Business Model Innovation Literature Research Articles

To replicate or to renew your business model? The performance effect in dynamic environments

It is often assumed that business model innovation drives firm performance, especially when firms operate in highly dynamic environments. However, despite the rise in research on business models, there is little systematic evidence of how various levels of environmental dynamism actually influence the performance effects of two basic types of business model innovation, namely replication (i.e., scaling up and improving an existing business model) and renewal (i.e., introducing a new business model). In this paper, we delineate a conceptual distinction between these two types of business model innovation and investigate how environmental dynamism impacts their performance outcomes. Based on a cross-industry survey that includes both SMEs and larger firms, we show that environmental dynamism weakens the positive effects of business model replication on firm performance. By contrast, in environments where the level of dynamism is intermediate, rather than high or low, environmental dynamism strengthens the performance effects of business model renewal. We discuss how these insights contribute to the business model innovation literature and how they can provide top managers with guidance on when and how to innovate a business model to turn it into a competitive advantage.

How established firms build digital capabilities for business model innovation: An exploratory case study

Due to rapid digital advancements, established firms are actively pursuing business model innovation to seize emerging opportunities. By effectively managing digital technologies and related resources, digital capabilities play a crucial role in enabling such innovation. Through an exploratory case study of two established Chinese firms, we propose a process model that reveals a hierarchical structure of digital capabilities and two distinct approaches for utilizing these capabilities to enable exploitative and exploratory business model innovation, respectively. This study contributes to the emerging business model innovation literature by showcasing how digital capabilities are developed and utilized to facilitate business model innovation.

5G is not Just Another G: A Review of the Managerial Literature

Due to the higher range of markets and applications opportunities it brings, the fifth generation of mobile communications (5G) cannot be considered just a technological transition, as it was for earlier generations of cellular technology, rather it represents a revolutionary phenomenon which could deeply change the competitive landscape for wireless services. According to the literature, it is “one of the most complex technologies seen over the past decade both in terms of technical development and business implications”. However, on one hand, the 5G is a hotly discussed topic from a technical perspective, on the other the managerial literature appears ambiguous and fragmented in the way it is presented. Such absence recalls for a paper whose purpose is to position the 5G search thread also in the managerial literature. For this reason, the work aims to systematize previous knowledge and identify potential research directions related to the strategic adoption of 5G technology. To answer the underlying research question regarding the state of the art of the 5G in the strategy domain, a systematic search has been done, then, on the selected papers, a conceptual review has been carried out to identify (i) the “business reconfigurations” of 5G technology, (ii) the boundary conditions, intended as the conditions of existence of a 5G business case, (iii) the barriers, which instead hinder the development of cases. The research provides useful implications to both the theory and practice: from a theoretical perspective, it represents one of the first studies concerning 5G which is not strictly related to a specific industry or scenario. Secondly, the challenges and gaps identified generate research questions which can be traceable also to a general and more theoretical context, such as the business model innovation literature, where the strategic adoption of new technological paradigms entails further investigations. From a practitioner’s perspective, it provides useful insights regarding 5G adoption for increasing actors’ awareness of such technological innovation, especially concerning their attitude change which is needed to seize the business opportunities it embraces.

Conceptualizing business model piloting: An experiential learning process for autonomous solutions

Business model innovation supports manufacturers in the pursuit of new opportunities. However, successfully innovating a new business model presents a significant learning challenge, especially for highly advanced offerings, such as autonomous solutions. Experiential learning approaches, such as business model piloting, are crucial for fine tuning and scaling new business models, yet the current literature fails to adequately examine business model innovation in the context of advanced industrial offerings. In endeavoring to advance current research, we apply a business model piloting lens to advance understanding of how manufacturers engage in business model piloting for autonomous solutions. Our research builds on a multiple case study of piloting initiatives at two manufacturers, involving 32 interviews with senior managers responsible for autonomous-solution business model pilots. This study proposes a business model piloting framework to support manufacturers in overcoming business model innovation challenges. The framework consists of three phases: business model design, business model validation, and business model institutionalization. Each phase includes key business model piloting activities. We also identify three principles that support experiential learning in business model piloting. We contribute to the business model innovation literature by highlighting the strategic and multi-dimensional nature of business model piloting. This process requires simultaneous configuration of novel technologies for value creation and the design of suitable value delivery and capture mechanisms.

Frugal business model innovation in the Base of the Pyramid: The case of Philips Community Life Centres in Africa

This paper investigates how a multinational enterprise (MNE) engages in frugal business model innovation to find the optimal balance between value creation and value capture in resource-constrained contexts in sub-Saharan Africa. Using qualitative content analysis, we analyse the case of Community Life Centres (CLC), a primary healthcare innovation developed by Royal Philips N.V., a multinational technology organisation headquartered in The Netherlands. Our findings show that an MNE can innovate by developing multiple iterations of the same business model—customising it to different geographical markets. Some aspects of the business model remain static, while others are dynamic. In this regard, the innovation process in a resource-constrained service sector is pegged on the financing model, and target markets are adjusted based on financial opportunities available, while the value proposition and costing mechanisms remain relatively static. This paper contributes new insights to the frugal innovation and business model innovation literature.

Drivers for Platform Business Model Innovation: Individuals in Control over their Personal Data

Personal data has become an important resource in today’s market and in platform business models. In fact, the essence of many platform business models is to create value for an individual by offering a free service and to capture value by collecting and selling collected data. In this study, we analyse the drivers for platform business model innovation in the context of personal data used in the healthcare sector. Platform business models are shaped and designed with respect to the internal and external drivers in the market. However, few studies have increased our understanding of the drivers for platform business model innovation. For that, we conducted an exploratory study for five personal data platform providers that enable individuals to control the use of their personal data in digital services by interviewing the personal data platform providers and using company presentation material. The findings show that by adopting a human-centred approach to personal data, giving control over data to the individual, personal data platform providers change how value is created and captured. This research has managerial implications and contributes to the business model innovation literature by extending the current knowledge about drivers for personal data-based platform business model innovation in the healthcare sector.

Dyadic business model convergence or divergence in alliances? – A configurational approach

In this study, we contribute to the scholarly conversation on firm-level business model changes following a neoconfigurational approach. By exploring configurations of business model changes over time, we add the direction of business model changes—namely business model convergence or divergence—as a vital avenue to the business model innovation literature. We identify necessary business model convergence and divergence recipes in a sample of N = 217 strategic dyadic alliances. Firstly, technological proximity emerges as a single pre-condition to both converging and diverging business models. Secondly, business models between competitors either converge through complementarities or tend not to change relative to each other. Thirdly, equity participation enables business model divergence through co-specialization. We conclude with a discussion of business model trajectories and future research directions.

Sustainable business model innovation literature: a bibliometrics analysis

Sustainable business model innovation (SBMI) has received growing attention since it can provide sustainable competitive advantages for corporations under a dynamic external environment. This paper aims to understand the current situations and progress of SBMI research by conducting a bibliometric study of the existing literature. By collecting data from Web of Science and using bibliometric tools, the basic characteristics of SBMI research are first presented to show the productivity and citations of publications utilizing recognized bibliometric indicators. Then, the cooperation networks among countries/regions, institutions, and authors are drawn to determine their collaborative relationships. Furthermore, keyword analysis is presented to explore the evolution of the hotspots and themes of SBMI research through co-occurrence analysis, burst detection analysis, and thematic evolution analysis. Finally, we integrate the antecedents-decisions-outcomes framework for SBMI research. The findings in this study indicate that the development of SBMI research is positive and that greater collaboration among institutions and authors is required to explore the internal drivers and design SBMI as well as other topics to be developed.

Towards blockchain led decentralized autonomous organization (DAO) business model innovations

PurposeToday, business model innovations leverage digital technologies to gain a competitive advantage and transform business processes. Blockchain is still gaining attention in specific fields and bringing value to business models. There is a dearth of research on how blockchain decentralized autonomous organizations impact organization business model innovations. This study attempts to contribute the body of knowledge based on a review of decentralized autonomous organizations and the business model innovation literature using the integrative and generative approach.Design/methodology/approachThe paper offers an analysis of decentralized autonomous organizations based on digital business models built on the well-established work by Osterwalder and Pigneur (2010). The practical multilayered decentralized autonomous organizations architectural implementation model design is achieved using practical archetypes depicted in the proposed decentralized autonomous organizations business model. The paper evaluates a marketplace comprising 13 decentralized autonomous organizations led platforms with core functionalities.FindingsThe paper delivers decentralized autonomous organizations led digital business model canvas elements to explain decentralized autonomous organization business model innovations. It presents the underlying multilayered decentralized autonomous organizations architectural implementation model required to conceptualize a practical business model with an enterprise-ready target operating model.Research limitations/implicationsThe paper contributes directly to the practical decentralized autonomous organizations business model canvas, exemplifying the nine elements of decentralized autonomous organizations’ characteristics for any organizational transformation. The tools and accelerators (business model, layered architecture, target operating model and product mapping) developed in the paper address the managerial challenges of redesigning the decentralized business models.Originality/valueThe proposed decentralized autonomous organizations smart contract powered business model provide a digital platform to adhere to rules, follow policies, preserve principles and develop consensus without human interventions. The paper shapes the first of its kind decentralized autonomous organizations marketplace evaluation while mapping it to decentralized autonomous organizations layered architecture product requirement considering business model dimension to adopt actionable target operating model.

Organizational change in response to environmental complexity: Insights from the business model innovation literature

AbstractOrganizational change research to date has tended to proliferate on a conceptualization of change as a deliberate process driven by rational and formal strategic planning and fuelled by the expansion of exploitative resources. This conceptualization entails that change is essentially a process of reproduction in that it occurs along existing (incremental and cumulative) trajectories. Prompted by the need to manage increasingly complex and uncertain environments and foster progress towards sustainable development, the question of what are the exploratory forces that stimulate the capacity of business organizations to engage in discontinuous shifts towards new (flexible and creative) trajectories, without excessively disrupting existing ones, has comparatively been neglected. This paper contributes to address gaps in existing research by exploring how organizational change in response to complexity is framed in the literature on business model innovation. Three core categories of constraints to change are identified: relational flaws, functional flaws and the lack of moral motives; and three interacting forces that can be harnessed to overcome these constraints are suggested: sociability, agility and moral inclusivity. The resulting framework has broad implications for organizational change theory, practice, policy and research.

Responding to Complementary-Asset Discontinuities: A Multilevel Adaptation Framework of Resources, Demand, and Ecosystems

We examine how incumbent organizations respond to complementary-asset discontinuities — technological changes that introduce new manufacturing, distribution, and sales assets but leave the incumbents’ core knowledge preserved. To examine this increasingly common but relatively overlooked phenomenon, we conducted an inductive study of how six newspapers adapted to Internet distribution from 1995 to 2019. Our contribution is a framework that highlights three levels of adaptation (resources, demand, and ecosystem) with related mechanisms and necessary outcomes. At the resource level, incumbents adopt the new complementary assets according to the perception of synergies with their existing core knowledge. At the demand level, the extent to which incumbents update their beliefs about value creation depends on how much they experiment with customers. At the ecosystem level, higher experimentation in the ecosystem helps incumbents to update their beliefs about value capture. The research offers important implications for the technological change, strategic management, and business model innovation literature.

The innovation ecosystem in rural tourism and hospitality – a systematic review of innovation in rural tourism

PurposeInnovation in rural tourism and hospitality (RT) is a complex process that involves the exchange of knowledge and resources between many actors and the interrelationships between those actors in the business environment. The purpose of this paper is to provide structure to this “knowledge and resource ecosystem” through a thorough systematic review of the extant literature.Design/methodology/approachThe current study uses a time-tested and reproducible systematic literature review process to identify and analyse 79 research papers that have discussed innovation in RT.FindingsThrough content analyses, this review identifies critical stakeholders in the innovation ecosystem, as well as the enabling and hindering roles these stakeholders play in innovation. The thematic analysis uncovers three key research foci: stakeholders and their roles, outcomes of innovation and business model innovation. The review also identifies types of innovation and critically analyses the bibliographical research profile. The authors summarise the findings in an RT innovation ecosystem model, which includes the various actors and their knowledge and resource sharing roles within the business environment.Originality/valueThis is one of the first systematic reviews to concentrate on RT innovation and, within that focus, on knowledge and resource networks in particular rather than on innovation in tourism in general, which was the focus of prior reviews. The authors encourage cross-pollination of ideas by introducing theories from the strategic management, innovation, knowledge management and business model innovation literature wherever appropriate. To consolidate and present the findings on the innovation process’s antecedents and outcomes, the authors present an ecosystem of innovation within the RT framework.

A Bibliometric Analysis of Product-Service Systems’ Design Methodologies: Potential Root-Cause Identification of PSS’ Failures

Product-service system (PSS) innovation is acknowledged as a promising way to achieve sustainability through better exploitation of given resources. Nevertheless, PSS implementation is also described as increasing failure risk for companies. Despite that authors have identified paradoxical situations as a source of failure while implementing PSS, few researches have focused on understanding the origin of these paradoxes. In this review, we aim at understanding how methodologies cope with the challenges of designing PSS throughout the complete company perimeter as well as how to manage interactions within this perimeter to avoid potential paradoxes and thus failure. To do so, we will rely on the business model innovation literature and, more specifically, the business model canvas to define and discretize the company perimeter. As for the interactions and their imbrication regarding paradoxes appearance, we will refer to Putnam et al. theory to gain deeper understanding of paradoxes-appearance mechanism. Our bibliometric strategy brought us to analyze 14 international articles via our graph, enabling us to highlight that some poles’ interactions during design are partly unaddressed, resulting potentially in the creation of tension sources and therefore potential paradoxes and ultimately implementation failure. Considering this, future research works could focus on defining all significant interactions to consider while designing a PSS as well as the typology of answers to engage while facing tensions. In that respect, these works could provide actionable solutions to lower PSS implementation-failure risk, thus benefiting those who wish to achieve better sustainability through PSS.

Rocking the Boat: Proposing a Participatory Business Model for News

The digitization of newspapers has opened up new possibilities for user involvement, yet established practices in the media industry hinder news organisations from fully exploiting the many new opportunities that exist in the age of the Internet and social media. In this conceptual and interdisciplinary article, we explain how news actors’ strategic choices for innovation related to citizen collaboration and knowledge creation leads to distinct ideal types for participatory business models for news organisations, which we label the three C’s (citizen reporting, citizen journalism, and citizen media). We contribute to the business model innovation literature by pointing to which specific parts of a business model that news actors need to change in order to cut their production costs, as well as contributing to innovation theory by showing that the three C’s is a continuum of innovational steps. We develop further the donation strategy for user involvement by discussing citizen collaboration in different parts of the journalistic value chain. We conclude that news actors need to rock their boats in order to innovate their business models in line with today's media landscape.

Revenue Models for Digital Servitization: A Value Capture Framework for Designing, Developing, and Scaling Digital Services

Manufacturing companies are currently undergoing a digitalization transformation in which digitally enabled, new, and innovative advanced service offerings are being launched. These so-called “digital services” represent a shift in the business logic of manufacturing firms, from up-front product sales to advanced service contracts. This business model shift has profound implications for cost structures, risk management, and revenue streams, providing manufacturing companies with the key challenge of rethinking how to capture value. Using a multiple case study of 11 companies, the purpose of this article is to enhance knowledge on how to design new revenue models for digital services. Results reveal a revenue model design framework of key phases and activities that carries implications for the emerging literature on digital servitization, as well as the business model innovation literature. The findings reveal a highly customer-centric, iterative, and agile process where close collaboration with key customers during the early stages guides the framing of revenue models for digital services. For practitioners, it provides hands-on advice on how to implement the design, development, and scaling processes for revenue models in the context of new digital services.

Business model innovation: Identifying foundations and trajectories

AbstractBusiness model innovation is an emerging hot topic in management research. It has been developing steadily for 20 years and has gained enormous momentum in recent years. A solid basis has been created, and the first literature reviews summarize the topic. However, an analysis of the core literature and the general foundation of business model innovation literature is missing. This gap is closed with this bibliometric. It analyzes 30 core articles referenced in 380 business model innovation publications. From this, a total of four research clusters can be delineated. This foundation of the research area is supplemented with a trend analysis of recent publications, which identifies three trends for the future of this research stream. The analysis highlights that sustainability, dynamic capabilities, and small‐ and medium‐sized enterprises are the most promising trends in business model innovation. Based on the results, we present a general model for business model innovation.

Examining the effects of governmental networking with environmental turbulence on the geographic searching of business model innovation generations

PurposeThis study aims to explore the relationship between geographic search and business model innovation and proposed a contingent framework to focus on how governmental networking and environment turbulence are interdependent moderate the relationship between geographic search and business model innovation.Design/methodology/approachA large-scale questionnaire survey was carried out among the firms in three high-tech parks of the Pearl River Delta, with a total of 287 firms as empirical samples. Hypotheses are tested using ordinary least squares analyzes on hierarchical multiple regression to find out how geographic search can drive business model innovation generations.FindingsThe empirical results showed that the more frequent geographic search is, the more favorable it is for firms to generate innovative business models, and firms may be more effective in geographic searching and business model innovation with better governmental networking. However, the above relationship may be weakened if the environment turbulence in emerging markets is further considered. It was argued that firms must take into account both the positive effects of governmental networking and the negative effects of environmental turbulence in conducting a geographic search for external knowledge resources to generate innovative business models. The study results showed how and why governmental networking can be a key catalyst for firms to generate innovative business models.Research limitations/implicationsThis study contributes to the business model innovation literature by documenting the large-scale survey evidence that confirms the practicality of geographic search in the business model innovation generations. The findings advance previous studies in the business model innovation by identifying the moderating roles of governmental network and environment turbulence that predict business model innovation behaviors in the emerging market.Practical implicationsThe results indicate that the geographic search can be easily operationalized for external resources acquisitions by managers in generating business model innovation. This has applications for external resource acquisitions on the basis of business model innovation in the emerging China market. In addition, to facilitate the business model innovation generations, the focus should be on critical contingency factors; on the one hand, to promote the continued use of external resources, the focus should be on enhancing benefits such as governmental networking.Originality/valueThe findings extend existing theory in three ways as the original value. First, the results show that geographic search is an important driver of business model innovation generations in an emerging market context. Second, this study is the first to take organizational learning and open innovation perspective to examine geographic search as a boundary-spanning search of external resources in business model innovation generations. Third, this study also explores the moderator role of governmental network and environmental turbulence on how to strengthen or impair the geographic search and business model innovation generations.

Dynamics of Constraints and Organizing Practices for Business Model Innovation

This research examines how organizational ingenuity enables organizational actors to turn constraints into new organizing practices for business model innovation. Adopting the case study method utilizing observations, interviews and internal meetings with key stakeholders of the popular ‘Lady First’ TV program in Taiwan, we analyze how, in the face of constraints, organizational actors ingenuously develop new organizing practices that enable the program to transform its business model in terms of value creation, value communication, and value capture. These organizing practices involve leveraging the knowledge of organizational actors to create value, incubating potential lead users to communicate value, and converting social capital into economic capital to capture value. Our paper contributes to the business model innovation literature by linking organizational ingenuity, constraints, and practices for business model innovation in the context of a creative services firm. The theoretical and practical implications of the study are also discussed.

Dominant Logic and Business Model Innovation: Resolving Cognitive Dissonance on the Component Level

Dominant logic is generally seen as a cognitive barrier in the different steps of business model innovation processes. This particularly applies to micro-firms, where the business owner espouses the dominant logic and at the same time plays a vital role in innovating and potentially changing it. We engaged in an action research with forty butcher’s shops’ owners to shed more light on the conflicts between dominant and emerging logics at every business model component (i.e. (1) value proposition, (2) value creation, (3) value network, (4) value delivery, and (5) value appropriation). Furthermore, these conflicts triggered a state of cognitive dissonance among dominant and emerging logics. To investigate how butcher’s shops’ owners restored equilibrium we subsequently conducted a multiple embedded case study, with four positive cases (i.e. innovative butchers), and four negative cases (i.e. non-innovative butchers). Positive cases resolved cognitive dissonance by embracing emerging logics through a set of consistent ideas supporting the emerging logic at all five business model components, assessing the limitation of the dominant logic at the value proposition, as well as on the value delivery levels. In contrast, negative cases resolved cognitive dissonance by adding elements sustaining the dominant logic at the value proposition, value creation, value delivery, and value capture levels, and by reducing the importance of factors supporting emerging logics at all five business model components. The present study contributes to the business model innovation literature, by pointing to the dual role of cognitive dissonance between dominant and emerging logics at the level of different business model components.

Disentangling the Complex Relationships Between Business Model Innovation and Firm Performance

Despite the increasing interest in business model innovation, literature still lacks solid empirical evidence about the consequences of business model innovation over time. Recent research called for more profound empirical investigations that assess the performance outcomes of business model innovation through longitudinal research designs. The purpose of our paper is to address this gap. Building on the business model classifications from previous scholars, differentiating three core dimensions (value creation, value proposition, value capturing), we collect cross- industry data based on more than 35,000 press releases capturing over 2,500 events of business model innovation from 60 German stock- market-listed corporations over an eleven-year period (2007-2017). We regress those against firm performance measures. Our findings show that business model innovation has a positive yet lagged effect on performance. We further find complementary, yet also substitutive effects of the different dimensions. Whereas value creation and value proposition innovation are substitutive in their relationship on firm performance, value capture innovation complements both other dimensions. The combination of all three dimensions is also substitutive. Our nuanced longitudinal findings on the performance consequences contribute to the business model innovation literature by clearly showing the need to carefully plan business model innovation activities at the level of strategic management.