Changes in the business environment accelerated dramatically over the last decades, due to technological innovation, regulation, market changes and competitor behavior, and has led to changes in the way firms do business. So business model innovation (BMI) plays a critical role in the success of today’s firms. Companies realize that it is not an easy task to innovate a BM and many attempts fail to deliver expected outcomes. In this study, we conduct a systematic literature review to find the barriers to capture value from BMI. Based on in-depth analysis of 21 articles, we found 75 barriers to BMI that can be categorized as Strategy-related, BM design issues, BM Implementation and BM management issues. This paper offers the grounding for empirical research as well contribute to the development of tools to overcome BMI management problems, as well provide guidelines and best practices of how to implement BM Innovations.
Business model (BM) innovation is vital for today’s businesses. However, BM innovations can be irreversible, and therefore, in comparison to product, service or process innovation, entail bigger risk and ambiguity. Understanding the way in which BM innovation exerts influences over firm’s performance would help business-owners to be more effective. Based on a systematic literature review, a model to examine how BMI impacts firm performance through mediating and moderating factors was developed. Based on in-depth analysis of 37 articles, we identified twenty moderating factors classified in four groups, i.e., Firm-Characteristics, Industry-Characteristics, BM Implementation, and BM Practices, and ten mediating factors, categorized in three sub-groups, i.e., Revenue Growth, Efficiency Growth, and Enhancing the Organizational Capabilities. This paper offers the grounding for empirical research as well contribute to the development of tools to assess the effectiveness of the BMI.
The automotive industry is experiencing a phase of rapid innovation, with emergent technologies underpinning the realisation of self-driving cars, increased use of data and data analytics, sensors to enable car components to connect to the Internet-of-Things and the use of alternative energy sources, such as electric vehicles. Such innovations enable novel services, which in turn require actors within the automotive industry to change their business models. In this paper, we aim to identify novel automotive services that impact business models within the automotive industry. We use Q-methodology to explore and analyse the opinions of researchers and experts from the automotive industry. We find that four groups of services are expected to impact the business models in the automotive industry most: (1) personalised services, (2) generic mobility services; (3) shared mobility, and (4) connected cars. These are services at the level of the end-user, while more fundamental technology-based innovations, such as electrical driving, autonomous driving and Internet-of-Things applications, are scattered over different groups of end-user services. From these results, current business models can be analysed, and possible roadmaps for business model innovation can be developed.
Purpose By drawing on various theoretical approaches and a gender perspective, this paper aims to examine business model (BM) experimentation as a step towards BM experimentation capabilities as an outcome and, as such, a key antecedent to firm performance. Design/methodology/approach In this paper, using a unique data set of 444 European small and medium-sized enterprises (SMEs), the authors draw on various theoretical perspectives to devise a structural equation model that examines BM experimentation as a step towards business model innovation (BMI) as an outcome and, as such, a key antecedent to firm performance. Potential differences are examined between female-owned and non-female-owned businesses with regard to hypothesized relations. Findings Multi-group analysis results reveal that drivers of BM experimentation and the paths linking BM experimentation to overall firm performance are different for female owners in comparison to male owners. Research limitations/implications Theoretical and practical implications are various. For SME entrepreneurs, experimenting with their BMs does lead to improved performance. Practical implications Theoretical and practical implications are various. For SME entrepreneurs, experimenting with their BMs does lead to improved performance. Originality/value Despite the increasing number of papers focussing on the relationship between BM and firm performance, the focus on female entrepreneurship, gender differences and BMI, more specifically the process of BMI as BM experimentation, is relatively rare.
Entrepreneurial competencies are connected to venture performance, but the link between these competencies and the business model (BM) innovation is scarcely studied. This article is among the first to study entrepreneurial competencies as a driving force for BM innovation. This paper presents a qualitative empirical study of six innovative horticulture entrepreneurs in Finland. We contribute to two separate literature streams, competence and BM literature, by combining competence categories (Mitchelmore and Rowley 2010) and BM Innovation model (Foss and Saebi 2017) in the analysis of innovative entrepreneurs. This paper provides evidence on entrepreneurial competencies being internal drivers for BM innovation, and also identifies the core entrepreneurial competences related to BM innovation. Open Access: https://journal.fi/afs/article/view/79500
This study investigates if BMI helps business innovation to succeed. We analyzed 27 SME cases having differing combinations of Business Model Innovation (BMI), New Product Development (NPD) and effectuation methods. We also analyzed the drivers and market strategy of the SMEs. We found out that typical SME innovation success cases combine at least two methods of implementation, such as BMI and NPD, and focus on low-end market. Effectuation in combination with the aforementioned seems to play significant role as well.
Metsäalalla eletään suuren muutoksen aikaa. Olet varmasti huomannut kuinka digitalisaatio, teollinen internet, mobiilisovellukset ja autonomisuus ja muut trendisanat vilisevät puheissa - myös metsäalalla. Teknologia kehittyy nopeammin kuin koskaan ja muuttaa jokaista liiketoiminnan osa-aluetta. Samaan aikaan ympäristövaatimukset, metsäpolitiikka ja asiakkaiden tarpeet muuttavat yritysten toimintaympäristöä. Yritysten on ryhdyttävä miettimään uusia arvonluomistapoja säilyäkseen mukana kilpailussa. Myös metsäyrittäjät ovat tilanteessa, jossa heidän on pakko tarkastella omaa osaamistaan ja liiketoimintaansa. Uudesta muuttuvasta toimintaympäristöstä voidaan rakentaa kilpailuetua, mutta jos muutokseen ei reagoida, siitä tulee enemminkin kilpailukykyä rajoittava tekijä. Tämä kirja on syntynyt Hämeen ammattikorkeakoulun ja Turun kauppakorkeakoulun Uudistuva metsäyrittäjä -hankkeessa. Hanke käynnistyi kesällä 2016 ja se jatkui vuoden 2019 alkuun. Samoihin aikoihin tutkimme ja olimme mukana kehittämässä uusia pk-yritysten bisnesmalleja Euroopan Unionin rahoittamassa Envisionhankkeessa. Hyödynsimme sieltä saatuja oppeja ja tuotoksia metsäalalle sovitettuna. Uudistuva metsäyrittäjä -hanketta toteutettiin työpajamuotoisesti eri paikkakunnilla. Työpajoissa pohdittiin uudenlaisia liiketoimintamahdollisuuksia yhdessä metsäyrittäjien kanssa. Muutoksen keskiössä ovat bisnesmallit, joilla on mahdollisuus luoda uudenlaisia liiketoimintamahdollisuuksia metsäyrittäjille. http://urn.fi/URN:ISBN:978-952-249-555-6
The flexibility offered by the combination of platform and enabling ecosystems allows multiple competing and collaborating organizations from different industries to achieve rapid innovations. This article highlights key technical and business model attributes of the platform and how these can be exploited by the platform leader for achieving improved performance with limited coordination overhead. Research shows that only a few platforms are managed effectively; as it involves balancing conflicting demands related to the platform owner’s interest and overall health of the ecosystems. We discuss the key governance challenges for a sustainable platform leadership strategy that leads to benefits for the platform leader as well as for the ecosystem partners. Research shows that an effective platform governance i.e. decision rights and accountability to encourage desirable behavior in the use of the platform, addresses the above challenges effectively. This article goes on to identify different types of control mechanisms used in the context of platform ecosystem. While doing so, we highlight the important contextual differences related to the application of control mechanism in platform-centric ecosystems. Unlike other inter-organizational partnership (i.e. outsourced software development); ecosystem leaders do not have formal authority over a large number of application developers and other partners (Mukhopadhyay et al., 2016a). We conclude by proposing several complementary research questions for better understanding of the control–governance dimensions of platform ecosystem business models.
Advances in Information Technology provide opportunities for totally new business. However, we are facing not only growing number of new ventures, but increasing restructuring of existing businesses. This can be perceived e.g. in shortening life-cycles of the companies. The restructuration and birth of new companies means changing or even disrupting existing businesses. Therefore, companies, regardless of their maturity, should be prepared to evaluate these threats and opportunities actively. Against this backdrop, we suggest to combine business modelling with systematic Business Continuity Management. We discuss the two approaches and their usefulness under different circumstances and illustrate their use when implementable, rapid reaction to changes is required, such as in industry restrucutration, or business merging and reorganization. We coin this combination as Strategic Business Continuity Management.
In this paper we analyse Business Model Innovation (BMI) in European micro, small and medium sized enterprises (SME). We present descriptive findings from our quantitative survey and qualitative case survey on how SMEs are innovating their Business Models. Our survey indicates that 37% of European SMEs innovate their Business Model. We found some differences in BMI depending on the age and industry sectors. We also describe the changes the SMEs make in differing Business Model components when they are improving their Business Model.
Purpose: This paper explores how digital technologies have forced small-to-medium-sized enterprises (SMEs) to reconsider and experiment with their business models (BMs) and how this contributes to their innovativeness and performance. Design/methodology/approach: An empirical study was conducted on 338 European small-to medium-sized enterprises (SMEs) actively using social media and big data to innovate their business models. Four in-depth case studies of companies involved in business model innovation were also carried out. Findings: Findings show that the use of social media and big data in business model innovation is mainly driven by strategic and innovation-related internal motives. External technology turbulence plays a role too. Business model innovation driven by social media and big data has a positive impact on business performance. Analysis of the case studies shows that business model innovation is driven by big data rather than by social media. Research limitations/implications: Research into big-data- and social-media-driven business models needs more insight into how components are affected and how SMEs are experimenting with adjusting their business models, specifically in terms of human and organizational factors. Practical implications: Findings of this study can be used by managers and top-level executives to better understand how firms experiment with business model innovation, what affects business model components, and how implementation might affect business model innovation performance. Originality/value: This paper is one of the first research contributions to analyse the impact of digitalisation, specifically the impact of social media and big data on a large number of European SMEs.
Existing literature on control in software development considers only the principal-agency relationship between controller and controlee and this view does not hold true between ecosystems leader and partners, which are independent organizations. This chapter aims to study the critical role played by inter-organizational control mechanisms in the context of mobile platform ecosystems. By utilizing opinions of 38 experts and employing an Analytic Hierarchy Process (AHP) approach, this chapter identifies and ranks the most important roles played by control mechanisms in digital platform. The findings show that ecosystems´ leaders primarily use control to manage or improve its central position in the network to capture a higher share of value of the service. The findings provide further insights on two other roles of control in platform ecosystems: (i) accessing complementary resources and (ii) managing interdependency between partners. This chapter contributes to organizational control theory in the context of emerging platform-based ecosystem.
In many entrepreneurial projects, the concept of the business model (BM) is used to describe a business idea at a high-level and in a holistic way. However, existing literature pays less attention to implementation (or execution) of BM. Implementation becomes more complex when a BM is proposed by or requires a network of collaborating enterprises. The aim of this paper is to provide an approach based on empirical research that supports BM transition from design to implementation. The empirical data used in this paper is based on a case study involving an innovative project in the pharmaceutical sector in Finland. The case analysis demonstrates how a high-level BM needs careful consideration of its operational components from a network perspective to secure both value creation and capture. Drawing on the analysis, six concluding propositions on BM implementation in networked settings are put forward.
WINNER OF EMERALD LITERATI AWARD 2019 for OUTSTANDING PAPER Purpose – The purpose of this paper is to analyse how different strategic goals of (micro-, small- and medium-sized firms¼SMEs) relate to the business model innovation (BMI) paths that SMEs take when improving their business. Design/methodology/approach – The authors conducted 11 in-depth case studies involving SMEs innovating their business models (BMs). Findings – The authors found evidence that strategic goals of SMEs (start new business, growth and profitability) lead them to alternative innovation path in terms of BM components affected. Growth seekers start from the right-hand side of a BM Canvas, while profitability seekers start from the back end, the left side of a Canvas; and new businesses adopt a cyclical approach considering BM components in turn, while at the same time redesigning and testing the BM. The findings of this study also indicate that all three paths gradually lead to improvement in several BM components. Research limitations/implications – Findings indicate that a strategic management view in which strategic goals define BMI also applies to SMEs. The distinctive BMI paths that the authors identified provide evidence to suggest that, although the SMEs may not have an explicitly formulated strategy, their strategic goals determine the type of improvements they make to their BM. All three SME groups started their improvements from different BM components and changed several elements in their BMs in a specific order, forming distinctive BMI paths. Finally, to understand the BMI in SMEs better, more research is needed into BMI processes and into the way BMI is managed in SMEs. Practical implications – The findings of this study help SMEs to anticipate the next steps in their path towards an improved BM. By mirroring their approach to the BMI paths, they can better manage their BM makeover process and focus on their innovation activities. For providers of BMI tools and methods, the study indicates which SME innovation tasks could be supported by tools and how the tools should be aligned with the BMI paths. Originality/value – BMI is attracting growing attention in both research and practice. However, knowledge concerning BMI in SMEs is limited. The authors contributed to BMI research by focussing on the BMI paths of SMEs, i.e. the often sequential, non-linear and iterative steps taken to improve the business by making changes to specific BM components.
In this entry we discuss the role of business models in the mobile telecommunications domain, considering technology trends at the level of hardware, infrastructure (4G and LTE as first release), platforms (operating systems, network based platforms, and service aggregator platforms) and presentation protocols (HTML 5), and how they affect end-user services or applications. With regard to business models, we adopt a service or application centered approach, based on platform concepts, discussing several business model frameworks and their relevance to mobile applications, specifically for networked enterprises (or micro-ecosystems). Future trends are also discussed from a convergence perspective with a particular emphasis on ubiquitous computing and smart living concepts.
Digital technology has forced entrepreneurs to reconsider their business models (BMs). Although research on entrepreneurial intention and business models is gaining attention, there is still a large knowledge gap on both fields. In this paper, we specifically address the impact of digitalization on business model innovation (BMI). Based on data collected from 338 European small- to medium-sized enterprises (SMEs) actively using IT artefacts, social media, or big data to innovate their business model, we study antecedents of BM experimentation and BM innovation practices, as well as overall business performance. We carried out four in-depth case studies of companies in which BM innovation is related to IT artefacts and more specifically to social media and big data. The findings from the quantitative study show that BMI is related to IT artefacts, social media, and big data. Use of IT artefacts, social media, and big data is mainly driven by strategic and innovation-related internal motives, although external technology turbulence plays a role too. BM innovation driven by IT artefacts, social media, and big data has an impact on performance. Although the case studies show that this is more evident for IT artefacts and big data than for social media.
Digitalization increases the need for innovation of the business models to a new high, also in micro, small and medium sized businesses (SMEs). Every third SME is engaged in Business Model Innovation (BMI) activities, but few of them in a systematic manner. Earlier empirical and theoretical research suggest that BMI is, and should be, an iterative process of adjustments in pursuit for better performance and success with New Product Development (NPD). NPD and BMI research streams use causal constructs with focus on external technology driven or market driven internal resource optimization. Studies on effectuation and bricolage, in turn, indicate that entrepreneurs’ passion, curiosity, and originality can compensate limited resources for innovation in SMEs. Building on these approaches, we propose a framework to analyze innovation in SMEs with case studies. The empirical data was collected in in Horizon2020 funded Envision project, where we use multiple case study approach. For this study, we select failed, surviving, and successful BMI cases to recommend effective BMI for SMEs and line out directions for future research. Keywords: • Business Model Innovation • New Product Development • Effectuation • Bricolage • SME • Market strategy • Performance •
Purpose -This article analyses Business Model Innovation (BMI) in small and medium sized enterprises (SMEs) in an order to recognise drivers and resulting changes when the companies are innovating their Business Models (BMs). We present both insights from individual cases and some general patterns as well as provide management guidelines. Methodology -The authors conducted a case survey on BMI in 28 SMEs from several European countries. Findings -BM Innovation requires changes to many elements of the BM, almost always to the service or product offering as well as to the business network. Also the target market and the technology utilised are most often altered. Use of BM tools to design and analyse these changes was found to lead to better understanding of BMs and helped to spot blank spots or loopholes in the BMs. Implications -Our research shows that BMI looks easy but that implementation of ideas are complex and needs careful management attention. Instead of trying to delimit the changes to only some element of the BM, managers should consider the whole BM, and especially focus on the offering and collaboration with business partners. SMEs would benefit from easy to use platforms and tooling that make it possible to test the viability and sustainability of their BMs and support them with implementation of changes. Originality/value -This paper is one of the few surveys in the BMI field that focus on SMEs. It illustrates what drives SME to innovate their BMs and what is the scope of the changes required. Keywords: Business Model Innovation, Case survey, SME, Business Model, Business Model tool, BM driver
Business Models and Business Model Innovation are increasingly gaining attention in practice as well as in academic literature. However, the robustness of Business Models (BM) is seldom tested vis-à-vis the fast and unpredictable changes in digital technologies, regulation and markets. The evaluation of the robustness of a BM raises several issues, such as how to describe the business model in a structured way, how to determine a relevant set of changes to test against, how to assess their impact on business model components, and how to use the results of the assessment to strengthen the business model. In this paper, we propose business model stress testing as a practical approach to evaluate the robustness of business model components. The method builds upon concepts from business model innovation and scenario planning. We illustrate our approach using a case example. Our approach enables testing individual business model components as well as the interrelation between components. The approach visualizes challenges and suggests ways to increase the robustness of BM. The stress testing approach is particularly useful in a stage of business model experimentation, i.e. if a company has to choose between alternative business models or still has to implement the business model. The underlying software tool is openly available for reuse and further development. The paper contributes to futures research literature by delivering the first method that allows to test the robustness of business models against future uncertainties.
Heikkilä, Marikka and Heikkilä, Jukka (2010). Conscription of Network Business Models. The IUP Journal of Business Strategy, Vol. VII, No. 4, pp. 7-23, December 2010. As enterprises focus increasingly on core competencies, the importance of collaboration and knowledge sharing between organizations is greatly enhanced. This paper examines the development of knowledge sharing during the initial exploratory stages of an emerging business network. It demonstrates how the business model can serve as a tool for spanning organizational boundaries. Through developing a business model, network enterprises can learn to understand each other, create common concepts within their business network and evaluate the feasibility of the endeavor.
This paper presents a process framework for innovating joint business models (co-BM) for multiple companies. Our framework describes the change management that should be carried out in parallel to the rigorous analysis and development of the business model details. With two illustrative cases we show that fruitful co-BM creation process in networks requires both development of the model itself, but also organizational innovation processes including mutual learning and harmonisation of operations. We claim that by understanding this dual process and its key facets might help (1) to coordinate the practical BM creation projects better and (2) to analyse which BM related decisions contribute or hinder the joint development project.
In recent years, we have seen increasing interest in new service concepts that take advantage of the capabilities of business ecosystems instead of single companies. In this article, we describe how a business ecosystem begins to develop around a service business idea proposed by an entrepreneur. We aim to recognize the different domains of players that are or should be involved in the ecosystem while it is under construction. The article concludes with an ecosystem model consisting of six sub-ecosystems having different change drivers and clockspeeds.
This paper focuses on the topics of learning and coordination within emerging business networks. It discusses the triple role of Business Model co-creation process within business networks: first the process helps the business network to learn and create trust between the partners, second it helps the partners to estimate the feasibility and fairness of the cooperation, and third, it helps the business network to agree on the use of differing coordination mechanisms. This paper contributes to the existing literature on business model co-creation and coordination in networked settings.
AbstractFirms managed by women present some differences in organizational conditions in terms of type of business and manager profile. The aim of this study is to check if those differences persist in family firms where the presence of female managers is higher, especially in second or subsequent generation family firms, than in non-family firms. The results reveal that family firms run by women are not smaller, but are concentrated in the services sector like non-family firms. Regarding the manager profile there are no differences either in the level of training or the age of female managers. They possess, however, less management experience but only in first generation family firms. In sum, gender differences in the type of business and in the manager profile found in the management literature disappear in family firms, only a sectoral gender effect persists.
This study analyzes the adoption of organizational innovations focusing on their drivers or objectives pursued. Complementarities of objectives and organizational innovations are considered together with a sectoral approach to evaluate differences between manufacturing and service industries. Based on the Community Innovation Survey (CIS), a canonical analysis is performed to allow the study of interrelationships among sets of multiple dependent variables (organizational innovations) and multiple predictor variables (objectives). Improving innovations skills is the most relevant objective in adopting any organizational innovation. Two objectives are closely related to innovations in workplace organization, namely reducing response time and cost (efficiency drivers). New business processes and external relations are more affected by desires to improve innovation skills and quality (intangible drivers). The results reveal similar behavior in manufacturing and service industries supporting the synthesis approach. Logit regressions confirm these findings.
Business Model (BM) Innovations aim at making systemic changes in the business logic of companies when they are bringing innovative products and services to the market. Companies should be sensitive to changes in their business environment and able to modify their BMs in an agile way. To assess the agility of BMI during specific market entry situations, this paper uses a method that stress tests the value proposition and the components of a BM against contingent uncertainties. We present three qualitative case studies of companies that differ in their market entry approach. Starting from their strategic orientation, these case companies’ stress test their Business models and BM components, using a scenario-based identification of uncertainties. The BM Stress Test method contributes to a quick understanding of the components their BM needs to monitor, reconsider, or improve. Such stress testing helps enhance business agility. The research contributes to market strategy and business modelling research by introducing BM Stress Testing as a new method that can achieve and maintain agility regarding BM uncertainties.
This article develops and showcases the viability radar, which is designed to assess the innovation potential of transformative service ideas. Based on service research and innovation literature, we highlight the importance of novel simplifying technology, supporting value networks, cost-effective business models, and regulatory environments that enable the renewal of prevailing market practices. We operationalize the radar with a set of questions and assess the innovation potential of three pilot cases of new transformative healthcare services. http://timreview.ca/article/895
Development of successful business models has become a necessity in turbulent business environments , but compared to research on business modeling tools , attention to the role of metrics in designing business models in literature is limited. Building on existing approaches to business models and performance measurement literature , we develop a generic open repository of metrics related to core business model concepts. We validate and assess the practical value of the repository based on four e-‐Business model cases. The repository can be utilized in designing business models , specifically for networked enterprises. It is neither complete nor universally applicable , but needs adjustment with each design. Ultimately , with this paper , we hope measurement will become an integral part of the business model innovation discussion .
This paper focuses on the challenges in managing innovation within supply networks. We present an empirical study on innovation collaboration between a focal company and its supply network of small and medium sized enterprises. By analysing the case from the viewpoints of the focal company, the suppliers and investors we point out three controversial issues in innovation management within the supply network: intellectual property rights, partnering versus competition, and commitment versus independency. Furthermore, we analyse the suppliers' positions with a purchasing portfolio model and present implications for innovation management practices in supply chains.
There is a multitude of tools available for Business Model Innovation (BMI). However, Business models (BM) and supporting tools are not yet widely known by micro, small and medium sized companies (SMEs). In this paper, we build on analysis of 61 cases to present typical BMI paths of European SMEs. Firstly, we constructed two paths for established companies that we named as 'I want to grow' and 'I want to make my business profitable'. We also found one path for start-ups: 'I want to start a new business'. Secondly, we suggest appropriate BM toolsets for the three paths. The identified paths and related tools contribute to BMI research and practise with an aim to boost BMI in SMEs.