Types Of Business Model Innovation 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.

Knowledge digitization and high-tech firm performance: A moderated mediation model incorporating business model innovation and entrepreneurial orientation

In today's rapidly evolving digital landscape, knowledge digitization, facilitated by advanced tools such as artificial intelligence, big data, blockchain, and cloud computing, has captured significant scholarly attention. To comprehensively explore the implications and outcomes of this knowledge digitization trend, our study delves into its impact on the performance of high-tech firms. Based on the knowledge-based view, we develop a moderated mediation model to examine the mediating role of business model innovation and the moderating effect of entrepreneurial orientation in the relationship between knowledge digitization and firm performance. To test our hypotheses, we employ the PLS-SEM method, analyzing data from a sample of 291 Chinese high-tech firms. Our findings indicate that knowledge digitization has a positive effect on firm performance, and both types of business model innovation—novel and efficient—partially mediate the positive relationship. Additionally, entrepreneurial orientation is found to strengthen the relationship between knowledge digitization and business model innovation. However, it does not significantly moderate the connection between knowledge digitization and firm performance. Our research offers actionable insights for strategic development in the digital era and makes a substantial contribution to the existing body of knowledge in this field.

Research on Innovation of New Business Model Based on Internet Precision Marketing

Under the background of "Internet +", the development mode of enterprises has gradually moved from internalization to socialization, and the interaction between enterprises and customers has become more frequent. Under the background of industrial integration, the boundaries of enterprises have gradually disappeared, and cross-border operations have become the norm. As a new strategic resource, the Internet has been widely integrated into the economic and social system, promoting industrial restructuring and business model reform. The Internet has changed the transaction process of traditional commerce, connecting purchase and sale information, products and services, and providing conditions for the innovation of business models. This paper points out that value is the core of business model innovation through the relevant theoretical research of business model, analyzes the components of business model from the perspective of value, and proposes the types of business model innovation based on value. Based on the background of Internet development and precise marketing model, this paper analyzes the innovation path of business model.

Business Model Innovation in Transforming Economies: A Co-evolutionary Perspective for a Global and Digital World

ABSTRACTAlthough transforming economies offer many examples of business model innovation, they have been largely overlooked in academic research, with most studies focusing on what happens in developed countries. However, in their push to become innovation economies, transforming economies have become experimentation arenas for new ways of doing business. This special issue addresses the gap in business model innovation research in several ways. First, we develop a co-evolutionary framework in which we consider what type of business model innovation occurs in transforming economies (adoption, adaptation, or creation) and who the central players are (indigenous firms or MNEs). We show how, through business model innovation, indigenous firms have begun to challenge global industry leaders – despite not having the same resource advantages, proprietary technology, or market power – and we highlight the consequences of this for the domestic and global environment. Second, we discuss how the articles in this special issue advance research by contributing to a co-evolutionary perspective on business model innovation for a global and digital world. Third, to guide future research on business model innovation in the fascinating context of transforming economies we outline various directions that could build on our framework and the articles presented here.

Digital technologies catalyzing business model innovation for circular economy—Multiple case study

Digital technologies have been increasingly argued to enable circular economy business models. However, the extant research is based on conceptual and review studies, leading to a lack of understanding of how digital technologies enable individual firms in real-life settings to improve their resource flows and value creation and capture and thereby enable business model innovation to emerge. In this study, we conducted a multiple case study with interviews and document data from four Northern Europe-based forerunner firms with circular economy business models enabled by digital technologies, providing two key contributions to the extant literature. First, we generate an empirical evidence -based synthesis of improvements of resource flows and value creation and capture in firms’ businesses across industries, highlighting the critical role of knowledge generation. Second, we develop a model of four key types of business model innovation for circular economy catalyzed by digital technologies, varying on incremental and radical improvement to both the resource flows and value creation and capture, providing theoretical insights to both business model innovation and digital technologies in circular economy. For managers, we suggest suitable digital technologies for the key types, highlighting the importance of radical business model innovation catalyzed by data integration and analysis technologies.

Business model innovations in China: A focus on value propositions

Prior studies that examine business model innovations lack consideration on how value propositions are best developed in specific contexts or how restructuring other components can deliver on value propositions. This article first identifies three types of Chinese consumption behaviors—imitation-based “good-enough” consumption, renqing consumption, and face consumption—and their corresponding value propositions based on value-hierarchy theory. We then look at Chinese companies that illustrate how business model innovations that focus on the targeted value propositions are initiated, formulated, and implemented. In particular, we identify four types of business model innovations: imitation-based “good-enough” business models, renqing business models, face business models, and hybrid business models. We conclude with practical implications for conducting and implementing business model innovations in China.

Industrial internet of things business models in the machine-to-machine context

This study analyzes Industrial Internet of Things (IIoT) business models in the machine-to-machine (M2M) context. Thereby, it develops a conceptual framework to categorize different types of business model innovation for companies operating in the M2M business space. Business model innovations tend to cross multiple industries and drive ecosystems in which smart objects facilitate business models and service applications that are incrementally or radically novel in terms of their modularity or architecture. Our framework identifies four distinct types of IIoT business models: (I) Company-specific business models, (II) Systemic business models, (III) Value designs, and (IV) Systemic value designs. Moreover, it sheds light on different abstraction levels of business model building blocks and exposes the characteristics and differences in the value potential between the four business models. Finally, we advance the idea of ‘value design’ referring to business models of multiple actors coupled together, ultimately resulting in complex networks and ecosystems of diverse things, processes, and companies.

Effects of business model innovation on corporate sustainability: intervening role of organisational learning and strategic flexibility

In the current competitive economic environment, business models through their value creation mechanisms act as a support system in fostering the sustainability of a firm. Business model innovation is typically performed either by renewal or replication strategy. Drawing on the instrumental and integrative theories, a framework of hypotheses is developed that underlines the effects of business model innovation (renewal and replication) on a firm's corporate sustainability practices. The operational responsiveness of the relationship between business model innovation and corporate sustainability practices is tested using organisational learning, strategic flexibility as sequential mediating variables and environmental dynamism as a moderating variable. Using a conclusive research design, the present study employed survey questionnaire to managerial workforce of the select Indian pharmaceutical companies. Some of the findings indicate that the types of business model innovation significantly predict corporate sustainability practices; organisational learning and strategic flexibility acts as sequential mediators and environmental dynamism strengthens the relationship.

Remanufacturing with upgrade PSS for new sustainable business models

Starting from mid ‘90s, Eco-efficient Product Service Systems (PSSs) were indicated in literature as enablers toward a more sustainable and resource-efficient industry through re-use and remanufacturing. In this regard, academicians and practitioners outlined several advantages (environmental and economic) but also many barriers hindering their implementation, such as market acceptance and economic sustainability. Thus, the diffusion of re-use and remanufacturing PSS is currently limited and mainly restricted to markets accepting also out-dated products (e.g. B2B or emerging countries). To cope with this limitation, product upgrade in re-manufacturing was recently introduced. Upgrade cycles allow embedding technological innovation into products while remanufacturing, thus reaching advanced performances and satisfying evolving customers’ preferences over time. If coupled with the offering of advanced services, remanufacturing with upgrade would open the way to new disruptive PSSs able to revolution customers’ consumption behaviour, as well as the manufacturing business model of companies. The new remanufacturing with upgrade business models will make remanufacturing one of the main pillars of companies’ business value generation, allowing improved management of technology cycles and of products obsolescence. Thus, overall economic and environmental benefits will be maximised. However, the implementation of such business models represents a challenge for manufacturers. The evolution from a pure manufacturing towards a manufacturing/remanufacturing company, together with the transition from a product to a service-based offering, entails considerable changes in all the business model variables. Drawing on the theory of business model innovation process, incremental or radical innovation paths can be hypothesised for this transition. Despite the focus of recent research on Product Service Systems and on Circular Economy, remanufacturing-with-upgrade business models are rarely cited in literature and there is limited empirical evidence of companies having embraced them. To set the research framework in alignment with previous theory, this paper proposes a structured definition and configuration of innovative remanufacturing-with-upgrade business models. By looking at existing examples of companies having undertaken this type of business model innovation, different typologies of remanufacturing and upgrade business models are proposed. Companies were classified according to the identified PSS typologies and conclusions are derived, together with future research perspectives.

Common and Differential Effects of Organizational Learning on Business Model Innovation

Organizational learning is an essential driven factor for firms to conduct business model innovation. However, the specific role of different learning strategies in affecting distinct types of business model innovation are still, unfortunately, unclear. Utilizing the analytical lens of organizational learning theory, we explore the common and differential effects of two learning strategies on novelty-centered vs. efficiency-centered business model innovation. Our empirical study of 303 firms of China revealed that both exploratory learning and exploitative learning are positively associated with novelty-centered and efficiency-centered business model innovation. Interestingly, compared with exploitative learning, exploratory learning has a stronger impact on novelty-centered business model innovation, however, has a weaker impact on efficiency-centered business model innovation. These findings contribute to our understanding of the role of organizational learning in influence business model innovation that is distinct with other innovation types, and inform managers to optimize their learning strategies to drive business model innovation.

An Exploratory Study of the Impact of the Internet of Things (IoT) on Business Model Innovation

This paper introduces IoT categories used to build smart enterprises and discusses how Fortune 500 companies may use various IoT applications to innovate their business models. The authors' analysis reveals that there is a significant relationship between the type of IoT applications and the IoT adoption rate and there is also a significant relationship between the type of business model innovation and the IoT adoption rate. Finally, five implementation strategies for smart enterprise development are discussed.

Business model innovation

Purpose – The purpose of this paper is to develop a framework that expands business model innovation literature by including a social goal, the emerging markets (EMs) environmental characteristics and adopting a bottom-up perspective. Design/methodology/approach – This paper draws on a single-case study. Sistema Ser/CEGIN (SER–CEGIN) is an Argentine social business that offers high-quality medical healthcare to BOP users. Findings – The paper presents a new conceptualization on business model innovation that includes three dimensions: firm-centric, environment and customer-centric. The framework incorporates to the traditional framework on business model innovation, the social profit equation, the general and task environment and the end-user, as well as the dynamics between them. Research limitations/implications – While the authors acknowledge the importance of studying the components of the business model operating levels (economic, operational and strategic) to determine the type of business model innovation (revenue, enterprise and industrial), the framework incoporates the environment and customer-centric dimension. The suggested framework opens new streams of research both for the innovation business model literature as well as for the EMs – bottom of the pyramid (BOP) literature. Practical implications – To achieve economic and social goals, particularly in the BOP, firms need to adopt a bottom-up approach to understand the components of their business model that need to be modified. Originality/value – The paper proposes a novel business model innovation conceptualization which is useful for both researches to better study business models in the BOP and for firms to successfully operate in the BOP.

Business model innovation: an integrated approach based on elements and functions

Business model innovation can be used to acquire competitive advantages. In this paper, we applied an integrative approach to study business model in terms of elements and functions. In the paper, three types of business model innovations were discussed: original innovation, induced innovation, and imitative innovation. The major contributions of this paper are: (1) improving the understanding of the business models; (2) providing a new perspective on business model innovation; and (3) proposing the paths for business model innovation. The paper also discussed how new information technology may promote business model innovation.

BUSINESS MODEL INNOVATION AND STRATEGIC FLEXIBILITY: INSIGHTS FROM AN EXPERIMENTAL RESEARCH DESIGN

Firms engaging in business model innovation are likely to constantly experience environmental turbulence in which remaining strategically flexible is of crucial importance to ensure survival. Drawing on a dynamic capabilities perspective, a framework of hypotheses is established that emphasises the effects of business model innovation on a firm's managerial capabilities and its operational responsiveness that have been argued to antecede strategic flexibility. Using an experimental research design that is built on a between-subject analysis and embodies decision-scenarios, we show how three distinct types of business model innovation (value offering innovation, value architecture innovation, and revenue model innovation) impact on different dimensions of strategic flexibility (resource flexibility, coordination flexibility, and variety of managerial capabilities). Our findings indicate that remaining strategic flexibility is not an implicit result of business model innovation as we identify different effects of the distinct types of business model innovation on the individual dimensions of strategic flexibility.

How does business model innovation influence firm performance: the effect of environmental dynamism

Attention to business models has flourished over the last decade in the strategy literature. However, few scholars have investigated how existing firms are able to innovate their business model, either by replicating their existing model or renewal by creating a fundamental new business model. Moreover, there is lack of empirical research on the performance effects of these two types of business model innovation and the environmental contingencies that affect these relationships. This study fills these gaps in the literature by examining on the basis of a large scale survey the effect of business model replication and business model renewal on firm performance, and how environmental dynamism moderates these relationships. Our results indicate that both business model replication and business model renewal have a positive effect on firm performance. Furthermore, environmental dynamism weakens the positive relationship between business model replication and firm performance, but surprisingly it does not strengthen the performance effect of business model renewal. These findings contribute to a richer understanding of how two types of business model innovation, replication and renewal, influence firm performance under various levels of environmental dynamism.

A service science perspective on business model innovation

Using four basic principles of service science, we systematically explore value-proposition design as one type of business model innovation. Service science combines organization and human understanding with business and technological understanding to categorize and explain service systems, including how they interact and evolve to cocreate value. Our goal is to apply a scientific approach to advance design and innovation in service systems. Our foundation is service-dominant logic, which provides perspective, vocabulary, and assumptions on which to build a theory. Our basic theoretical construct is the service system, entities that are dynamic configurations of four kinds of resources. Our core principles center on the way value is computed within and among entities, how interaction is based on access to resources and their capabilities, and on how value computation and interaction depend on symbol processing and language guided by mutually agreed-to value propositions. In this context, service science can inform and accelerate value-proposition design by systematizing the search for adaptive advantages that improve existing offerings, create new offerings, or reconfigure the value-creating ecosystem.

Business model innovation for sustainable energy: how German municipal utilities invest in offshore wind energy

Offshore wind energy is considered to have tremendous potential for Germany’s future electricity supply. Due to the technology’s capital intensity, however, offshore wind energy has so far been considered the domain of large utilities. Municipal utilities on the contrary traditionally have strong ties to their community and conduct low risk business models at the regional and local level. Recently, however, German municipal utilities started to invest in offshore wind energy. Based on a series of interviews with municipal utility executives, the present study identifies two innovative business models and ten key drivers for municipal utilities’ engagement in offshore wind energy. It is found that the new business models may have significant further potential and help to stimulate the German market. The present study contributes to the industry debate by identifying business model blueprints for offshore wind and to the academic debate by suggesting three generic types of business model innovation with different characteristics.

Business model innovation strategy for sustainable value creation in corporation

Business model innovation creates differentiated value to customers by transforming various elements of doing business. Rather than focusing singularly on either the external or internal environment, the business model innovation aims to identify the optimal combination of internal resources, competence, and the external factors, such as customer's needs and new opportunity. However, due to lack of clear definition of business model innovation, and inability to generate company's core business model, business model innovation has been difficult for companies to lead next growth. This paper reviews existing definitions of business model innovation and explore existing types of business model innovation and timing of business model innovation through two case studies. Concept of business model innovation which we identify, is composed of value proposition, value creation through value chains and networks, and profit model innovation. Finally, we demonstrates that already successful businesses can also create new values through business model innovation and adaptive advantage, even in a rapidly changing market environment.

"Disruptions, Business Model Innovations and Industry Evolution in China’s Mobile Handset Industry"

Building upon Christensen’s disruptive innovation theory, this paper identifies business model innovations as one critical driving force behind the evolution of China’s mobile handset industry between 1998 and 2010. Adopting the perspectives of demand- side analysis, we find that the business models that caused disruptions to the industry were those focused on the most effective (though not necessarily the most efficient) approach to organizing resources and capabilities to cater to the rapidly changing preferences of customers. This type of business model innovation, based on effectiveness, enabled some entrepreneurial firms – those which, though they possessed fewer technological endowments, were faster in understanding customers’ preferences and more flexible in management – to identify and exploit disparities in the equilibrium of demand and supply of capabilities and resources across industry and geographic boundaries. The paper contributes to disruptive innovation theory by adding an effectiveness-centered approach in business model innovations to novelty-centered and efficiency-centered approaches in industry disruption.

The Three Faces of Business Model Innovation: Challenges for Established Firms

OVERVIEW:Business model innovation represents a significant opportunity for established firms, as demonstrated by the considerable success of Apple's iPod/iTunes franchise. However, it also represents a challenge, as evidenced by Kodak's failed attempt to dominate the digital photography market and Microsoft's difficulty gaining share in the gaming market, despite both companies' huge financial investments. We developed a business model innovation typology to better explain the complex set of factors that distinguishes three types of business model innovations and their associated challenges.