Purpose This paper aims to examine how hybrid business models can help companies to survive in a constantly evolving digital world. The hybridization of business models is a promising approach to innovation. Design/methodology/approach The authors discuss the key elements of a successful business model hybridization along the Business Model Canvas (Osterwalder and Pigneur, 2010). In particular, the elements of value propositions, customer segments, channels and a company’s cost structures demonstrate the individual steps toward a hybridized business model. Using Paddy Power Betfair as an example, the authors showcase how the concept of a hybrid business model can be successfully implemented in practice. Findings By hybridizing its business model, Betfair not only expanded existing customer value propositions but also introduced new ways of co-creating value with customers. Simultaneously, the hybridization positively affects a company’s revenue model, hence evolving in new ways of capturing value. Originality/value To effectively hybridize and thus innovate a company’s business model, the two key factors are successful value creation and value capture. By hybridizing elements of existing business models, new value for customers can be generated. Companies capturing this additional value may achieve sustainable and successful business models and thereby gain a competitive advantage.

Today companies are facing challenges to survive due to substantial transformations induced by digital technologies, ever-changing consumer demands, and environmental uncertainties. Thus, companies need to be innovative to sustain competitive advantages. Scholars and practitioners have recognized the potential of disruptive innovations as a key factor for a company’s competitiveness. Yet, such innovations often challenge established companies due to the tensions between their traditional business model and the newly emerging business model required for disruptive change. The theory of ambidextrous organizations has offered a variety of solutions to tackle these barriers referring to the alignment of exploration and exploitation within an organization’s structure. Current literature, however, faces inconsistencies regarding how this can be achieved. With this study, we therefore aim to provide a comprehensive understanding of how ambidextrous structures enable incumbent companies to reduce the barriers to disruptive business models. On the basis of a systematic literature review, we analyze and compare potential structures and their characteristics proposed in the ambidexterity literature. Drawing on our review, we conceptualize a framework linking the different organizational structures to the barriers associated with disruptive business models. Our framework identifies a range of seven structures which can resolve the barriers and thus support managers in their structural decisions on how to align exploration and exploitation to pave the way for disruptive business models.

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