The Effect of Strategic Agility on Business Model Innovation

Abstract

In recent years business model innovation was identified as a fruitful way to increase competitive advantage for firms and thus received a great attention from practitioners and academic researchers. However, most of the existing studies focused on definition and conceptualization of the concept. Recent literature reviews called for more research on the enablers of companies to be able to react to changing environmental conditions and adapt business models continuously. We address this research gap theoretically and empirically. We Based on dynamic capability theory, we identify the three dimensions of strategic agility, namely strategic sensitivity, leadership unity and resource fluidity as enablers of business model change and firm performance. Our theoretical model is tested based on survey data of 150 SMEs in the electronics industry. Our study empirically proves that strategic agility can foster business model innovation. Further, it is shown that business model innovation indeed leads to a higher firm performance.