Disruptive Business Model Innovation Research Articles

Disruptive Business Model Innovation and Digital Transformation

Abstract Background Innovating how organisations run their business is a strategic decision to create more value for customers using or consuming the product and/or service provided. In addition to the incentive of everybody embracing digital transformation, digital technologies, and digital innovation, which frame changes of operating business models today, disruptions, i.e., another incentive that occurs suddenly and impacts globally, all force businesses to adapt and change. Objectives This research aims to provide a conceptual model that can be used for organisations to evaluate and propose feasible options for responding to disruptions that influence the businesses’ strategic innovation initiatives while assisting decision-makers in choosing the most appropriate option. Methods/Approach Considering internal and external factors that influence digital transformation, the conceptual framework is designed to assess readiness and willingness to transform and create opportunities for future success digitally. Results A conceptual framework was developed, tested, and demonstrated in a case study. The case study organisation rated positively the composition of steps to be perf readiness and willingness and choose the most feasible option to change. Conclusions: The digital environment and the influence of disruptions force organisations to change. The conceptual framework developed in this research helps the management choose the most feasible change option about the real as-is and the desired to-be state.

Incumbent Response To Disruptive Business Model Innovation and CEO Opportunity Framing

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.

Organizational Structures Leveraging Disruptive Innovations: A Conceptual Framework

Companies are facing challenges to survive due to substantial transformations induced by digital technologies. Thus, companies need to be innovative to sustain competitive advantages. Recent literature recognizes the potential of disruptive innovations as a key factor for a company’s competitiveness. However, disruptive innovations often challenge established companies due to the conflict between their existing business model and the newly emerging, disruptive business model. This study investigates how established companies can overcome such challenges and successfully develop and implement disruptive business models. In particular, we analyze different organizational structures proposed in the literature that promote disruptive business model innovations in established companies. On the basis of a systematic literature review, we conceptualize a framework linking the different organizational structures to the challenges arising from conflicting business models. The developed framework identifies which structures leverage the capability of established companies to implement a disruptive business model and thus strengthen its competitiveness.

Disruptive Business Model Innovation and Digital Transformation

Disruptive Business Model Innovation and Digital Transformation

The Ecosystem Strategy: Disruptive Business Model Innovation

The fourth industrial revolution has long since begun and is leading to an economic reorganization with significant changes for organizations, leadership, and society. With increasing global competition, established companies would be forced out of the market if they do not collaborate with agile innovators from outside their industries. This article contains instructions on how existing and disruptive business models can be combined with an ecosystem strategy and used as an opportunity. Case examples and practical models guide managers to identify and evaluate ecosystem strategies to generate new added value for the next generation of customers. Note: This paper is an enhanced and translated version of an article originally published under the title Die Oekosystemstrategie in Zeitschrift Fuhrung und Organisation (zfo), Vol. 89, No. 3, June 2020, pp. 168-173. The publication is a highly respected peer-review journal, focusing on leadership and organization./

Responding in kind: How do incumbent firms swiftly deal with disruptive business model innovation?

Abstract Disruptive business model innovation (BMI) is a threat to incumbents. This study elaborates a new approach, developing a novel business model (BM) swiftly, to dealing with this threat rather than either imitating disruptive BMI or strengthening the existing BM as prescribed in the literature. Findings show that incumbent firms can swiftly develop a new BM through a two stage process. In the separation stage, firms establish autonomous units to experiment via experiential learning, which creates multiple BMs in co-existence. Subsequently, in the integration stage, the various BMs are consolidated into an integrated new BM, via learning from other industries.

Leading for constructive innovation: Preliminary evidence from China

Abstract Disruptive innovation theory has received widespread attention. With the rapid development of the Chinese economy, Chinese firms accomplished many instances of innovative disruption in recent years, and many latecomer companies are gradually growing into world class innovative companies. As an emerging economy, it is necessary to analyze how China may achieve more disruptive innovations in the future, and what Chinese companies should do when faced with disruptive innovation threats and opportunities. We investigated several Chinese companies' disruptive growth with the aim of further developing the original disruptive innovation theory by incorporating Chinese experience. We divided disruptive innovation types into disruptive strategy innovation, disruptive technology innovation, and disruptive business model innovation, and then analyzed their characteristics separately. Using this perspective to examine different Chinese companies’ innovation processes, and adopting holistic innovation theory, we built a model for leading constructive innovation that bypasses the western disruptive innovation and creative destruction model. We propose this as a useful alternative framework for global corporate innovation.

Enabling environments for regime destabilization towards sustainable urban transitions in megacities: comparing Shanghai and Istanbul

Sustainable urban transitions promise high mitigation and adaptation potential to address the effects of anthropogenic climate change. The two coastal megacities studied in this paper, Shanghai and Istanbul, have the potential for low-carbon urban transitions that can destabilize existing regimes. The destabilization is brought about by the disruptive business model innovations of the sharing economy in Shanghai’s mobility sector and by the energy-efficient practices developed alongside the intensification of the building sector through the process of urban renewal in Istanbul. However, the emergence of such urban transitions through the actions of agents relies on the existence of enabling environments for regime destabilization. In a comparative case study of Shanghai and Istanbul, we assess the challenges of realizing regime destabilization opportunities through an enabling environment framework. We find that without adequate enabling environments for regime destabilization, urban transitions to sustainability may fail to achieve effective low-carbon action and make progress towards meeting the sustainable development goals. We also show that while deliberate and collective efforts are underway from multiple agents within and beyond the two megacities, the environments for regime destabilization in the building and transport sectors considered remain insufficient primarily due to conflicting priorities among key agents in the underlying urban systems.

Artificial Intelligence Modelling Framework for Financial Automated Advising in the Copper Market

Financial innovation by means of Fintech firms is one of the more disruptive business model innovations from the latest years. Specifically, in the financial advisor sector, worldwide assets under management of artificial intelligence (AI)-based investment firms, or robo-advisors, currently amount to US$975.5 B. Since 2008, robo-advisors have evolved from passive advising to active data-driven investment management, requiring AI models capable of predicting financial asset prices on time to switch positions. In this research, an artificial neural network modelling framework is specifically designed to be used as an active data-driven robo-advisor due to its ability to forecast with today’s copper prices five days ahead of changes in prices using input data that can be fed automatically in the model. The model, tested using data of the two periods with a higher volatility of the returns of the recent history of copper prices (May 2006 to September 2008 and September 2008 to September 2010) showed that the method is capable of predicting in-sample and out-of-sample prices and consequently changes in prices with high levels of accuracy. Additionally, with a 24-day window of out-of-sample data, a trading simulation exercise was performed, consisting of staying long if the model predicts a rise in price or switching to a short position if the model predicts a decrease in price, and comparing the results with the passive strategies, buy and hold or sell and hold. The results obtained seem promising in terms of both statistical and trading metrics. Our contribution is twofold: 1) we propose a set of input variables based on financial theory that can be collected and fed automatically by the algorithm. 2) We generate predictions five days in advance that can be used to reposition the portfolio in active investment strategies.

Responding to disruptive business model innovations: the case of traditional banks facing fintech entrants

The revolutionary changes brought by fintech entrants (“Fintechs”) in the financial services sector has caused severe turbulence in the operational and service activities of the incumbent ‘traditional’ banking organizations (“Banks”). Prior research in strategy and marketing literatures has suggested several general options for incumbents’ strategic responses to entrants with disruptive business models, such as competition, alliance or acquisitions. So far, however, no research paper has offered a systematic framework to guide an incumbent bank’s choice of the appropriate strategic response based on its assessment of the nature of the threat posed by a fintech entrant in its domain. In this conceptual article, we first review the evolution of the current fintech challenge to well-established traditional banks taking a marketing perspective that amalgamates key marketing concepts with an understanding of millennial lifestyles. Next, we define four categories of the type of threat posed by a fintech entrant to an incumbent bank by distinguishing between high and low levels of market-centered disruptive threats and technology-centered disruptive threats as perceived by the incumbent. Based on this categorization, we identify with supporting rationale the incumbent bank’s most appropriate choice from the strategic options of Buy, Make, Ally, Hold or Exit considering the type of fintech threat it faces. We also provide several case examples from the Indian context to support our prescriptions.

Understanding the disruptive business model innovation of E-business microcredit: a comparative case study in China

ABSTRACTThis paper uses an in-depth case study approach to compare and analyze e-business microcredit firms and traditional bank business models in China, employing a business model template redefined as an analytical tool. The results suggest that the EMF business model has typical disruptive innovation characteristics, shedding new light on the definition and criteria of disruptive business model innovation as little research has done on its systematic analysis. This study also presents a holistic conceptual framework for four triggers constituting their business model difference, inclusive of non-mainstream customer positioning, inclusive platform-based infrastructure, platform-based leveraged capability, and user experience-centered value proposition.

The Disruptor's Gambit: How Business Model Disruptors Use Framing for Strategic Advantage

Despite increasing interest in disruption, there is only limited scholarship that considers the strategic use of framing associated with disruptive business model innovation in the competitive inte...

Toward A Typology of Incumbent Response to Disruptive Business Model Innovations

Disruptive business models are interesting phenomena due to the potentially radical impact they have on incumbent industries. Although typologies of disruptive business models are beginning to take shape, the few established typologies focus on specific factors. Even though they are promising, a comprehensive, yet generalized typology has yet to be derived to enrich the diverse literature. Using inductive theory, we develop a typology of the incumbents’ responses to disruptive business models in order to further advance research in the field, basing on the salience of the business model and managerial interpretation. In this paper, we investigate four specific industry cases and the respective disruptive business models. The industry incumbents are Enterprise Servers, TV Networks, Hospitality, and Taxi. The respective disruptors are Amazon and Microsoft, Netflix, Airbnb, and Uber and Lyft. We analyzed how the industry incumbents responded to these disruptions. The research contribution and implications are also discussed.

Exploring the Multi-Phase Driven Process for Disruptive Business Model Innovation of E-Business Microcredit: a Multiple Case Study from China

This paper uses a multiple case study to reveal and analyze how the disruptive business model innovation of e-business microcredit firms is driven by the three phases of discovering, screening, and combining and matching drivers with an internal business model. The results suggest that it is the integrated forces of the market, technology, policy, competition, and entrepreneurs’ groups to drive the process, and whose specific sub-drivers are further analyzed and have a significant impact on the second phase. The types of disruptive business model innovation of e-business microcredit firms are determined by matching the criteria and methods of entrepreneurs groups in terms of risk consideration. As little research has been done on the systematic analysis of the driven process of disruptive business model innovation from a holistic perspective of drivers, this study makes a contribution to complete the understanding of this process, especially in the e-business microcredit arena. This study also gives renewed knowledge to disruptive innovation theory. This study assesses managerial implications to the development and prediction of internet financial service firms.

MODEL EKONOMI BERBAGI “Mobile-SECO” (PLATFORM MULTI-SIDED MARKETS) SEBAGAI EKOSISTEM SOSIO-EKONOMI ISLAMI

The most disruptive business model innovation of 21st century global market place is sharingeconomy. The value of sharing is indispensable to unlocking ambiguity, paradox and the uncertainty ofeconomy. Sharing economy by definition has to design socio-economic ecosystem between communitieswho share features of production. Sharing economy hold three core features: (1) digital platform, (2) access ofownership and (3) deeper social interaction. Mobile SECO will comes as a platform of multi-sided marketswhich aims to developers capturing value of socio-economic ecosystem. With that value, Mobile-SECO willhelps users and developer campaign the project to be shared with all of social media, that’s what we call Mini-Campaign Platform (MCP). Hopefully, Mobile-SECO will become a platform that can attract developers toimplement of fiqh muamalah as community service obligations.

An Analysis of Salesforce.Com, a Cloud Based Solutions Provider, Best Known for Its Customer Relationship Management (CRM) Products

The Software as a Service (SaaS) industry is under attack by the likes of companies like Salesforce.com. Salesforce.com, founded in 1999, has taken advantage of a disruptive business model innovation to gain significant market penetration for the Customer Relationship Management (CRM) arena. The company went public in 2004 and up until December 2011 has acquired numerous other technology companies, which individually introduced disruptive innovation solutions, to enhance Salesforce.com’s ability to offer cloud based technology and solutions to its customers.This article will analyze, Salesforce.com, one of the most successful examples of a company that has been able to transition from a traditional management model to a radical management model. The factors affecting the transformation influenced every aspect of the organization from strategy development through execution.

Disruptive Business Model Innovation: How a Tech Firm is Changing the Traditional Taxi Service Industry

Speaking at the IOD Annual Convention 2014 in London, Travis Kalanick, CEO of made a bold statement that Uber is not a taxi service provider. This statement took everybody by surprise as has become one of the biggest taxi service providers, having global presence in more than 55 countries and 200 plus cities worldwide. has emerged as a biggest start-up in corporate America since the last 5 years, and is expected to overtake some of the biggest companies in United States in a couple of years down the line. The company was expected to touch $10 billion in revenues by the end of 2015, while a company like Facebook, after completing 10 years of its operations for the first time, is expected to earn $10billion in revenues this year. The case highlighted how has transformed a traditional capital intensive industry into a high-tech business. The company relies on an independent pool of contractors (cab owners/drivers) who register themselves on Uber's website and for every ride, 80% of the payment goes to the driver, and takes the rest 20%. The case further illustrated the various challenges which the company is facing in its global expansion, particularly in countries like Spain and India, and questioned the validity of surge pricing.

Medknow Publications: a success model in the digital era

Subject area Innovation Strategy/Entrepreneurship. Study level/applicability The case can be used in an MBA/postgraduate management program for a course on Innovations Strategy with a focus on disruptive innovation, specifically in relation to disruption in the value chain with the adoption of new technologies or for a course on Entrepreneurship focusing on the opportunities created by the Internet-based technologies for start-up businesses. Alternatively, it can be used in a course on e-commerce strategies, particularly to demonstrate the efficiency of online distribution vis-à-vis physical channels. Case overview The case illustrates how Medknow Publications created a profitable e-commerce model out of a struggling conventional business, namely, the learned society journal publishing. It also provides a useful ground to discuss the challenges faced by the conventional scholarly journal publishing models, the current crisis in scholarly journal publishing and how Medknow, a disruptive business model innovation, would address these issues. Besides, the case illustrates how Medknow created a sustainable “for-profit” alternative to the prevailing not-for-profit models of open access publishing. Expected learning outcomes After the analysis and discussion of this case, students will be able to: appreciate how technological innovation can disrupt existing business models; understand how digitization helps improve the efficiency of value chain in the content industry, particularly the scholarly journal publishing industry; and appreciate that the flexibility of digitized content and the global reach of the Internet have the potential to transform the scholarly journal publishing industry for good. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Corporate Entrepreneurship, Disruptive Business Model Innovation Adoption, and Its Performance: The Case of the Newspaper Industry

Recently, Internet and digitization, along with major news and information companies, have disrupted traditional newspaper companies' business models, and raised serious concerns about the future viability of the print newspaper industry. This study provides a theoretical viewpoint, supported by empirical evidence from the newspaper industry, on how prominent corporate entrepreneurship attributes impact disruptive business model innovation adoption, and how such adoption impacts business model performance. It finds that, while autonomy, risk-taking, and proactiveness do have positive associations with the extent of adoption of disruptive business model innovation, innovativeness does not. Further, disruptive business model innovation adoption has a nonlinear association with business model performance. We conclude the paper by discussing theoretical implications of the study and by providing strategies that entrepreneurs and technology managers can use to adjust their corporate entrepreneurship activities in their effort to successfully adopt disruptive business model innovation.

Investigating the feasibility of supply chain-centric business models in 3D chocolate printing: A simulation study

3D chocolate printing provides the technology for manufacturing chocolates layer-by-layer, thus offering customers enhanced product value and personalized consumption experience. As business models in the chocolate industry are closely associated with the profitability of the supply chain constituents, it seems appropriate to investigate the financial viability of these supply-chain centric business models prior to their introduction in the real world. In this paper we present two business models pertaining to the supply chain for 3D printed chocolates; we evaluate the financial viability of these innovative models through the use of computer modelling and simulation. The study is based on the commercialization efforts of a UK based 3D chocolate printing technology provider (Choc Edge). The results of the study indicate that 1) the retailer dominant supply chain model is a potentially disruptive business model innovations that are enabled by the 3D food printing technology, and as such, may pose a challenge to traditional high end chocolate products; 2) the manufacturer dominant model helps manufacturers gain more profits while retailer profits tend to be stagnant.