Business Model Innovation: The Role of Industry Evolution and Competitive Pressure

Abstract

Nowadays, the concept of business model is considered as a competitive advantage because of its impact on the challenges that companies face in a changing environment. Industry structure and competitive pressures are some of the external factors that play an important role in the evolution of business model innovation and determine the company’s performance. Previous research shows different results about the relationship between competition and innovation, so some researchers describe a negative relationship and others a positive relationship between these two variables. This study aims to investigate how industry evolution and competitive pressure affect the innovation intensity of a business model. Manufacturers from the pharmaceutical and food industries were selected to investigate the hypothesis. The research model was tested using structural equation modeling and partial least squares (PLS) method. The results show that innovation intensity differs among industries that undergo different evolution. Moreover, the results have shown a positive relationship between competitive pressure and innovation intensity.