Learning while (re-)configuring: Business model innovation processes in established firms

Abstract

Although business model innovation may be a significant source of competitive advantage, the process of business model innovation has received scant attention in research. Therefore, we address the question of how established organizations develop and refine new configurations of business model components over time. We use a process research approach to trace how business model innovation trajectories unfolded in four case studies. Using organizational learning theory as analytical lens, we discern five different modes of organizational learning and thereby move beyond experimentation and trial-and-error learning that tend to be used interchangeably in the literature on business models. Only two learning modes are invoked in all trajectories: learning before doing and trial-and-error learning. Apparently, these two modes of learning are indispensable, whereas the other modes of learning (experimental learning, but also reinterpretation and improvisational learning) may be effective or required, depending upon the conditions at hand. We also identify two patterns of how modes of learning are combined with each other during business model innovation trajectories: Experience-to-Search and Search-to-Experience. We discuss the implications of these findings for theory on business model innovation and organizational learning.