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MRSS Seminar: Blending Business Model Imitation And Innovation To Fill Institutional Voids: The Case Of Jumia, The Of Africa

The CEU Campus
Tuesday, May 21, 2019, 2:00 pm – 3:30 pm

Information-based theories of imitation suggest that when environmental uncertainty is high, firms tend to imitate successful organizations. In this study, we ask how information-based motives for imitation work in developing countries, where the uncertainty caused by the lack of reliable market-supporting institutions may increase the pressure to imitate what others successfully do. Our results suggest that firms in developing countries attempt to follow the success of developed country-based firms by imitating their business model in their local context. However, due to significant institutional voids, mere imitation of a business model from a developed market is not viable. We draw on the case study of Jumia—an online retailing company in Africa established with the aim to emulate the success of across many African countries characterized by little or no online shopping culture. We analyze how Jumia’s lack of experience in an environmental context with high uncertainty prompted an intentional imitation of business model that resulted in an “imitate-but-modify” strategy. Further, we propose a process model explaining how business model imitation in institutionally unstable contexts progresses through four distinct phases, with each aimed at imitating successful organizations but also innovatively filling specific voids in the environment.