Takin' Care of Business Models: The Impact of Business Model Evaluation on Front‐End Success

Abstract

In recent years, the discussion about business models has garnered increasing attention in practice and research. It is argued that thinking about business model alternatives supports managers, entrepreneurs, or R&D groups in, for instance, developing technological ideas into successful new businesses. Due to a business model's holistic perspective on ideas, it aims to understand not only what kind of value can be created for customers with a certain project but also how this value can be captured and what the corresponding value architecture looks like. Although existing research argues that technological development and business model development should go hand in hand, a quantitative examination of the actual benefits of business model evaluation in the technology‐driven front end of innovation has yet to be performed. This study relates business model evaluation to dimensions of front‐end success and examines environmental turbulence as a moderating variable. Hypotheses are tested by applying structural equation modeling on a set of 151 R&D groups. Results indicate that the extent of business model evaluation in R&D groups' early innovation phases positively relates to front‐end effectiveness and efficiency. Further findings reveal that environmental turbulence increases the strength of these relationships, indicating the stronger relevance of business model evaluation in more turbulent environments.

How Does Online Interaction Affect Idea Quality? The Effect of Feedback in Firm‐Internal Idea Competitions

“…In creativity studies, the quality of an idea is typically evaluated by criteria such as novelty, relevance, feasibility, and specificity (Blohm et al, ; Dean, Hender, Rodgers, and Santanen, ). In new product development, idea generation is part of the front end of innovation (Brentani and Reid, ; Schrauder, Kock, Baccarella, and Voigt, ). In this context, ideas are evaluated according to business criteria, with the most important parameters of idea quality being market attractiveness, technical feasibility, and strategic fit for the company (Cooper and De Brentani, ; Kijkuit and Van Den Ende, ; Rochford, ).…”

University‐industry collaboration and front‐end success: the moderating effects of innovativeness and parallel cross‐firm collaboration

“…Front‐end success describes the R&D group’s ability to evaluate ideas concerning their potential to create competitive advantage, to select ideas depending on their market potential, and to create sustainable R&D competencies. We used existing items from the literature with slightly adapted wordings (Bertels et al, ; Kock et al, ; Schrauder et al, ).…”

Defining business model key performance indicators using intentional linguistic summaries

“…To support decision making in business model innovation, practices of experimentation and trial-and-error learning are frequently stressed [ 5 , 60 ]. In addition, business model evaluation is advocated as a means to structure decision making and to clarify the performance of business models [ 57 ].…”

“…The innovation of business models, however, is considered to be a complex task or process [ 8 ], generally characterized by significant uncertainty with regard to business model decision making and its expected outcomes, particularly in the early phases of business model innovation [ 44 ]. To reduce such complexity and uncertainty, organizations can, in addition to practices of trial-and-error learning [ 60 ], strongly benefit from tooling and techniques directed at the evaluation of business models and structuring decision making [ 57 , 68 ]. In response, research has paid ample attention to developing both qualitative [ 19 – 21 , 43 ] and quantitative [ 7 , 22 ] tools and techniques for the evaluation of business models, generating insights on the expected performance of business models, which in turn may support decision making.…”