Set up to fail: Explaining systemic problems in the business model of in-home aged care

We seek to explain the role of external environmental constraints in embedding systemic problems within a dominant industry business model. Using qualitative data from the 2019-2021 Australian Royal Commission into Aged Care Quality and Safety, we show how three sector-wide constraints" channel constraints, revenue constraints and resource constraints" impinge on the business model for in-home aged care services, creating direct, first-order effects by embedding systemic problems directly within business model components. We also explain how second-order effects occur through interdependencies with other business model components. We discuss the consequences of our findings for value creation and value capture, and the implications for the delivery of quality care to older people. Through this analysis, we also contribute to the business models literature by extending our understanding of the impact of external factors on business model performance, innovation and managerial choice. JEL Classification: L2 - Firm Objectives, Organization, and Behavior, M4 - Accounting and Auditing, I11 - Analysis of Health Care Markets.