Business model dynamics and innovation: (re)establishing the missing linkages

Abstract

Purpose-This paper aims to discuss the need to dynamize the existing conceptualization of business model, and proposes a new typology to distinguish different types of business model change. Design/methodology/approach-The paper integrates basic insights of innovation, business process and routine research into the concept of business model. The main focus of the paper is on strategic and terminological issues. Findings-The paper offers a new, process-based conceptualization of business model, which recognizes and integrates the role of individual agency. Based on this, it distinguishes and specifies four different types of business model change: business model creation, extension, revision, and termination. Each type of business model change is associated with specific challenges. Practical implications-The proposed typology can serve as a basis for developing a management tool to evaluate the impact of specific changes to a firm's business model. Such a tool would be particularly useful in identifying path dependencies and resistance at the process level, and would therefore allow a firm's management to take focused action on this in advance. Originality/value-The paper makes two main contributions: first, it offers a new, process-based conceptualization of business models; second, it is the first paper to establish a direct link between business model change and the degree of innovation (such as "incremental" vs "radical"), and which distinguishes and specifies different types of business model change.

Learning while (re-)configuring: Business model innovation processes in established firms

“…A new BM might have synergy with the existing model, when the old and the new models share some components, such as technological resources (Kim and Min, 2015;Markides and Charitou, 2004;Sabatier et al, 2010). The existing configuration may also create cognitive inertia because existing BMs shape managerial thinking and distort perceptions of novel opportunities (Cavalcante et al, 2011;Tripsas and Gavetti, 2000). Existing configurations also create structural barriers when new uses of components conflict with the relations of those components embedded in the existing configuration (Chesbrough, 2010).…”

Business Model Research: From Concepts to Theories

“…A further round of conceptual (Baden-Fuller & Haefliger, 2013;Cavalcante, Kesting, & Ulhøi, 2011;DaSilva & Trkman, 2014;Morris, 2013), deductive (Bock & George, 2011;Bock, Opsahl, George, & Gann, 2012;Visnjic Kastalli & Van Looy, 2013;Wei, Yang, Sun, & Gu, 2014) and inductive research (Aspara, Lamberg, Laukia, & Tikkanen, 2011;Cavalcante, 2014;Hacklin & Wallnöfer, 2012;Taran, Boer, & Lindgren, 2015;Velu & Stiles, 2013) followed. Literature reviews (Lambert & Davidson, 2013;Zott et al, 2011) that frame the state of the art in business model research and identify related research agendas (Arend, 2013;Baden-Fuller & Mangematin, 2013;Eckhardt, 2013;Zott & Amit, 2013) have emerged to provide an account of existing research and to guide future research.…”

Online Media Business Models: Lessons from the Video Game Sector

“…Some recent attempts in research to discover these links have been made (Achtenhagen, Melin, and Naldi, 2013;Cavalcante, Kesting, and Ulhøi, 2011;Roome and Louche, 2015). Cavalcante, Kesting, and Ulhøi (2011) distinguish four types of business model change: (1) business model creation, (2) business model extension, (3) business model revision, and (4) business model termination.…”