Firms from transforming economies can leverage the characteristics of their location to develop innovative business models before internationalizing. This note showcases ByteDance's innovative business model for its TikTok app, which became one of the most downloaded apps globally. ByteDance used its large and increasingly demanding home market to experiment with creative combinations of business model elements to develop a unique business proposition that positions the TikTok app as a hybrid of social networking and video-sharing. In addition, TikTok benefitted from China's IT strength supported by national high-tech policy to an AI-based recommendation algorithm as a non-location bound resource. TikTok shows that firms from transforming economies can launch successful global products through business model innovation.

Despite the growing interest in social businesses, knowledge about and theorization of how these businesses change social and institutional conditions in emerging economies is scarce. This research investigates how an innovative social business model acts on institutional voids and creates social value for deprived communities. Building on insights from the literature and a longitudinal case study of a local, grassroots social business venture operating in Brazilian slums and shantytowns (favelas), we uncover and theorize eight mechanisms by which an innovative social business model brings about institutional change and creates social value. These mechanisms are: orchestrating local business networks, developing local business networks, upgrading and building cognitive capacity, legitimizing, assigning multiple roles, empowering, building a positive territorial identity (territorial de-stigmatization), and boundary spanning. Our findings have important implications for social entrepreneurs and organizations supporting social business ventures in transforming economies.

We study two quick-service restaurant (QSR) chains based on regional ethnic foods that were launched in China and India. The products that these QSR ventures offered had hitherto been sold by fragmented street vendors who typically operated single outlets. Inspired by the successful business models of international QSR brands, these entrepreneurs developed business models to popularize their chosen regional ethnic foods in multiple new regions and grew their organizations to 1,400 and 300 outlets in China and India, respectively. We build on the recently coined concept of ‘secondary’ business model innovation (SBMI), which is based on inter-organizational learning, break down its constituents into creative and imitative, specify the mechanisms through which it is achieved, and propose that it is a specific case of the more general construct of creative imitation.