation (Zignago Vetro) (7). Eurotech operates in the business-to-business sector.
It designs, develops and commercializes miniaturized and high-power computers
used in the defense, transportation and medical industries. Its mission is to foster the
integration of technologies in everyday life making them even more pervasive. The
company generates customers’ non-existent needs through the creation of new
product features. Its vision is about achieving growth by upgrading from the simple
6() The 30 interviews are divided as follows: 5 with the Chairman and MD of Eurotech, 3 with the CFO and 3 with the Investor Relator; 5 with the Chairman and MD of Nice and 3 with the CFO; 5 with the Chairman of Zignago Vetro, 3 with the MD and 3 with the CFO and Investor Relator.
7() In order to make the reader catch the companies’ business models more intuitively, these are graphically represented by an isosceles trapezoid formed by three equilateral triangles. At the top of the left triangle are the inside-out strategic perspective components (i.e. suppliers, resources and processes). At the top instead of the right triangle are the outside-in strategic perspective components (i.e. customers, products and processes). The central triangle is representative of the "economic value" created. See Figures 1, 2 and 3.
production of components to that of “ready to use” products. The company’s
production model is “fabless” as it is characterized by the complete outsourcing of
production. As a result the sale price is related to the value perceived by customers,
thus highlighting the importance of the intangible component of services. For
Roberto Siagri, President of Eurotech: “... the great secret of the knowledge economy
is that the added value of a product consists of a service component that you are able
to identify while your competitors are not”. Technology-push innovation is the key
driver for the company’s success and business growth, and gives rise to the strong
interaction with the research world in order to develop radically new technological
products.
-------------------------------------------
INSERT FIGURE 1 ABOUT HERE
-------------------------------------------
Nice operates in the business-to-business sector. It designs, develops and
distributes integrated automation systems for gates, roller shutters, garages, etc. Its
mission is to simplify everyday movements through the use of intelligent and easy
automation systems. It creates new meanings for existing products to meet
customers’ latent needs. Lauro Buoro, President of Nice, says: “... we produce
electronic devices which can become symbols or luxury objects. For instance, we
produce some radio devices by using fashion materials such as gold or silver”. The
company’s vision is to foster geographical expansion and growth through the
penetration of young markets. As in the case of Eurotech, the production model is
“fables”. It makes it possible to combine flexibility and efficiency while maintaining
constant supervision of the critical phases of the value chain. Design-driven
innovation is the key driver for success and business growth. The company’s
17
business model gives rise to a huge investment in the research and development of
new materials, shapes and colors in order to create radically new products or improve
existing ones (in their technological, aesthetic and ergonomic aspects). As Lauro
Buoro says: “We believe in the diversity of ideas to create innovation”.
-------------------------------------------
INSERT FIGURE 2 ABOUT HERE
-------------------------------------------
Zignago Vetro operates in the business-to-business sector. It designs, develops,
produces and sells high quality glass containers used in the food, beverages,
cosmetics and perfumery industries. Its mission is to promptly satisfy customers’
needs by offering high quality, innovative and personalized products. The company
pursues an incremental improvement of existing product performance to meet
customer needs. Its vision is related to growth in the glass industry while maintaining
a high level of profitability. The production model operates continuously and is
characterized by flexibility in order to meet customers’ requests in an efficient and
effective way. For Luca Marzotto, President of Zignago Holding: “… there still
exists a market that doesn’t care about the production quantity, instead it is
interested in personalized products. Thus, we must be more flexible and accept
smaller and changing batches, being at the same time very efficient. No other
competitors compete on this idea, since they have larger size and the industry is
highly concentrated”. Market-pull innovation is the key driver for success and
business growth. The company recognizes the importance of combining quality,
innovation, operational efficiency and flexibility to meet market niches demand.
-------------------------------------------
INSERT FIGURE 3 ABOUT HERE
-------------------------------------------
The three companies’ business models satisfy markets characterized by different
levels of uncertainty. The latter, indeed, affects the ability to forecast market
developments and influence the magnitude of proprietary costs for each company.
Zignago Vetro shows the lowest degree of uncertainty. Uncertainty increases in the
case of Nice, and it is highest for Eurotech, which creates new markets with high
potential growth rates. For Roberto Siagri: “…before the market exists there is
information asymmetry ... afterwards, all producers will offer the same products”.
4. RESULTS AND DISCUSSION
The content-analysis leads to the identification of a set of “frequent and
common” concepts which can be interpreted as the fundamental components of every
business model.
-------------------------------------------
INSERT TABLE 2 ABOUT HERE
-------------------------------------------
The presence and description of these concepts appear to be necessary to all the
three companies. The concepts are: industry, market, customer, product,
development, and with a lower level of frequency: commercial, industrial, system,
internal, manufacturing, production.
The high frequency and degree of association between industry and market,
between customer and product and among market, product and development,
highlight the importance attributed by all the three companies to the dynamics of the
industry, in order to create value for customers through an appropriate product
offering.
19
Customer and product represent the key components of the business processes, as
shown by the high degree of association between: customer and commercial;
commercial and development; commercial and industrial; product, production and
manufacturing.
The two concepts system and internal are related to the presence of an internal
auditing system that is required by accounting regulations for each company to be
listed. Among at the “frequent and common” concepts, those linked to suppliers and
resources are very few. This confirms the adoption of an outside-in strategic
perspective, which leads to neglect the description of the distinctive resources owned
by a company when describing its business model.
The analysis points out the existence of a set of “frequent and exclusive”
concepts for each company. The latter can be interpreted as the fundamental
components of a business model, whose presence and description is critical only to
one of the companies.
-------------------------------------------
INSERT TABLE 3 ABOUT HERE
------------------------------------------
Eurotech’s “frequent and exclusive” concepts are mostly attributable to the product
component of the business model. Among the most frequent and strongly associated
concepts we find: hpc, computer, nanoPC, solution and technological, which refer
respectively to the two types of products, as well as to the upgrading that the
company is currently engaged in from mere producer of goods to that of ready-to-use
solutions. The two concepts capacity and computation refer to the product’s
performance. Finally, software and modules identify product components.
The only exceptions are the concepts: institute, projects and research. The latter
are related respectively to the suppliers and processes components. Their importance
comes from Eurotech being defined in its IPO prospectus as a “factory of ideas”
focused on research projects through partnerships with universities and research
centers, which act both as suppliers and customers.
For Roberto Siagri, President of the Group: “The partnership has to be made with
suppliers and customers… Nowadays customer relations are essential, unless the
product is a commodity. But if customers don’t want a long-term relationship we tend
to reject them… Indeed, I do not believe that those customers are the right ones for
our type of business”.
Within the category of “frequent and exclusive” concepts any reference to the
resources component is absent, as to demonstrate that Eurotech devotes very little
attention to their disclosure and confirm company’s propensity to an outside-in
strategic perspective.
Although the key driver of the company’s success is the technology-push
innovation which is based on research and development of new scientific knowledge,
there are no references to human capital except for the relational capital as shown by
the association between collaboration and projects.
-------------------------------------------
INSERT TABLE 4 ABOUT HERE
-------------------------------------------
As far as Nice is concerned, the “frequent and exclusive” concepts are mostly
attributable to the product component, but also to the processes one.
Among the most frequent and strongly associated concepts we find: line, systems
and automation, which recall the product types and lines; electronic, which identifies
21
the main component of the product. Finally, design, technological and innovation, are
related to the tangible and intangible outcome of the design process.
Also the concepts: distribution, marketing, supply and manufacturing, are
attributable to the processes component. The strategic goal of the company is indeed
to strengthen the relationship with customers in order to spread and increase brand
awareness. The concept brand can thus be interpreted either as an attribute of the
product or as a distinctive resource.
Nice uses product design as its main communication tool. This is shown by the
high degree of association between the concepts marketing and communication,
marketing and design, marketing and brand.
Less relevance is reserved to some concepts related to the processes component
(as for safety and quality), to the product component (as for items, housing, family
and quality) and to the customer component (as for International and Europe).
The only concept that can be related to the suppliers component is
subcontractors, which recalls the main role of partnerships in outsourcing for Nice.
This result confirms company’s propensity to adopt an outside-in strategic
perspective.
Although, the key driver of the company’s success is a design-driven innovation
based on intangible resources (such as design), there are no references to human and
relational capital. The only exception is the concept brand, which refers to the
structural capital.
-------------------------------------------
INSERT TABLE 5 ABOUT HERE
-------------------------------------------
As far as Zignago Vetro is concerned, the “frequent and exclusive” concepts are
mostly attributable to the components product and processes, but also to customers
and resources.
Among the most frequent and strongly associated concepts we find: cosmetics
and perfumery, which identify the markets served by the company. The concepts line,
service, and bottle, identify product types and lines. Finally, quality and shape refer
to the tangible and intangible performances of the product.
Also the concepts: line, capacity, safety and process, are attributable to the
processes component and are characterized by a high degree of association with each
other. The concepts: equipment, factory, furnace and work are instead related to the
resources component, but only the last three are characterized by a high degree of
association with each other as they are tangible resources. The high degree of
association between quality and process, and between process and equipment,
highlights the important role of tangible resources in the development of the
production cycle. In addition, the high degree of association between equipment and
regulation, between work and safety, safety and regulation, emphasizes the
company’s focus on worker safety so as to reduce the associated risks and comply
with current laws and regulations.
The references to human and structural capital, although limited to supply
contracts, show that the company’s propensity to adopt an outside-in strategic
perspective is combined with an inside-out one, despite the fact that the key driver of
success is a market-pull innovation model.
The research shows that all companies put similar emphasis on the disclosure of
some of the business model components identified in the strategic literature, namely:
23
customers, product and processes. Particularly, all companies describe in detail the
first two and adopt an outside-in strategic perspective.
The companies placed rather different emphasis on the description of the
suppliers and especially the resources components.
Eurotech does not provide a description of its resources even though its business
model is based on breakthrough technology-push innovation and characterized by the
importance of scientific knowledge. More precisely, we refer to the knowledge about
new technologies which allows product performance radical improvement or the
introduction of new product features. This choice might be interpreted in the light of
a further distinction within the company’s resource base. Indeed Eurotech owns
resources which are not only intangible but even “invisible”, both to the financial and
competitive market.
Nice does not provide a description of its resources either, even though its
business model is based on design-driven innovation and is therefore characterized
by the importance of human knowledge. We refer to the knowledge related to new
social behaviors which lead to the radical change or new creation of product
meanings. Nice limits its disclosure to the discussion of “visible” intangible
resources, even though these are not reported in the financial statements imposed by
law (e.g. brand), and to the “visible” effects deriving from the exploitation of these
resources (e.g. the design of the products).
Conversely, Zignago Vetro fully describes its resources. This is due to the fact
that its business model is based on market-pull innovation, and therefore
characterized by the preeminent role of tangible and “visible” resources, which are
clearly reported in the financial statements imposed by law (e.g. equipment,
including the furnaces for glass).
5. CONCLUSION
The study aims at identifying the voluntary disclosure choices of the business
models made by three Italian companies - Eurotech, Nice and Zignago Vetro - in
their IPO prospectuses to investigate whether any differences may depend on the type
of innovation underlying each business model.
Assuming that differing types of innovation give rise to likewise differing level
of uncertainty in the markets, the results suggest that the type of innovation
underlying the business model of a company significantly affects its voluntary
disclosure choices in the IPO prospectus. More precisely, the trade-off between costs
and benefits arising from communicating strategically “sensitive” information to the
financial market confirms our initial research propositions. Moreover, what appears
to differentiate most voluntary disclosure choices of companies to be listed lies in the
low disclosure of resources (and their possible interactions with other components)
when these are “invisible” rather than only intangible.
The results partially contradict previous findings pointing out a higher level of
voluntary disclosure of intangible resources in the IPO prospectuses of Italian
companies operating in technology-push innovation industry (IT, biotechnology, etc.)
(Bukh et al., 2001). Nevertheless the different result may depend on the research
method that has been used, being the previous empirical studies. Preceding research
generally uses quantitative methods, allowing a bigger sample to be considered, but
25
at the same time limiting the in-depth analysis of the companies, and thus the
recognition of strategically “sensitive” information to be communicated.
The presence of invisible resources makes a business model more difficult to
understand by only means of the rigid financial statements imposed by law, or by
simply analyzing company products (as they are the most visible component).
The difficulty in disentangle the composition of the resources component of a
business model suggests the need of a deeper level of detail with respect to the
narrative sections of the IPO prospectus, in order to make investors fully aware of the
company’ value and companies able to benefit from the related positive effects
(reduce information asymmetry, reduced cost of risk capital, increased share
performance…).
The study then suggests the need to address the issue of voluntary disclosure of
the business model by first distinguishing “visible” intangible resources (not
necessarily in the rigid financial statements imposed law) from those that are
“invisible” (both to financial and competitive markets). This can be fostered by the
active role of professional associations and regulatory bodies in implementing new
rules and frameworks aimed at improving the ability of IPO prospectuses to
effectively communicate a company’s value and resources. To this end, a greater
focus on the classification schemes that are emerging from the strategic literature
seems necessary.
The importance of these results is strengthened by a series of phenomena (such
as globalization of markets, speed and complexity of technological development,
changes in consumer behavior, etc..) which will increase the importance of invisible
resources within the business model of a growing number of companies, thus making
even stronger the role of technology-push and design-driven innovation, and
consequently making their disclosure more critical.
The study has a major limitation in the generalization of results since it uses
Italian companies. However, Bukh et al. (2002) did not detect significant differences
in the voluntary disclosure of intangible components in IPO prospectuses of
companies from different national contexts.
Concerning the use of the case study method, this clearly represents the main
weakness of the research as it excludes whichever generalization, but at the same
time also its main strength since it allows for a greater level of detail in the study of
the companies.
As a future objective we suggest expanding our analysis to a larger and
diversified sample of companies to be listed, belonging both to the national and
international context. We further suggest the implementation of a quantitative method
of research consistent with the traditional research in business and financial
reporting.
27
APPENDIX A - In-depth interview on business model scheme
COMPANY : ____________________
REPLIER: □ PRESIDENT □ CEO □ CFO □ OTHER___________
DATE: ____________________
MISSION AND VISION - What is the purpose for which your company exist?- Which are your assumptions about the dynamics of the external environment?- Which values characterized your vision?- Do you adopt a strategy focused towards productivity (efficiency gains by
reducing direct and indirect costs) or growth (promote revenue growth with appropriate policies)?
- What are your choices at the corporate level?- What is your business perspective in the medium-long term? What are your
ambitions for the future?
ECONOMIC VALUE
- What about your current economic and financial performance?- How are your costs structured? Are them fixed or variable? - How do you set the prices?- How would you described your revenue model?
SUPPLIERS- Who are your key suppliers?- What kind of relationship do you have with them? Do you have bargaining
power?- Are you integrated with your key suppliers?- Which resources and core competencies do you acquired from them?- To what extent are your mission and goals aligned with those of your
suppliers/partners? - What kind of competitive advantage the relationship with suppliers generate? - Do the supply channels allow you to gather the resources you need when
required?
RESOURCES- What kind of resources do you possess? (Tangible: financial, physical, or
intangible: relational capital, reputational, structural, human …)- Do the resources used belong to your own or to external parties?- How well do they complement and support each other? - To what extent the core competencies allow you to offer benefits to the buyers?
- How unique is your resource base? And how difficult is it for competitors to imitate it?
PROCESSES- Which are the main processes that characterize your company? (Production,
distribution ...)- Does your industry include companies that enjoy significant cost advantages
deriving from their experience in performing some activities?- Which are your most critical processes (the processes that create more value for
customers and have a high degree of specialization)?
PRODUCT- What kind of product do you offer? (commodity, good, service, experience ...)- How do you characterize your value proposition? (Price, reliability, availability,
performance, quality, technology, safety, image, style, customization ...)- Is your product a standard one?- What architecture does your product have? And how is it designed? - What is the final destination of your product?- What is the role of each of your products in the range offer?- What is the level of financial feasibility of each of your products?- Which factors affect competition for substitute products?- How important are R & D activity and product innovation? And what is the role
of technological progress within your industry?
CUSTOMERS- What value or benefit do you distribute to customers? - What is your target market? Is it segmented? And which are the segmentation
variables that you use?- What is the rate of growth of each market segment? - Do some buyers have bargaining power due to a high volume of purchase?- What kind of relationships do you establish with customers? (Price, benefit
offered, confidence, know-how possessed ...)- Which communication channels do you use?- Which distribution channels do you use? Do you have a strong network of
distributors and dealers?
29
References
AICPA, (1994), “Comprehensive Report of the Special Committee on Financial
Reporting”, American Institute of Certified Public Accountants, Improving Business
Reporting. A Customer Focus: Meeting the Information needs of Investors and
Creditors. New York.
Amit R. and Zott, C. (2012), “Creating value through business model
innovation”, Sloan Management Review, 53(3), pp. 41-49.
Bagnoli, C. (2005), “The different ways of preparing management report of
Italian listed companies and their determinants”, International Journal of Accounting,
Auditing and Performance Evaluation, 2(1), pp. 84-126.
Bagnoli, C. (2009), “L’evoluzione delle strategie di disclosure volontaria delle
imprese quotate italiane in un contesto di accresciuta incertezza ambientale”, [“The
evolution of voluntary disclosure strategies in a context of increased environmental
uncertainty”], Finanza, Marketing e Produzione, 3, pp. 104-132.
Bagnoli, C. and Mantovani G. (2012), “Voluntary disclosure strategies and the
cost of capital of Italian blue chips”, Journal of Business, Economics and Finance,
1(4), pp. 49-94.
Bagnoli, C. and Vedovato, M. (2004), “Le determinanti del gap informativo tra
imprese quotate ed analisti finanziaria: i contenuti della relazione sulla gestione”,
[“Determinants of the information gap between listed companies and financial
analysts: contents of the management report”], Rivista Italiana di Ragioneria e di
Economia Aziendale, 3-4, pp. 206-222.
Beattie, V. (1999), “Business reporting: the inevitable change”, The Institute of
Chartered Accountants of Scotland, ICAS. Edinburgh.
Beattie, V. and Thomson, S. (2007), “Lifting the lid on the use of content analysis
to investigate intellectual capital disclosures”, Accounting Forum, 31(2), pp. 129-
163.
Bozzolan, S., Favotto, F. and Ricceri, F. (2003), “Italian annual intellectual
capital disclosure: an empirical analysis”, Journal of Intellectual Capital, 4(4), pp.
543-558.
Bromley, D.B. (1986), The Case-Study Method in Psychology and Related
Disciplines. (New York: John Wiley and Sons).
Bukh, P.N., Johansen, M.R., Meca, E.G. and Mouritsen, J. (2002), “IPO
prospectuses as intellectual capital reports: a comparison of Danish and Spanish
reporting practices”, Working Paper, The Aarhus School of Business, Denmark.
Bukh, P.N., Larsen, H.T., Gormsen, P. and Mouritsen, J. (2001), “Disclosure of
intellectual capital indicators in Danish IPO prospectus”, Working Paper, The
Aarhus School of Business, Aarhus, Denmark.
Bukh, P.N., Nielsen, C., Gormsen, P. and Mouritsen, J. (2005), “Disclosure of
information on intellectual capital in Danish IPO prospectuses”, Accounting, Auditing
& Accountability Journal, 18(6), pp. 713-732.
Chavent, M., Ding, Y., Fu, L., Stolowy, H. and Wang, H. (2006), “Disclosure and
determinants studies: an extension using the divisive clustering method (DIV)”,
European Accounting Review, 15(2), pp. 181-218.
CICA, (2001), “Review Draft”, Canadian Institute of Chartered Accountants,
Management’s Discussion and Analysis; Guidance on Preparation and Disclosure.
Toronto.
Cordazzo, M. (2007), “Intangibles and Italian IPO prospectuses: a disclosure
analysis”, Journal of Intellectual Capital, 8(2), pp. 288-305.
Eccles, R.G., Herz, R.H., Keegan, E.M. and Phillips, D.M. (2001), The Value
Reporting Revolution: Moving beyond the Earnings Game, (New York: John Wiley
& Sons).
FASB, (2001), “Business Reporting Research Project”, Steering Committee
Report, Financial Accounting Standards, Improving Business Reporting: Insights into
Enhancing Voluntary Disclosure.
Flyvbjerg, B. (2006), “Five misunderstandings about case-study research”,
Qualitative Inquiry, 12(2), pp. 219-245.
Francis, J.R., Khurana, K. I. and Pereira R. (2005), “Disclosure incentives and
effects on cost of capital around the world”, The Accounting Review, 80(4), pp. 1125-
1162.
Francis, J. and Shipper, K. (1999), “Have financial statements lost their
relevance?”, Journal of Accounting Research, 37(2), pp. 319-352.
31
Gioia, D.A., Corley, K.G. and Fabbri, T. (2002), “Revising the past (while
thinking in the future perfect tense)”, Journal of Organizational Change
Management, 15(6), pp.622-634.
Govindarajan, V. and Gupta, A.K. (2001), “Strategic innovation: a conceptual
road map”, Business Horizon, 44(4), pp. 3-12.
Guthrie, J., Petty, R., Yongvanich, K. and Ricceri, F. (2004), “Using content
analysis as a research method to inquire into intellectual capital reporting”, Journal of
Intellectual Capital, 5(2), pp. 282-293.
Healy, P.M. and Palepu, K.G. (2001), “Information asymmetry, corporate
disclosure and the capital market: a review of the empirical disclosure literature”,
Journal of Accounting and Economics, 31(1-3), pp. 405-440.
ICAEW, (2010), Institute of Chartered Accountants of England and Wales,
Business models in accounting: the theory of the firm and financial reporting.
London.
IASB, (2009), International Accounting Standards Board, Financial Instruments
(IFRS 9). London.
Jenkinson, T. and Ljungquist, A. (2001), Going public: the theory and evidence
on how companies raise equity finance. (Oxford: Oxford University Press).
Lancia, F. (2004), Strumenti per l’analisi dei testi. Introduzione all’uso di T-lab,
[Tools for text analysis. Introduction to T-lab]. (Milano: Franco Angeli).
Leitner, K. H. (2011), “The effect of intellectual capital on product
innovativeness in SMEs”, International Journal of Technology Management, 53(1),
pp. 1-18.
Lev, B. and Zarowin, P. (1999), “The boundaries of financial reporting and how
to extend them”, Journal of Accounting Research, 37(2), pp. 353-385.
Markides, C. (1997), “Strategic Innovation”, Sloan Management Review, 39(3),
pp. 31-42.
Nielsen, C. and Bukh, P.N. (2011), “What constitutes a business model: the
perception of financial analysts”, International Journal of Learning and Intellectual
Capital, 8(3), pp. 256-271.
Novak, A. (2011), “Business model literature overview”, Accounting
Renaissance Conference, 3-5 November, Venice.
Santos, F.M. and Eisenhardt K. (2009), “Constructing markets and shaping
boundaries: entrepreneurial power in nascent fields”, Academy of Management
Journal, 52(4), pp. 643-671.
Schrand, C. and Verrecchia, R.E. (2005), “Information disclosure and adverse
selection explanations for IPO underpricing”, Working Paper, The Wharton School,
University of Pennsylvania.
Stoecker, R. (1991), “Evaluating and rethinking the case study”, The Sociological
Review, 39(1), pp.88-112.
Subramaniam, M. and Youndt, M.A. (2005), “The influence of intellectual
capital on the types of innovative capabilities”, Academy of Management Journal,
48(3), pp.450–463.
Teece, D.J. (2010), “Business models, business strategy and innovation”, Long
Range Planning, 43(2-3), pp. 172-194.
Trueman, B. (1997), “Managerial disclosure and shareholder litigation”, Review
of Accounting Studies, 2(2), pp.181-199.
Upton, W.S. (2001), “Special report”, Financial Accounting Standards Board,
Business and financial reporting: challenges from the new economy.
Verganti R. (2008), “Design, meanings and radical innovation: a metamodel and
a research agenda”, The Journal of Production, Innovation and Management, 25(5),
pp. 436-456.
Verrecchia, R.E. (2001), “Essays on disclosure”, Journal of Accounting and
Economics, 32(1-3), pp. 97-180.
Yin, R.K. (1984), Case study research: design and methods. (Beverly Hills:
Sage).
Yin, R.K. (2009), Case study research: design and methods. (Sage publications).
Zambon, S. (2003), “Study prepared for the Commission of the European
Communities Enterprise Directorate General”, Study on the Measurement of
Intangible Assets and Associated Reporting Practices”. Brussels.
33
FIGURE 1 - The business model of “Eurotech”
FIGURE 2 - The business model of “Nice”
FIGURE 3 - The business model of “Zignago Vetro”
SUPPLIERS
RESOURCES PROCESSES
PRODUCT
CUSTOMERS
ECONOMIC VALUE
ORGANIZATION FUNCTIONS
OUTSIDE-IN
INSIDE-OUT
R&D DESIGN
OUTSOURCING OUTSIDE-IN
INSIDE-OUT
SUPPLIERS
RESOURCES PROCESSES
PRODUCT
CUSTOMERS
ECONOMIC VALUE
PROCESSESEFFICIENCY QUALITY
OUTSIDE-IN
INSIDE-OUT
SUPPLIERS
RESOURCES PRODUCT
CUSTOMERS
ECONOMIC VALUE
FIGURE 4 - The dendograms
Eurotech
Nice
Zignago Vetro
35
Table 1 - Business model’s fundamental components in the strategic literature
1
Author/Authors Title Year Product Processes Resources Suppliers CustomersAl-Debei, Avinson Developing a unified framework of the business model concept 2010 P P P P P
Chesbrough, RosenbloomThe role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin
‐off companies
2002 P P P
Eyring et al. New Business Models In Emerging Markets. 2011 P P P P PGoethals Mindfully innovating your Business Model. 2011 P P P P PJohnson, Christensen, Kagermann Reinventing Your Business Model 2008 P P P P PJouison, Estèle, Verstraete Business Model and firm foundation 2008 P P P P P
Lehmann Ortega, SchoettlFrom buzzword to managerial tool: The role of business models in strategic innovation
2005 P P P P P
Linder, Cantrell So what is a business model anyway 2000 P P P P PMason, Spring The sites and practices of business models 2011 P P P P P
Moingeon, Bertrand, Lehmann-OrtegaCreation and Implementation of a New Business Model: a Disarming Case Study.
2010 P P P P P
Morris, Shindehutte, Allen The entrepreneur's business model: toward a unified perspective 2005 P P P P P
Osterwalder, Pigneur, TucciClarifying business models: Origins, present, and future of the concept
2005 P P P P P
RichardsonThe business model: an integrative framework for strategy execution
2008 P P P P P
Sahffer, Smith, Linder The power of business models 2005 P P P P PTorbay, Osterwalder, Pigneur E-Business Model Design, Classification, and Measurements. 2002 P P P P P
Voelpel et al.The wheel of business model reinvention: how to reshape your business model to leapfrog competitors
2004 P P P P P
Table 1 shows that several authors investigated the business model in the strategic literature. Almost all of them agree on the recognition of the business model’s fundamental components, namely: suppliers, resources, processes, products and customers.
TABLE 2 - “Frequent and common” concepts
Suppliers freq.E freq.N freq.Z Ass. > 0,20 Resourcesfreq.E freq.N freq.Z Ass. > 0,20 Processes freq.E freq.N freq.Z Ass. > 0,20 Product freq.E freq.N freq.Z Ass. > 0,20 Customers freq.E freq.N freq.Z Ass. > 0,20
COMMERCIAL 41 125 123 industrial SYSTEM 85 99 62 control DEVELOPMENT 98 68 66 research PRODUCT 137 245 215 innovation INDUSTRY 80 76 75 experiencerelation internal activity finshed operatesupplier management product customer market
corporate new development developmentINTERNAL40 35 91 control market market area
system commercial new MARKET 123 131 272 productprocedure industry technological segments
area developmentINDUSTRIAL 48 50 102 commercial growth
activity geographicalsystems industry
MANUFACTURING 21 27 66 process operatephase CUSTOMER 65 37 108 needproduction productproduct commercial
PRODUCTION 34 57 149 quality servicemanufacturing qualityproduct COMMERCIAL 41 125 123 industrialfactory customer
developmentrelation
INSIDE-OUT PERSPECTIVE OUTSIDE-IN PERSPECTIVE
Table 2 shows the set of “frequent and common” concepts which can be interpreted as the fundamental components of the business model. Concepts with a frequency higher than the average of the cluster to which they belong are defined as “frequent". Concepts that are present in at least two IPO prospectuses are defined as “common”. The table indicates the frequency of each concept for the three companies (freq E, freq. N, freq. Z) and the most associated concepts (ass.>0,20).
TABLE 3 - “Frequent and exclusive” concepts, Eurotech
3
Suppliers Associations Coef. Resources Associations Coef. Processes Associations Coef. Product Associations Coef. Customers AssociationsCoef.
PROJECTS (32) university 0,2981 HPC (77) computation 0,3143 TECHNOLOGICAL (32) market 0,2913collaboration 0,2471 capacity 0,3026 INSTITUTE (26) centre 0,4529research 0,2396 high 0,2810 university 0,3264
INSTITUTE (26) centre 0,4529 COMPUTER (58) embedded 0,4170 physical 0,2720university 0,3264 miniaturized 0,3032 research 0,2454research 0,2454 computation 0,2769 customer 0,2730
high 0,2590NANO PC (55) area 0,2911
miniaturized 0,2725industry 0,2714hpc 0,2151modules 0,2147
SOLUTION (47) product 0,2492standard 0,2366technological 0,2063development 0,2015
CAPACITY(41) computation 0,3800hpc 0,3026high 0,2824need 0,1998
COMPUTATION (38) capacity 0,3800hpc 0,3143high 0,2934miniaturized 0,2810
TECHNOLOGICAL (32) solution 0,2063MODULES (21) architecture 0,3381
standard 0,3217integrate 0,2421
SOFTWARE (19) operational 0,3059hardware 0,2767system 0,2392standard 0,2291
INSIDE-OUT PERSPECTIVE OUTSIDE-IN PERSPECTIVE
Table 3 shows the set of “frequent and exclusive” concepts of Eurotech, their frequency in brackets, the most associated concepts and the relative coefficient of association. The concepts considered as highly frequent (i.e. showing a frequency value at least equal to 35) are highlighted in bold. There are no “frequent and exclusive” concepts belonging to the resources and processes components.
TABLE 4 - “Frequent and exclusive” concepts, Nice
Suppliers Associations Coef. Resources Associations Coef. Processes Associations Coef. Product Associations Coef. Customers AssociationsCoef.SUBCONTRACTORS (37)production 0,2613 BARND (38) product 0,2969 DISTRIBUTION (37) organized 0,6587 LINE (113) Gate 0,5913 INTERNATIONAL(31) growth 0,2880
phase 0,2289 unique 0,2947 channel 0,4293 screen 0,4793 foreign 0,2155quality 0,2215 range 0,2529 technician 0,2877 curtains 0,2186 strategy 0,2008semi-finished 0,2055 marketing 0,2352 wholesaler 0,2847 SYSTEMS (99) automation 0,3372 business 0,2006manufacturing 0,2013 MARKETING (36) communication 0,4854 gate 0,3159 EUROPE (28) France 0,3224relation 0,2016 design 0,2830 screen 0,2959 geographical 0,2818
external 0,2361 product 0,2633 Italy 0,2654brand 0,2352 line 0,2458 area 0,2476
DESIGN (32) realization 0,2652 DESIGN (68) ergonomics 0,4201 size 0,2336development 0,2358 technological 0,3895
SAFETY (29) instruction 0,2026 innovation 0,3208technology 0,2008 blue 0,2970
QUALITY (27) control 0,2901 AUTOMATION (43) systems 0,3372subcontractors 0,2215 gate 0,2641process 0,2213 garage 0,2226
SUPPLY (27) component 0,3339 screen 0,2199production 0,3059 ELECTRONIC (42) technic 0,2415supplier 0,2722 component 0,2372
MANUFACTURING (24) external 0,3651 product 0,2279semi-finished 0,3062 BRAND (38) product 0,2969component 0,2708 unique 0,2947cost 0,2341 range 0,2529phase 0,2132 marketing 0,2352subcontractors 0,2013 TECHNOLOGICAL (35) innovation 0,6389
design 0,3895new 0,2070development 0,1955
INNOVATION (28) ergonomics 0,4910attention 0,3381design 0,3208
ITEMS (28) family 0,6558engine 0,2303automation 0,2279
HOUSING (26) building 0,5708garage 0,4498industrial 0,2838
FAMILY (24) items 0,6558automation 0,2802remote 0,2357
INSIDE-OUT PERSPECTIVE OUTSIDE-IN PERSPECTIVE
Table 4 shows the set of “frequent and exclusive” concepts of Nice, their frequency in brackets, the most associated concepts and the relative coefficient of association. The concepts considered as highly frequent (i.e. showing a frequency value at least equal to 35) are highlighted in bold. The majority of the concepts belong to the processes and product components.
TABLE 5 - “Frequent and exclusive” concepts, Zignago Vetro
5
Suppliers Associations Coef. Resources Associations Coef. Processes Associations Coef. Product Associations Coef. Customers Associations Coef.
SUPPLY(32) gas 0,2622 EQUIPMENT (116) furnace 0,2829 LINE (55) furnace 0,2239 QUALITY (89) product 0,3325COSMETICS/ PERFUMERY bottle 0,2679
performance 0,2581 investment 0,2309 CAPACITY (48) manufacturing0,2777 customer 0,2448 global 0,2368contract 0,2429 flexibility 0,2313 SAFETY (44) regulation 0,2876 need 0,2332 market 0,2061agreement 0,2326 production 0,2257 health 0,2768 service 0,2040 segments 0,2007
FACTORY (94) surface 0,2945 work 0,2645 LINE (55) product 0,2747 glass 0,1979furnace 0,2896 process 0,2208 SHAPE (43) colours 0,2160 CAPACITY (48) colours 0,2457specialized 0,2567 place 0,2202 need 0,2135 shape 0,2321production 0,2397 guarantee 0,2114 batches 0,2068regulation 0,2176 PROCESS (39) manufacturing0,2957 bottle 0,2032
WORK (43) place 0,3835 safety 0,2892 SERVICE (43) customer 0,3054safety 0,2989 technical 0,2212 quality 0,2940prevention 0,2757 equipment 0,2108 product 0,2664health 0,2682 quality 0,2018 BOTTLE (37) wine 0,4658worker 0,2358 level 0,1992 liqueur 0,3691duty 0,1953 colours 0,3245
FURNACE (58) reconstruction 0,5319 food 0,3017factory 0,1996
INSIDE-OUT PERSPECTIVE OUTSIDE-IN PERSPECTIVE
Table 5 shows the set of “frequent and exclusive” concepts of Zignago Vetro, their frequency in brackets, the most associated concepts and the relative coefficient of association. The concepts considered as highly frequent (i.e. showing a frequency value at least equal to 35) are highlighted in bold. The concepts disclosed belong to all the five components of the business model.