Abstract
We explore the role of CEO framing for the adoption of new business models by incumbent firms faced with disruptive business model innovation (BMI) in their industry. Our historical analysis of two extreme cases in the bookselling industry—Borders and Barnes & Noble (B&N)—reveals that in reaction to Amazon’s entry the incumbents followed distinct logics. We find that CEOs’ BMI opportunity framing, in particular intensity, precision, future orientation, and inclusiveness of opportunity framing, was associated with actions that incumbent firms took over time towards separation of new and legacy business models or their blending. Contrary to conventional wisdom, sustained separation accompanied by weak opportunity framing (Borders) was an inferior strategy while gradual blending supported by strong opportunity framing secured B&N’s survival. We link and contribute to literatures on disruptive innovation, BMI, and framing.
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