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Value Propositions for Disruptive Technologies: Reconfiguration Tactics in the Case of Electric Vehicles

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Disruptive technologies tend to underperform on attributes that are considered as key attributes of incumbent technologies and require new value propositions to increase mainstream customer appeal. Yet, how do firms reconfigure their value proposition as a way to overcome the technological inferiority of disruptive technologies? This paper conceptualizes and empirically investigates the process of value proposition reconfiguration. Based on evidence on the commercialization of electric vehicles, it explores the tactics firms use to reconfigure value propositions to increase market acceptance from mainstream customers. The paper develops a framework showing three reconfiguration tactics: compensating, enhancing, and coupling tactics.
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... Accordingly, to manoeuvre a business model along the disruptive path (i.e. increasingly attract mainstream customers), companies are particularly asked to innovate their value proposition continuously as part of their overall business model innovation activities (Bohnsack & Pinkse, 2017;Govindarajan & Kopalle, 2006a). ...
... Hence, studies build on the argued relevance of value proposition in impacting the overarching business model (Lindič & Marques da Silva, 2011) and that of VPI in inducing disruptive dynamics (Bohnsack & Pinkse, 2017). ...
... In sum, the research argues in favour of the relevance of VPI as a micro-level of business model innovation that propels DI. Hence, we build on recent in-depth case study research, which presents this argument (Bohnsack & Pinkse, 2017;Cozzolino et al., 2018;Snihur et al., 2018;Wu et al., 2010), and refer to recent conceptual statements (Bashir & Verma, 2019;Christensen et al., 2018) when hypothesizing: ...
... After all, electric cars are complex pieces of technology, and signaling their attributes to consumers can be met with resistance if not carried out properly (Mukherjee and Hoyer, 2001). Sellers of electric vehicles have been attempting to create environmental value for their target market (Bohnsack and Pinkse, 2017), but consumers do not always appreciate or understand it. ...
... Sellers of hybrid vehicles might rely on other tactics to increase customer satisfaction such as attempting to increase acceptance of their products from existing mainstream customers and integrating this into their value propositions (Bohnsack and Pinkse, 2017). Nevertheless, the result is that they also rely on delivering strong value propositions, and we hypothesize that: ...
... In contrast to electric vehicles, the technology for hybrid vehicles is relatively incremental and our results suggest that value propositions are important for driving customer satisfaction with these technologies. The focus for these types of firms should be on value propositions and be framed to illustrate how the product's benefits outweigh the perceived psychological costs (Bohnsack and Pinkse, 2017). Many sellers of hybrid vehicles use conventional franchised dealership networks rather than the advanced ones used by the leading electric vehicle manufacturers, and their buyers have different priorities since hybrid cars are usually cheaper and customers often buy them as their main transport method (Sandström, 2015;Ashique et al., 2017;Korosec, 2017;Matthews et al., 2017). ...
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According to disruptive innovation theory, customers are swayed by new market entrants through low-end encroachment strategies and/or new market disruption, but these predictions do not account for the rising interest in product categories such as electric vehicles in emerging markets. To bridge this research gap, we draw comparisons between disruptive and incremental innovation to account for electric and hybrid vehicles, respectively. We explore the misalignment between technological growth and customer satisfaction by comparing the electric vehicle business model with the hybrid vehicle business model based on three parameters: channels, value propositions, and customer relationships. Primary empirical data are collected from 307 survey participants. Structural equation modeling is then employed to investigate the similarities and differences between electric vehicles based on their disruptive innovation and hybrid vehicles based on their incremental innovation. We find that electric vehicles’ unique focus on channels leads to a positive influence on their business model and customer satisfaction, while focusing on value propositions leads to positive results for hybrid vehicles. Finally, we discuss the significance of the results considering electric vehicles’ high-end encroachment strategy within the luxury segment and contrast it with the relatively low-end encroachment strategy adopted by sellers of hybrid vehicles.
... Another opportunity considered in the literature relates to the introduction of disruptive technologies from advanced economies into emerging economies through a second BMI by latecomer firms (Wu et al., 2010). Firms can also use different tactics (compensating, enhancing, and coupling) to reconfigure their value propositions (Bohnsack and Pinkse, 2017). Table 2 summarizes the challenges and opportunities of disruptive technologies, according to some of the contributions analyzed. ...
... Third, we notice a tendency of some industries, such as financial services, hospitality and automotive services, and healthcare to employ disruptive technologies in their BMs, in order to find solutions for sustainability issues and a sharing economy approach. For instance, the automotive industry is adopting sustainable mobility (Bohnsack and Pinkse, 2017), creating new sources of value by offering a superior product or service (e.g., car-sharing services and mobile applications), or by coupling their products with other services (Bohnsack and Pinkse, 2017). Similarly, embedding the sharing economy approach in the financial services industry is bringing new innovations for processes and services (Gomber et al., 2018), leading to digital banking services, products, and functionality which enhance customer experience (Gomber et al., 2018). ...
... Third, we notice a tendency of some industries, such as financial services, hospitality and automotive services, and healthcare to employ disruptive technologies in their BMs, in order to find solutions for sustainability issues and a sharing economy approach. For instance, the automotive industry is adopting sustainable mobility (Bohnsack and Pinkse, 2017), creating new sources of value by offering a superior product or service (e.g., car-sharing services and mobile applications), or by coupling their products with other services (Bohnsack and Pinkse, 2017). Similarly, embedding the sharing economy approach in the financial services industry is bringing new innovations for processes and services (Gomber et al., 2018), leading to digital banking services, products, and functionality which enhance customer experience (Gomber et al., 2018). ...
Article
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This paper has a twofold aim: to analyze the development of the digital transformation field, and to understand the impact of digital technologies on business model innovation (BMI) through a structured review of the literature. The results of this research reveal that the field of digital transformation is still developing, with growing interest from researchers since 2014. Results show a need for research in developing countries and for more collaboration between researchers and practitioners. The review highlights that the field is fragmented among disruptive technologies, shared platforms and ecosystems, and new enabling technologies. We conclude that digital transformation has impacted value creation, delivery, and capture in almost every industry. These impacts have led to the employment of a variety of new business models, such as those for frugal innovation and the circular economy.
... The ongoing transition to EVs makes for a useful case because EVs are a radical innovation 1 (Afuah and Bahram, 1995;Dyerson and Pilkington, 2005) that requires comprehensive changes along the automotive value chain, in complementary goods and services, as well as infrastructure and payment services (Bohnsack et al., 2014). We focus on the Netherlands as there are a lot of actors active in EV-related BMI (Bohnsack and Pinkse, 2017;RVO, 2017) and because, although the country is generally one of the pioneers in EV adoption (IEA, 2018), actors pushing EV-related BMI still meet challenges when bringing such solutions to the market in an ongoing transition. ...
... The innovation of a business model, BMI, can then refer to small adaptations or radical changes such as shifting from buying a product to paying for its usage (e.g. car ownership vs. car sharing) (cf. Bohnsack and Pinkse, 2017). Similarly, literature uses the term to refer to changes in an existing firm's business model as well as to the creation of entirely new models of value creation and value capture by new ventures (e.g. ...
... The Dutch EV niche is amongst the most developed worldwide, in terms of diffusion (IEA, 2018), policy support (Wesseling, 2016), and charging infrastructure density (IEA, 2018;McCarthy, 2018). It is also a market in which many entrepreneurial ventures are actively pushing EV-related BMI (Bohnsack and Pinkse, 2017). However, although EVs are taking-off in this sense, we cannot yet speak of a full transition to electric mobility. ...
Article
Whereas research acknowledges the potential of business model innovation (BMI) to destabilize an existing regime, the impact of a socio-technical system in transition on BMI remains under-conceptualized. To advance work in this direction, this study expands the concept of a business model design space (BMDS), which describes the opportunities and constraints to design novel ways of creating and capturing value from niche technologies available at a given point in time in a transition. Illustrated with the case of electric vehicles in the Netherlands, we show how BMI are affected by and, in turn, affect this design space. We find that the policy and the science and technology dimensions of the socio-technical system form hard boundaries to the BMDS that niche actors cannot directly overcome via BMI. Yet, BMI can push the softer industry, market, and cultural boundaries of the BMDS by supporting niche expansion via coupling novel technologies to business models that (i) conform to the current regime, or that (ii) attempt to transform the regime. This paper offers an analytical framework that connects firm-and system-level to support the exploration of questions like how much novelty niche actors can introduce into a ST-system at specific points in a transition.
... Previous research has identified several business model archetypes which overcome technological and institutional barriers (see, for instance, Bohnsack, Pinkse, & Kolk, 2014;Sauter & Watson, 2007). The article by Bohnsack and Pinkse (2017) is one of the few studies that goes beyond proposing archetypes to explore in detail how these business models are configured. They identified three tactics that firms can use to reconfigure their value proposition for disruptive technologies and increase the market attractiveness of technologies that are immature and costlier than incumbent ones. ...
... This suggests that costs and technological maturity alone may be insufficient to explain sustainable technologies' lack of market success. In this article, we argue that the tactics identified by Bohnsack and Pinkse (2017) may not be sufficient to support the development of compelling value propositions for sustainable technologies. ...
... While the existing literature proposes generic business model archetypes, few papers deconstruct these business models to explain how exactly they are configured (Charter, Gray, Clark, & Woolman, 2008;Schaltegger, Lüdeke-Freund, & Hansen, 2012;Tukker & Tischner, 2006;Wells, 2008). One exception is Bohnsack and Pinkse (2017), who offer a detailed analysis of how firms that commercialize a disruptive, costly, and immature technology can create value for their customers. More specifically, they study how car manufacturers reconfigure their value propositions to increase the market attractiveness of EVs. ...
Article
Despite their promise for tackling environmental problems, sustainable technologies are difficult to move from niche to mass markets. They require firms to develop innovative business models. This article focuses on how firms can develop their value propositions to increase the market attractiveness of sustainable technologies that are economically attractive but are difficult to commercialize. The results are based on an analysis of six German utilities that developed offers for power supply self-sufficiency using photovoltaic technology. The article proposes four generic tactics firms can use to market this technology—simplify, mimic, configure, and engage—and describes and discusses how each of these tactics can help firms deliver and capture value. The study also compares and contrasts how firms combine tactics to increase the attractiveness of their value propositions. The article contributes to the growing literature on business models for sustainability and proposes recommendations to help sustainable innovation overcome customer inertia.
... However, in this study, we argue, and subsequently demonstrate, that extant CVP literature has considered different design elements primarily in the linear economy context, but that there is a growing need to understand how CVP design elements are used in the circular economy context (c.f. Bohnsack & Pinkse, 2017;Manninen et al., 2018). From a broader perspective, different configurations of design elements constitute the overall structure, or "architecture," of CVPs, which crystallizes a firm's underlying value creation logic and the superior value package the firm delivers to target customers (Payne et al., 2017, p. 472). ...
... Given the increased complexity of CVPs in contemporary markets, recent studies have emphasized the need to dissect (Bohnsack & Pinkse, 2017), disentangle (Hinterhuber, 2017), or deconstruct (Payne & Frow, 2014a) CVPs into specific elements that would provide a more comprehensive and transparent understanding of the different CVP elements and their configurations that promise superior value to V. Ranta, et al. Industrial Marketing Management xxx (xxxx) xxx-xxx customers. ...
... This is determined by whether CVPs are objectively quantified, calculated, and articulated (Hinterhuber, 2017;Wouters & Kirchberger, 2015) or more subjectively demonstrated, depicted, and described (Keränen, 2017). Currently, most CVPs tend to demonstrate unique, yet unquantified, offering features (Anderson et al., 2006;Bohnsack & Pinkse, 2017;Heikka & Nätti, 2018). Finally, a granularity element articulates whether the CVP is formulated at the firm, customer segment, or individual customer level (Payne et al., 2017). ...
Article
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The transition toward the sustainability-driven circular economy is emerging across global markets. The circular economy refers to a regenerative and restorative economic system that aims to optimize resource usage and reduce waste, and offers potential to innovate novel value creation opportunities in B2B markets. However, how the value creation opportunities in circular economy are captured in supplier firms’ customer value propositions (CVPs) remains underexplored. To address this critical gap, we develop a theoretical framework that illustrates the architecture of CVPs, and use it to conduct an extensive multiple-case study across several industries, offering types, and firm sizes, analyzing 74 documented CVPs in the Finnish circular economy. The results reveal that CVPs in the circular economy embody four alternative value creation logics (resurrect, share, optimize, and replace value) that are built on different forms of innovations, and highlight different design elements. This study advances current marketing theory by illustrating how suppliers articulate CVPs in the circular economy, and highlighting the key differences to prevailing insights from linear economy. For managers, this study offers important insights into designing CVPs that resonate with circular economy–oriented customers and broader stakeholders.
... This paper's research approach adopts the VP framework suggested by Johnson, Christensen, and Kagermann (2008) to define VPs as a company's promise to stakeholders (for example, customers, investors, partners) on the value that its products or services bring. Value is the benefit or advantage that stakeholders obtain from investing, collaborating, purchasing, and using a firm's products or services Bohnsack & Pinkse, 2017;Priem et al., 2018;Bailetti et al., 2020). A firm communicates this value to stakeholders in the form of VPs and by reconfiguring its business strategy to reflect and deliver these VPs (Tantalo & Priem, 2016;Eggert et al., 2018;Lanning, 2020). ...
... They demonstrated how business models commonly revolve around specific VPs, as well as the significance of offering better linkages between value creation and capture processes. Bohnsack and Pinkse (2017) examined how firms could reconfigure their VPs to appeal to various stakeholders at the operational level. The authors proposed that companies could employ compensating, enhancing, and coupling mechanisms to reconfigure their VPs. ...
... The authors proposed that companies could employ compensating, enhancing, and coupling mechanisms to reconfigure their VPs. The reconfigured VP's focus is on showcasing, exploiting or mitigating the features of a firm's technology to stakeholders, such as investors, partners, customers, and users (Bohnsack & Pinkse, 2017). It was implied here that new VPs would require firms to reconfigure other related activities into their business model, such as focusing not only on their profits, but also on their ...
Article
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Balancing various stakeholder (often contradictory) expectations creates tensions when developing value propositions for a new firm. Customers, funders, owners, and society-at-large often expect different value outcomes from a firm. They therefore have different motivations for being involved in the firm. These differences in value expectations are more strongly expressed in technology-based ventures, which often rely heavily on access to heterogeneous external resources such as capital, specialised knowledge, distribution, and service. In this paper, we use a wicked problem lens to explore specific challenges for companies to mediate seemingly contradictory propositions. We use two dimensions of wicked problems involving complexity and complicatedness, and conduct a secondary analysis of seven technology venture case studies from Australia and New Zealand. We then categorise the configuration types of these firms' stakeholder value propositions in the context of their scale-up process. We contribute to the value proposition and business model development research streams by suggesting that the challenge of mediating value propositions that conflict can manifest itself in four types of configurations: easy, complicated, complex and wicked. Complicated and complex propositions are thorny, but with structures and processes in place, they can be adequately addressed. On the other hand, wicked propositions consist of many unknowns and require firms to collaborate with stakeholders to derive outcomes that align company scaling objective with stakeholder value propositions.
... The material properties of compostable bioplastics request a specific usage which limits their application. 1 When a sustainable product discourages or refuses a consumer's desired actions, its underlying technology will either have to be adapted through R&D or the product will require a change in application (Bohnsack & Pinkse, 2017). Wever et al. (2008, p. 14) argue that adoption is more likely when "mismatches between delivered functionalities and desired functionalities" are eliminated, which they refer to as "functionality matching." ...
... However, there are two shortcomings to this argument. First, when sustainable alternatives hit the market, they tend to underperform on desired functionality for some time (Bohnsack & Pinkse, 2017); full functionality matching is not very likely. Second, it assumes that sustainable product innovation is a linear process aimed at reaching performance parity with existing products. ...
... Although decarbonization might be a key selling point for EVs, Tesla has highlighted fast acceleration and a luxurious design to win over customers (Bohnsack & Pinkse, 2017). It tends to be the bundle of environmental, instrumental, and symbolic features that makes a product attractive (Delmas & Colgan, 2018;Noppers et al., 2014). ...
Article
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This conceptual paper argues that for sustainable product innovation to make a contribution to addressing sustainability issues, we need to understand not only why consumers adopt sustainable products but also what makes them use these in a sustainable way. To explain how specific product features can change the ways in which consumers engage with sustainable products in the adoption and usage phase, we draw on affordance theory. Affordances refer to the potential for agentic action of users in relation to a technological object. We develop a conceptual framework that explains how sustainable product innovation can lead to the design of sustainability affordances that stimulate adoption and sustainable usage. The framework shows how three forms of agency-material, firm, and user agency-interact and together influence a product's sustainability affordances that drive adoption and a change in consumer behavior. The framework explains how trade-offs between a product's environmental features and consumer expectations regarding desired functionalities and user experience can be overcome. K E Y W O R D S adoption, consumer behavior, sustainability affordances, sustainable product innovation, usage
... Those new value propositions were the use of battery and no tailpipe emissions, which were considered the point of untapped value and superiority (Bohnsack and Pinkse 2017). Bohnsack and Pinkse (2017) explained that the point of untapped value as the disruptive technology's elements that could add value to customers, while the point of superiority is the point at which Electric Vehicle excels compared to the others. ...
... Those new value propositions were the use of battery and no tailpipe emissions, which were considered the point of untapped value and superiority (Bohnsack and Pinkse 2017). Bohnsack and Pinkse (2017) explained that the point of untapped value as the disruptive technology's elements that could add value to customers, while the point of superiority is the point at which Electric Vehicle excels compared to the others. Moreover, Electric vehicles provide customers with a new user experience to drive clean transportation resulting in a new way of driving. ...
... In this paper, we analyse the emergence of an eco-innovative niche in the motorcycle industry in Italy: electric vehicles from 2010 to 2021. Electric vehicles can be considered an innovation that is transforming the mobility markets [13,17,18]. The registration of electric motorcycles has shown significant growth rates in the last few years. ...
... Among these, even if there have been previous attempts, the recent electric vehicles represent a secure competitor. Many research works claim that recent electric vehicles represent a radical innovation [13,17,18]. ...
Article
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The recent advent of electric motorcycles represents an eco-innovation that guarantees environmental sustainability and opens up market opportunities for firms. In this paper, we analyse firms’ entry into the motorcycle industry in Italy. The role of incumbent firms in the presence of new innovative niches is ambiguous. On the one hand, incumbents may display inertial behaviours, while on the other hand, they can exploit their experience and dynamic capabilities to promptly catch opportunities and enter the new niche. Based on an original dataset, we develop an empirical investigation of the role of incumbent vs. new firms in the electric motorcycle niche. We contribute to the literature by showing that new firms have so far revealed more vivid dynamics while incumbents seem to stay at the window, thus supporting the idea of the existence of inertia among incumbent firms in this industry. However, among the incumbents that have entered the new market niche, we show that the largest and those with experience in the production of scooters with 0–50 cc engines are the most likely to enter the new niche market.
... In addition, while entrepreneurs developing BMfS might believe that markets welcome social and environmental value (Schaltegger et al., 2016), incumbents are often resistant. They serve customer segments where such value does not drive demand (Bohnsack & Pinkse, 2017;Christensen, 1997;Gauthier & Gilomen, 2016). In mature industries, customers are so used to a certain type of value that they have developed stable preferences around it. ...
... First, entrepreneurs can design business models which are both distinctive and legitimate (Zhao et al., 2017). They can reconfigure the value proposition to increase or match customers' perceived value compared to the industry's mainstream business model (Bidmon & Knab, 2018;Bohnsack & Pinkse, 2017;Bohnsack et al., 2014). With a sustainable value proposition, entrepreneurs make BMfS distinctive by focusing on social and environmental value (Roome & Louche, 2016;Vernay & Gauthier, 2017) and incorporating alternative norms of appropriate business practices (Laasch, 2018;Randles & Laasch, 2016). ...
Article
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Addressing global sustainability challenges requires a mainstreaming of business models for sustainability (BMfS) in mature industries. However, the presence of an already dominant mainstream business model in an industry tends to hold back BMfS. This article investigates how new types of BMfS can become generally accepted and widely adopted in an industry. It presents a qualitative study of the mainstreaming of BMfS in the Dutch electricity industry. The findings show that this process depends on entrepreneurs’ capacity to (1) incorporate alternative institutional logics into the design of BMfS to achieve optimal distinctiveness and (2) to directly alter the dominant institutional logic of the industry to make it more conducive to BMfS. Furthermore, successful BMfS act as anomalies that indirectly alter the industry’s dominant institutional logic. Anomalies support a self-reinforcing loop that accelerates the mainstreaming process. We integrate these findings into a dynamic model of the mainstreaming of BMfS.
... To shed light on this observed divergence from traditional thought regarding competition and the firm's profitability, perhaps reassessing to whom a firm's value proposition applies would be worth considering. Bohnsack and Pinkse (2017) explored the idea of reconfiguring value propositions to increase market acceptance of disruptive products among mainstream customers. Whereas Bohnsack and Pinkse presented the reconfiguration concept to help attract mainstream customers to disruptive products, the idea of reconfiguring value propositions and my personal experience as a home recording studio owner caused me to think innovatively. ...
... This brings up the scenario in which a private home recording studio owner decides to operate his or her home studio more like a commercial recording studio. In alignment with the thinking of Bohnsack and Pinkse (2017), who recommended that firms reconfiguring their value proposition to attract mainstream customers to their company's disruptive product, home recording studio owners may need to reconfigure or reconsider their LVP. ...
Research
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The purpose of this multiple case study was to explore strategies that well-established home recording studio owners used to compete in the music recording industry.
... This was followed by a luxury sedan model, the S model in 2012; in 2013, a crossover SUV, the X model, both targeting upper-income families; and eventually, developing the 3 model, launched in 2017 as a high-volume car for middle classes. This strategy aimed at a reconfiguration of market positioning and induced a new focus to the electric car as disruptive trend in the industry (Bohnsack and Pinkse 2017). In the initial stage, the strategy was successful, as sales increased substantially and reached 76,230 vehicles in 201676,230 vehicles in (McCarthy 2017. ...
... The novelty reached also the retail business, but with an opposite strategy. The standard franchising model was perceived by Tesla as staying in tension with positioning the electric car in the high-end of the market (Stolze 2014;Bohnsack and Pinkse 2017). Car dealers sell ICVs as well. ...
Article
The firm is the central institution of modern capitalism, predominantly in the shape of the "corporation" in which entrepreneurs and investors cooperate under certain legal forms, especially limited liability. Although in modern capitalism, the emergence of these legal and organizational forms was intimately tied to technological innovation and the ongoing deployment of technologies, most economic theories about the corporation tend to neglect its material dimension, mediating between user practices, technologies and production via the mobilization of symbolic media, such as industrial design. We advance a semiotic theory of the corporation, which we relate to recent developments in sociology, especially organizational ecology. In this view, corporations embody technologies in semiosis, which is a complex multi-level process combining different dimensions that relate to various audiences, such as users or the financial community. In this process, products are embedded in diverse functional and symbolic hierarchies, defining industries and patterns of usages. We illustrate our argument in sketching the case of Tesla corporation and its potential in disrupting the automotive industry.
... Within this stream of research, we also identified studies on drivers and barriers to BM adoption(Abuzeinab, Arif, & Qadri, 2017;Høgevold et al., 2014;Matos & Silvestre, 2013;Rauter, Jonker, & Baumgartner, 2017). Value creation and value proposition are dimensions of BM that are central in some papers (e.g.,Bohnsack & Pinkse, 2017;Hermann & Wigger, 2017;Ludeke- Freund & Dembek, 2017;. These studies are very oriented to the description of multiple aspects that characterize BMs for ES.In this research stream, we included papers that detailed specific typologies of BMs (e.g.,Gaiardelli, Resta, Martinez, Pinto, & Albores, 2014). ...
Article
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Recently, business models for environmental sustainability have gained increasing attention in the management field and among practitioners and stakeholders. This study aims to analyse the state of the art on the topic by reviewing the growing but mainly phenomenon‐driven research. In particular, by identifying main research trends and relevant gaps in the literature and by providing future research avenues, this paper advances the debate on the need for alternative concepts of doing business that go beyond the creation of economic value for a company in a way that generates value for the society. Our article undertakes two stages of screening the available literature and selects 151 peer‐reviewed articles published between 2007 and early 2019 for the review. The paper provides the first comprehensive systematic review of business models in the field of environmental sustainability with a detailed descriptive and critical analysis and with a discussion of future research opportunities.
... Improvements tell customers that they can deliver a better service than the incumbent models (Cohen, 2018). Therefore, they try to differentiate themselves from their competitors through their value proposition (Bohnsack & Pinkse, 2017). ...
Article
The collaborative economy brings new business models through digital platforms which compete with services that have traditionally been highly regulated. This is the case of the taxi sector. The new business models that have emerged in private passenger transport are mainly based on the customisation opportunities provided by big data, yet the traditional business model followed by the taxi sector is finding it difficult to adapt to these changes in order to remain competitive, as we can observe from a content analysis of news over the last year in Spain. In this paper, we analyse the need to raise these issues through a governance model in which all stakeholders can express their opinions, trying to achieve solutions based on consensus for real deregulation. In order to achieve this consensus, government will need to play a crucial role, despite the fact that it has recently transferred decision-making to regional and local governments.
... They argue that disruptive technologies can be made more attractive for mainstream customers by reconfiguring value propositions and combining these with an inventive business model. 16 Further extensions suggest that disruptive innovation is explained by an offering that has a technology enabler that can convey its value proposition of convenience, affordability, and simplicity and allow for improvement, and that is paired with a business model innovation that enables it to exist alongside its new value proposition. 17 In the African context, innovations need to create scalable new markets by addressing the underlying realities of institutional voids-inadequate infrastructure, ineffective sociopolitical governance and regulation, chronic shortages of resources and income, and market heterogeneity. ...
Article
This article explores solutions-driven innovation within an emerging market context, specifically in Africa, and how it can be utilized as a strategy by multinational enterprises to address institutional voids in these markets. Through a qualitative case study of Uber and their expansion into Africa, it demonstrates how solutions-driven innovation can create markets and mitigate distance and institutional voids in emerging market contexts. Uber created markets in Africa by developing a solution to consumers’ unmet needs. Such solutions-driven innovation can create opportunities not only at the bottom but also in the middle of the economic pyramid. But to be successful in African markets requires being mindful of how institutional voids necessitate innovative solutions and potentially different value propositions.
... The example of car sharing used in the paper (Getaround) was explicitly chosen because it is a peer-to-peer digital platform business model. Emergent technologies in electric traction, connectivity, autonomous control, big data, and the Internet of Things are enabling the realisation of novel automobility services (Bohnsack and Pinkse, 2017;Merfeld et al., 2019;Skeete, 2018). The implications for vehicle manufacturers, their supply structures, and their attendant business models are profound, but uncertain (Bidmon and Knab, 2018). ...
Article
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This paper examines the scope for network platform business models offering ‘automobility-as-a-service’ to disrupt the existing automotive market and industry. The paper uses three examples (Getaround, BlaBlaCar and Uber) to illustrate distinct versions of the network platform business model concept. Despite expectations that automobility-as-a-service, enabled by digital platforms, may erode the market for new cars and the existing model of individual car ownership, the paper argues that it is not necessarily disruptive to the incumbent automotive companies. Rather, network platform business models via automobility-as-a-service are argued to be one mechanism by which the primacy of the car may be retained. In turn this has important implications for the durability of the automotive industry, and of the unsustainable aspects of platform business models.
... Based on these findings, new business models for electric vehicles can be developed (Bohnsack and Pinkse 2017) and general guidelines may be offered to the EV users for optimal starting times of charging sessions (Gan et al. 2013;Wang et al. 2015). More concretely, we suggest that in order to communicate with the user and to provide the financial benefits of the optimization model an aggregator could develop an app. ...
Chapter
Eco-efficiency is achieved by creating more value with less environmental impact. Since small- and medium-sized enterprises (SMEs) are responsible for most of the production in the industrial output, their adoption of and awareness about elements of eco-efficiency is crucial for green growth. In this study, we investigate the attitudes of Turkish SMEs over three items concerning eco-efficiency: (1) increasing resource efficiency investments, (2) producing more environmentally compatible “green” products or services, and (3) the consumption of energy from renewable resources. To this end, we utilize data on Turkish SMEs from the 2017 wave of the Flash Eurobarometer, Small- and Medium-Sized Enterprises, Resource Efficiency and Green Markets (GESIS) dataset and conduct descriptive analyses. Our investigation of 299 SMEs from Turkey reveals that there is a distance between Turkish SMEs and the elements of eco-efficiency. Many firms criticize the administrative and legal barriers to resource efficiency investments and acknowledge the need for external support to improve resource efficiency. The results also indicate that most of Turkish SMEs are unwilling to produce green products or services. Furthermore, only a small fraction of the SMEs relies on renewable sources for self-generation. As SMEs construct a sizeable portion of the output in the economy, these results show that the contribution of SMEs to green growth will be lacking in the coming years, unless further action is taken, and supported by the Turkish government.
... A comprehensive analysis of the empirical literature indicates that research on alliance evolution has ignored the research and development of technology and the measurement of the technological lifecycle [41]. The substitution of technological innovation is restricted by the embedded innovation ecosystem [42]. Competition between old technology and substitutable technology leads to the unstable development of the current innovation ecosystem [12,43]. ...
Article
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Why does an industrial alliance upgrade sometimes quickly and sometimes very slowly? The answer to this question can scientifically reveal the key driving forces of the sustainable intergenerational evolution of industrial alliance innovation ecosystems. From the perspective of structural evolution, we analyzed and compared the key driving forces using a longitudinal case study from the 2G to 3G, and then to the 4G innovation ecosystems of China's Time Division Industrial Alliance (TDIA). The findings showed that the internal key driving forces influencing the intergenerational evolution of the industrial alliance innovation ecosystem include the superiority of the new innovation ecosystem, the sustainability of the old ecosystem, and inheritance between the new and old ecosystems. Market demand and government policy indirectly affect the intergenerational evolution by shaping the environment in which the innovation ecosystems are embedded. This research will support industrial alliances and core members in making strategic innovation ecosystem decisions and support governments in designing related policies with scientific theoretical guidance and decision-making references. In particular, this study aimed to offer inspiration for the promotion of the successful sustainable evolution of China's TDIA towards 5G.
... Therefore, the understanding of innovation must be expanded to include new business models accompanied by pure new technologies or R&D processes (Chesbrough, 2007). Flexible and dynamic business models will greatly contribute to value creation and sustainable competitive advantage, thereby allowing disruption to be managed (Alberti-Alhtaybat et al., 2019;Bohnsack and Pinkse, 2017). However, it is important to note that disruptive innovations usually adopt completely different business models that are not only economically sustainable but also consistent with existing market realities, customer expectations and competitive pressures (Chesbrough and Rosenbloom, 2002;Christensen, 2006;Cozzolino et al., 2018;DaSilva et al., 2013;Markides, 2006;Sandstr€ om, 2011). ...
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Purpose The purpose of this study is to connect disruptive innovation and sharing economy by exploring the underlying mechanisms of how a disruptive innovation–based business project creates, delivers and captures value in sharing economy through analyzing the case of bike sharing in China. Design/methodology/approach An elaborate case study is used to unfold the process as well as the underlying mechanism and relationships among disruptive innovation, business model, bike-sharing business and value creation in sharing economy. Findings Bike sharing case fits well in disruptive innovation theory. Its low price and great convenience have led to rapid development in China. However, failures to improve their products and services and build an effective business model which can create, deliver and capture value have caused the failure of many bike-sharing companies. Other factors such as strategic decision-making, internal management problems, external conflicts as well as uncivilized consumer behaviors have also inhibited the sustainable development of bike-sharing companies. Originality/value The theoretical contributions of this study include the following: to explore how a disruptive innovation–based business creates, delivers and captures value successfully in sharing economy. This study contributes to both research and practice on disruptive innovation and sharing economy.
... However, although the industry developed lower emission vehicles in response, a major mobility transition has not taken place yet (Bakker, Van Lente, & Engels, 2012;Bohnsack et al., 2015;Oltra & Saint Jean, 2009;Pinkse et al., 2014;Van Bree, Verbong, & Kramer, 2010). This most notably applies to EVs, which for a long time lacked economically viable business models (Bohnsack & Pinkse, 2017;Budde Christensen, Wells, & Cipcigan, 2012;Kley, Lerch, & Dallinger, 2011) despite several experiments . Still, within the last decade, the industry changed from an outright sceptical view, following an earlier failed attempt by General Motors (GM) with the EV1, which was eventually scrapped in 2003, to a much broader adoption of purpose-built or adapted EVs. ...
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Given that entire industries face sustainability challenges, it is important to understand the dynamics that lead “firms‐in‐an‐industry” to engage in sustainable product innovation. To provide more insight into the question of how innovation activities spread from individual firm action to an industry‐wide engagement, this paper examines the automobile industry and the development of electric vehicles (EVs). The analysis covers automobile incumbents over a crucial decade for EV development in the industry, focusing on the different strategic motives that especially the so‐called “first movers” used to justify their earlier engagement. We find that EVs became a core pillar of the incumbents' technology strategies through a combination of coercive, normative, and mimetic pressures. Yet, the strategic motives to engage in EVs stayed poles apart between different companies. The insights from our study are relevant for those interested in the diffusion of sustainable product innovation and in incumbent behaviour in sustainability transitions.
... Disruptive technologies provide opportunities for companies to connect with customers, engage in continuous dialogue, create more efficient activities and synergies between processes, and learn about market realities (e.g. Bohnsack and Pinkse, 2017;Broekhuizen, Bakker and Postma, 2018;Caro and Sadr, 2018). Disruptive technologies and the associated business transformation has implications for customers in terms of more alternatives and opportunities, informed decisions, support in the execution of different activities, and better connections and networks to relevant entities (Di Pietro, Edvardsson, Reynoso, Renzi, Toni, and Guglielmetti Mugion, 2018;Govindarajan and Ramamurti, 2018;Wunderlich et al., 2015). ...
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Different theoretical perspectives in service research emphasize distinct aspects, and thereby create different views; this chapter discusses implications of adopting a customer-dominant perspective of service business. Thus, it describes customer-dominant logic, stressing the customer's primary role and the difference between customer and provider logics. This perspective results in different theoretical and practical implications than those derived from other service perspectives. Customer logic is a central concept, as customer-dominant business logic as a management approach is based on understanding customers' logics. Customer logic holistically captures the mental model and sensemaking behind customers' choices and activities. It is a coordinating concept in which the patterns of customers' overt and covert activities, experiences and goals are integrated. Service business is here used in a generic sense to include any type of service provision, commercial or non-commercial, directed toward any type of customer, including single consumers or business customers, as well as groups and collectives. For service research, the message is to recognize the different interpretations of service that arise from changing the focus from provider to customer, and more specifically to scrutinize established concepts and models and innovate new ones to fit the customer's reality. Service practitioners are advised to gain an understanding of current and evolving customer logics in order to gain and maintain a competitive advantage by being able to support customers in achieving their goals. The chapter also elaborates on related current topics in service research and the contribution of customer-dominant logic to these academic, societal, and business challenges.
... A broader conceptualization understands the value proposition to be directed at company stakeholders as a whole (Frow and Payne, 2011), implying a variety of different types of value demanded and proposed (Emerson, 2003). For instance, Bohnsack and Pinkse (2017) study how car manufacturing companies reorganized value propositions to respond to demands for environmentally responsible mobility. ...
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This article explores the phenomenon that corporations’ commercial-logic business models increasingly embed responsibility-logic patterns: The proverbial leopards’ spots. We have conducted a thematic analysis of responsibility patterns in annual report business model descriptions (artefacts) and a qualitative comparative analysis of corporations’ strategic environment. We find distinct responsibility patterns, uniquely combined in four distinct types of responsibility business model artefacts. We explain these types through responses to institutional complexity between commercial and responsibility logics. Strategic responses were enabled or constrained by the characteristics of the varying spaces of institutional complexity of particular corporations. We contribute to an emerging heterogeneous business model literature by providing empirical evidence. We contribute to the institutional discussion of corporate responsibility by providing a typology of responsibility business models and by explaining why each type emerged in their respective institutional space. We also discuss how practitioners’ efforts to embed responsibility into their business models may benefit from our findings.
... They argue that disruptive technologies can be made more attractive for mainstream customers by reconfiguring value propositions and combining these with an inventive business model. 16 Further extensions suggest that disruptive innovation is explained by an offering that has a technology enabler that can convey its value proposition of convenience, affordability, and simplicity and allow for improvement, and that is paired with a business model innovation that enables it to exist alongside its new value proposition. 17 In the African context, innovations need to create scalable new markets by addressing the underlying realities of institutional voids-inadequate infrastructure, ineffective sociopolitical governance and regulation, chronic shortages of resources and income, and market heterogeneity. ...
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This article explores solutions-driven innovation within an emerging market context, specifically in Africa, and how it can be utilized as a strategy by multinational enterprises to address institutional voids in these markets. Through a qualitative case study of Uber and their expansion into Africa, it demonstrates how solutionsdriven innovation can create markets and mitigate distance and institutional voids in emerging market contexts. Uber created markets in Africa by developing a solution to consumers’ unmet needs. Such solutions-driven innovation can create opportunities not only at the bottom but also in the middle of the economic pyramid. But to be successful in African markets requires being mindful of how institutional voids necessitate innovative solutions and potentially different value propositions.
... Technological innovation is a fundamental part of the competitiveness of companies (Bohnsack and Pinkse, 2017). Without the benefits enabled by technology, it is not easy to improve product and service development (Moutinho and Meidan, 1989), optimize production processes (Dolgui and Ivanov, 2020), and people training (Fichman and Kemerer, 1997). ...
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This research investigates the perception, acceptance, and economic valuation of new generations of consumers concerning disruptive technologies (DT) using the modified Technology Acceptance Model (TAM) as a reference. Specifically, it analyzes a group of university students' responses after experimenting with augmented reality (AR) glasses and 3D printers. The results show an eminent interest in technology on the part of young people and a frequent acceptance of its inclusion in their daily lives, and a clear intention to acquire this type of technology someday. Likewise, social projection and self-realization should be considered by marketing managers for the positioning and support of DT's future sales among young people. Based on the existing literature and the research results, the role of technology in generations' daily lives Y and Z is discussed.
... A growing literature has studied the role of business models to understand how firms navigate the energy transition Pereira, Specht, Silva, & Madlener, 2018;Vernay, Sohns, Schleich, & Haggège, 2019). Studies have analyzed emerging business models for sustainable energy, focusing on electric vehicles (Bohnsack & Pinkse, 2017;Bohnsack et al., 2014), solar PV technology (Vernay, Sohns, Schleich, & Haggège, 2019), smart grids (Niesten & Alkemade, 2016;Shomali & Pinkse, 2016), distributed energy resources (Burger & Luke, 2017), and demand response and energy efficiency (Behrangrad, 2015;Horváth & Szabó, 2018). These studies provide an outline of what sustainable energy business models might look like by identifying how value is created, delivered, and captured. ...
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Delivering a low-carbon future depends significantly on the decarbonization of the electricity industry. Increasingly, electric utilities have experienced pressure to redefine their business model amid the need to transition to a sustainable energy system. In this study, we focus on how utilities have changed their business model to adapt to the emergence of sustainable energy innovations in the energy system and which value creation drivers they draw on. By framing the business model as an activity system, we capture how utilities expand the boundaries of their business to integrate sustainable energy activities. We analyze 756 boundary-spanning transactions (mergers and acquisitions, joint ventures, and strategic alliances) of 20 European utilities from 1990 to 2019. We find that utilities pursued 20 distinct sustainable energy activities across renewable electricity generation, smart electricity management, emerging technologies, and sustainable mobility. Preference for renewable energy activities, particularly wind generation is observed. The combination of renewable electricity generation and smart electricity management indicates a focus on systems integration. We also find preference for integrating activities through mergers and acquisitions. Utilities focus on acquiring sustainable energy activities leading to a novel bundling of activities contributing to decarbonization while reinforcing the efficiency and lock-in of their traditional business model.
... This often involves new products and/or new ways of using products (e.g., following regular maintenance schedules or using electric power instead of liquid fuels). The Product-Oriented Service (9.2) pattern offers an approach to value proposition design that can increase the attractiveness of new and/or more complex but ecologically superior products (Bohnsack & Pinkse, 2017). Problem statement New or complex products are often less attractive for potential users and thus require additional support and services, such as maintenance or updates, to convince users to switch from old and ecologically inefficient products to new and more eco-friendly versions. ...
Chapter
This chapter describes avenues for future research to develop a “sustainable business model pattern language.” The chapter reflects on how sustainable business model (SBM) patterns can be identified, described, and turned into a design language to support the development of more sustainable organisations. Such organisations solve ecological, social, and economic problems through new approaches to proposing, delivering, capturing, and creating value. Theoretical and conceptual elements as well as methodological issues of developing an SBM pattern language are discussed. The value of using patterns in practice is illustrated with two business model innovation tools, one analogue and one digital, that use different patterns, including revenue and pricing, circular economy, and SBM patterns. Finally, questions for future research are proposed.
... The process of implementing and upscaling busi- ness models--the sustaining or efficiency stage--is still relatively underdeveloped (Berends, Smits, Reymen, & Podoynitsyna, 2016;Birkinshaw & Goddard, 2009). Not much is known about how firms resolve the dilemmas that occur during the BMI journey, which have been identified in previous research: what organizational form to choose (Christensen, Bartman, & Van Bever, 2016), how to plan ahead (Sosna, Trevinyo-Rodríguez, & Velamuri, 2010), and how to reconfigure and devel- op a convincing value proposition (Albert, Kreutzer, & Lechner, 2015;Bohnsack & Pinkse, 2017). This lack of research is surprising given that many business models fail during implementation (Christensen et al., 2016). ...
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Battery Electric Vehicles (BEVs) is a promising technology. However, it suffers from low range characteristics thus increasing the anxiety to prospect customers and hindering its market penetration. To overcome this challenge, a range extender that can generate additional power to charge the battery could be the solution. This brief review article will highlight the prospects and challenges of range extender technology for electric vehicles. A number of automobile manufacturers have launched their Range Extended Electric Vehicles (REEVs) models and the detailed comparison will be given. Several types of range extenders will be discussed, including the internal combustion engine, microturbine, and fuel cell. Lastly, this report will suggest the use of Low Temperature Combustion (LTC) i.e Homogeneous Charge Compression Ignition (HCCI) engine be utilised as range extenders for electric vehicles.
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Thesis
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This article investigates legitimization processes and organizations' strategies for developing and diffusing new technologies. Drawing on cases in agricultural transgenic technology and genomics in forestry, the authors provide a framework to help managers develop strategies for more efficient technology development and diffusion. Strategies that fail to consider legitimization processes, especially in controversial social environments and/or varying institutional settings, could result in costly delays or promising technology left sitting on the shelf Technology developers need to identify key technological, commercial, organizational, and societal uncertainties during the early phases of the technology's development, allowing them to shape the technology for more efficient diffusion.
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The automobile industry's high costs of entry, economies of scale, and network effects from distribution, fueling, and service lead many to conclude that new entrants have no chance. Tesla Motors has overcome many barriers to pioneer electric cars. Starting with partnerships and a minimum viable product, Tesla is working to innovate and scale up. Tesla now produces a top-selling luxury car and has a market capitalization twice that of Fiat Chrysler and half that of General Motors or Ford. Tesla has shown that a startup can enter and disrupt the status quo in one of the most established industries. Published as Edward Peter Stringham, Jennifer Kelly Miller, and J.R. Clark (2015) Overcoming Barriers to Entry in an Established Industry: Tesla Motors. California Management Review 57/4 : 85-103. © 2015 by the Regents of the University of California. Copying and permissions notice: Authorization to copy this content beyond fair use (as specified in Sections 107 and 108 of the U. S. Copyright Law) for internal or personal use, or the internal or personal use of specific clients, is granted by the Regents of the University of California for libraries and other users, provided that they are registered with and pay the specified fee via Rightslink® or directly with the Copyright Clearance Center.
Article
Disruptive strategic innovations are not necessarily superior to the traditional ways of competing, nor are they always destined to conquer the market. Rushing to embrace them can be detrimental for established companies when other responses, including ignoring the innovation, make more sense.
Article
Why is it so difficult for established companies to pull off the new growth that business model innovation can bring? Here's why: They don't understand their current business model well enough to know if it would suit a new opportunity or hinder it, and they don't know how to build a new model when they need it. Drawing on their vast knowledge of disruptive innovation and experience in helping established companies capture game-changing opportunities, consultant Johnson, Harvard Business School professor Christensen, and SAP co-CEO Kagermann set out the tools that executives need to do both. Successful companies already operate according to a business model that can be broken down into four elements: a customer value proposition that fulfills an important job for the customer in a better way than competitors' offerings do; a profit formula that lays out how the company makes money delivering the value proposition; and the key resources and key processes needed to deliver that proposition. Game-changing opportunities deliver radically new customer value propositions: They fulfill a job to be done in a dramatically better way (as P&G did with its Swiffer mops), solve a problem that's never been solved before (as Apple did with its iPod and iTunes electronic entertainment delivery system), or serve an entirely unaddressed customer base (as Tata Motors is doing with its Nano - the $2,500 car aimed at Indian families who use scooters to get around). Capitalizing on such opportunities doesn't always require a new business model: P&G, for instance, didn't need a new one to lever-age its product innovation strengths to develop the Swiffer. A new model is often needed, however, to leverage a new technology (as in Apple's case); is generally required when the opportunity addresses an entirely new group of customers (as with the Nano); and is surely in order when an established company needs to fend off a successful disruptor (as the Nano's competitors may now need to do).
Article
Low-emission vehicle (LEV) technologies have grown in the 1990s, but have since experienced fluctuating interest. Initially, electric vehicles (EVs) were the most promising technology. Most large car firms developed EVs and started bringing them to the market, in limited numbers. Yet, car firms halted their EV engagement around 2001 and focused on hybrid vehicles (HVs) and fuel-cell vehicles (FCVs) instead. Hybrids found their way into the product portfolios of most car manufacturers while FCVs failed to gain traction. In 2006, car firms again committed to EVs, and on a larger scale. To better understand recurring waves of firms’ low-emission-vehicle investments in the international context, this paper explores the influence of geographically-bound government policies on car firms’ innovation strategies. An analysis of archival data from 1997 to 2010 details LEV-specific developments per region/firm, and shows the complex interplay between policies on local, national and international levels and firms’ strategies. Three mechanisms seem to shape the international LEV trajectory: (1) international policy diffusion (vertically and horizontally), (2) firms’ international operations, (3) fit between policy requirements and firm capabilities. Heeding the call for a better geographical conceptualization of technological trajectories, this paper also proposes a framework that explains co-evolution between government policies and car manufacturers.
Article
The paper aims to generate systematically business model innovations in the field of electric mobility. It introduces a new framework, in which a business model denotes a value-focused concept with five value dimensions: value proposition, value communication, value creation, value delivery and value capture. The framework enables the classification of business model patterns, identified in the literature, according to five categories. The combination of patterns from different dimensions can lead to the systematic generation of business model innovations. But the number of business models that can result from pattern combinations can be overwhelming. Subsequently, the paper only evaluates the extent to which business model patterns that are not necessarily observed in the automotive sector can be useful for the field of electric mobility, and how they can be adapted to fit into the new context. We find that the transferability strongly depends on the actor's role in the system, if it is a manufacturer, supplier or service provider. More importantly, our analysis shows that some models such as product-to-service (e.g., car sharing service), already implemented in the automotive industry, will continue to be successful in the future because of their potential of increasing customer acceptance and technology diffusion. Many other business models-so far used in other sectors, but not in the automotive industry-may integrate the field of electric mobility. Razor and blades, own the undesirable concept, and leverage new influencers are all promising business models, if they can be fitted adequately to the new context induced by the new technology.
Article
Purpose – Research into the identification and development of value propositions has recently been identified as a key research priority by the Marketing Science Institute. The purpose of this article is to identify and develop a process for value proposition deconstruction that can help organizations transform their value propositions in order to gain an improvement in their competitive position. Design/methodology/approach – A case study of an exemplar organization in the health care sector is used to develop an approach for value proposition deconstruction. Using the business system concept as a theoretical framework, the key value-adding elements that comprise this organization's value proposition are identified. A leading financial services firm is used to demonstrate how this learning approach can be successfully applied in developing a new and innovative value proposition. Findings – Using the business system framework, a structured process for deconstructing value propositions is developed. This framework is extended to explicitly acknowledge the value-in-use that results from different encounters, to incorporate learning processes and to recognize its interactive and recursive nature. Practical implications – The authors provide practitioners with insight into how to formulate new or improved value propositions. Originality/value – This work addresses two important and previously unaddressed research questions: how can the process of deconstruction of an exemplar organization's value proposition provide a more comprehensive understanding of the elements that comprise a superior value offering; and how can this process be applied to other organizations seeking to improve their value proposition?
Article
Sustainable technologies challenge prevailing business practices, especially in industries that depend heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the specific characteristics of sustainable technologies into new ways to create economic value and overcome the barriers that stand in the way of their market penetration. A key issue is the respective impact of incumbent and entrepreneurial firms’ path-dependent behaviour on the development of such new business models. Embedded in the literature on business models, this paper explores how incumbent and entrepreneurial firms’ path dependencies have affected the evolution of business models for electric vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a five-year period (2006-2010), the paper identifies four business model archetypes and traces their evolution over time. Findings suggest that incumbent and entrepreneurial firms approach business model innovation in distinctive ways. Business model evolution shows a series of incremental changes that introduce service-based components, which were initially developed by entrepreneurial firms, to the product. Over time there seems to be some convergence in the business models of incumbents and entrepreneurs in the direction of delivering economy multi-purpose vehicles.
Article
Electric Vehicles (EVs) are promoted as a viable near-term vehicle technology to reduce dependence on fossil fuels and resulting greenhouse gas (GHG) emissions associated with conventional vehicles (CVs). In spite of the benefits of EVs, several obstacles need to be overcome before EVs will be widely adopted. A major barrier is that consumers tend to resist new technologies that are considered alien or unproved, thus, policy decisions that consider their critical concerns will have a higher level of success. This research identifies potential socio-technical barriers to consumer adoption of EVs and determines if sustainability issues influence consumer decision to purchase an EV. This study provides valuable insights into preferences and perceptions of technology enthusiasts; individuals highly connected to technology development and better equipped to sort out the many differences between EVs and CVs. This group of individuals will likely be early adopters of EVs only if they perceive them to be superior in performance compared to CVs. These results can guide policymakers in crafting energy and transportation policy. It can also provide guidance to EV engineers' decision in incorporating consumer preference into EV engineering design.
Article
The aim is to understand how private car drivers’ perception of vehicle attributes may affect their intention to adopt electric vehicles (EVs). Data are obtained from a national online survey of potential EV adopters in the UK. The results indicate that instrumental attributes are important largely because they are associated with other attributes derived from owning and using EVs, including pleasure of driving (hedonic attributes) and identity derived from owning and using EVs (symbolic attributes). People who believe that a pro-environmental self-identity fits with their self-image are more likely to have positive perceptions of EV attributes. Perceptions of EV attributes are only very weakly associated with car-authority identity.
Article
This paper explores the role of the business model in capturing value from early stage technology. A successful business model creates a heuristic logic that connects technical potential with the realization of economic value. The business model unlocks latent value from a technology, but its logic constrains the subsequent search for new, alternative models for other technologies later on-an implicit cognitive dimension overlooked in most discourse on the topic. We explore the intellectual roots of the concept, offer a working definition and show how the Xerox Corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day. We then show the long shadow that this model cast upon Xerox's later management of selected spin-off companies from Xerox PARC. Xerox evaluated the technical potential of these spin-offs through its own business model, while those spin-offs that became successful did so through evolving business models that came to differ substantially from that of Xerox. The search and learning for an effective business model in failed ventures, by contrast, were quite limited.
Article
Purpose – This paper seeks to advance the theory on value proposition and innovation by offering a framework for identifying value proposition elements. Design/methodology/approach – A single embedded case study is conducted based on Amazon.com's innovations. Findings – By identifying and systematically analysing innovations by Amazon.com, the concept of value proposition was decomposed into five components: performance, ease of use, reliability, flexibility and affectivity (PERFA). Research limitations/implications – The research did not focus on the relationships between the value proposition elements and their relevance in different contexts such as product, industry or customer life cycle. Practical implications – Managers should support their decision to innovate the value proposition based on customers' perceived value. The findings provide guidance to managers on how to uncover innovative value propositions and potentially create new demand in an uncontested market space. Originality/value – The paper is an original attempt to correlate value proposition and innovation. It provides researchers and practitioners with a better understanding of the structure of a value proposition and how innovation can influence it.
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Article
The three issues of measuring low-end disruptions, general measure of disruptiveness, and the criticism of Christensen's (1997) disruptiveness notion by Danneel (2004), are discussed. The aim is to add rigor to an important, substantive area of research on disruptiveness, and the first step in achieving this goal is to identify ways to measure the disruptiveness construct. This is done by elaborating the use of ex post measures to make ex ante predictions about the type of incumbents better able to develop disruptive innovations in relation to other firms. The disruptive technology framework to make ex ante predictions about the type of firms likely to develop disruptive innovations.
Article
By focusing on strategies of competition in established industries, companies and researchers have overlooked the value of creating new market spaces where there are no competitors.These market spaces are called “blue oceans.” Although established industries (“red oceans”) are growing increasingly cluttered, few companies are currently attempting to create new markets. The U.S. wine industry provides an example of how various tools and frameworks can be applied in the creation of blue oceans.One such framework, the strategy canvas, captures the current states of play in the known market space.The four actions framework reconstructs buyer value elements by posing four key questions that challenge an industry's strategic logic and business model.When a particular wine manufacturer applied the four actions framework to the strategy canvas, it created a wine whose strategic profile broke from the competition and created a blue ocean. A third tool, the eliminate-reduce-raise-create grid, pushes firms to act on all four questions posed by the four actions framework and to create a new value curve.When expressed through a value curve, an effective blue ocean strategy has three complementary qualities: focus, divergence, and a compelling tagline. Embedded in the value curves of an industry is a wealth of strategic knowledge on the current status and future of a business. For example, when a firm's value curve zigzags, it means that the firm does not have a coherent strategy.(SAA)
Article
Christensen's (1997) thesis of disruptive technology has been highly praised and popular with managers. Two of its premises are important and insightful. These deal with the performance path of a disruptive technology and its impact on dominant incumbents who ignore it in favor of listening to their current consumers. However, Christensen's thesis also suffers from limitations, two of which are troubling: ambiguity in the definition of disruptive technology and the logic of the sampling to test its validity. Several studies I have conducted over the years suggest that the disruption of incumbents - if and when it occurs - is due not to technological innovation per se but rather to incumbents' lack of vision of the mass market and an unwillingness to cannibalize assets to serve that market. I have developed metrics to test these concepts, along with models to predict the outcomes and financial value of strategic changes firms can make to avoid these problems.
Article
Strategy scholars have used the notion of the Business Model to refer to the ‘logic of the firm’ – how it operates and creates value for its stakeholders. On the surface, this notion appears to be similar to that of strategy. We present a conceptual framework to separate and relate the concepts of strategy and business model: a business model, we argue, is a reflection of the firm's realized strategy. We find that in simple competitive situations there is a one-to-one mapping between strategy and business model, which makes it difficult to separate the two notions. We show that the concepts of strategy and business model differ when there are important contingencies on which a well-designed strategy must be based. Our framework also delivers a clear distinction between strategy and tactics, made possible because strategy and business model are different constructs.
Book
Analyzes how successful firms fail when confronted with technological and market changes, prescribing a list of rules for firms to follow as a solution. Precisely because of their adherence to good management principles, innovative, well-managed firms fail at the emergence of disruptive technologies - that is, innovations that disrupt the existing dominant technologies in the market. Unfortunately, it usually does not make sense to invest in disruptive technologies until after they have taken over the market. Thus, instead of exercising what are typically good managerial decisions, at the introduction of technical or market change it is very often the case that managers must make counterintuitive decisions not to listen to customers, to invest in lower-performance products that produce lower margins, and to pursue small markets. From analysis of the disk drive industry, a set of rules is devised - the principles of disruptive innovation - for managers to measure when traditional good management principles should be followed or rejected. According to the principles of disruptive innovation, a manager should plan to fail early, often, and inexpensively, developing disruptive technologies in small organizations operating within a niche market and with a relevant customer base. A case study in the electric-powered vehicles market illustrates how a manager can overcome the challenges of disruptive technologies using these principles of disruptive innovation. The mechanical excavator industry in the mid-twentieth century is also described, as an example in which most companies failed because they were unwilling to forego cable excavator technology for hydraulics machines. While there is no "right answer" or formula to use when reacting to unpredictable technological change, managers will be able to adapt as long as they realize that "good" managerial practices are only situationally appropriate. Though disruptive technologies are inherently high-risk, the more a firm invests in them, the more it learns about the emerging market and the changing needs of consumers, so that incremental advances may lead to industry-changing leaps. (CJC)
Article
Climate change and global resource shortages lead to a rethinking of classic individual mobility basing on combustion engines. As a result of technological improvements first electric vehicles are introduced and further market penetrations can be expected. But due to a possible wider implementation of battery-powered electrical propulsion systems in future, new challenges arise for both the classic automotive industry and further new players, e.g. battery manufacturers, the power supply industry or other service providers. Due to the various application cases of electric vehicles discussed topically, numerous business models can emerge leading to new shares in the value creation and involving new participating players. Consequently, the individual stakeholders are uncertain as to which business models are really effective with regard to targeting a profitable overall concept. Therefore, the aim of this contribution is to define a holistic approach to developing business models for electric mobility, regarding the holistic system on the one hand and giving decision support for concerning enterprises on the other hand. For this, the basic elements of electric mobility will be observed and topical approaches for business models for various stakeholders will be discussed. The paper closes with a systemic instrument for business models basing on morphological methods. --
Article
The goal of this dissertation is to find and provide the basis for a managerial tool that allows a firm to easily express its business logic. The methodological basis for this work is design science, where the researcher builds an artifact to solve a specific problem. In this case the aim is to provide an ontology that makes it possible to explicit a firm's business model. In other words, the proposed artifact helps a firm to formally describe its value proposition, its customers, the relationship with them, the necessary intra- and inter-firm infrastructure and its profit model. Such an ontology is relevant because until now there is no model that expresses a company's global business logic from a pure business point of view. Previous models essentially take an organizational or process perspective or cover only parts of a firm's business logic. The four main pillars of the ontology, which are inspired by management science and enterprise- and processmodeling, are product, customer interface, infrastructure and finance. The ontology is validated by case studies, a panel of experts and managers. The dissertation also provides a software prototype to capture a company's business model in an information system. The last part of the thesis consists of a demonstration of the value of the ontology in business strategy and Information Systems (IS) alignment.
Article
Corporate executives must constantly look backward, attending to the products and processes of the past, while also gazing forward, preparing for the innovations that will define the future. This mental balancing act is one of the toughest of all managerial challenges--it requires executives to explore new opportunities even as they work diligently to exploit existing capabilities--and it's no surprise that few companies do it well. But as every businessperson knows, there are companies that do. What's their secret? These organizations separate their new, exploratory units from their traditional, exploitative ones, allowing them to have different processes, structures, and cultures; at the same time, they maintain tight links across units at the senior executive level. Such "ambidextrous organizations," as the authors call them, allow executives to pioneer radical or disruptive innovations while also pursuing incremental gains. Of utmost importance to the ambidextrous organization are ambidextrous managers--executives who have the ability to understand and be sensitive to the needs of very different kinds of businesses. They possess the attributes of rigorous cost cutters and free-thinking entrepreneurs while also maintaining the objectivity required to make difficult trade-offs. Almost every company needs to renew itself through the creation of breakthrough products and processes, but it shouldn't do so at the expense of its traditional business. Building an ambidextrous organization is by no means easy, but the structure itself, combining organizational separation with senior team integration, is not difficult to understand. Given the executive will to make it happen, any company can become ambidextrous.
Article
Examples of consumer value propositions that resonate with customers are exceptionally difficult to find. When properly constructed, value propositions force suppliers to focus on what their offerings are really worth. Once companies become disciplined about understanding their customers, they can make smarter choices about where to allocate scarce resources. The authors illuminate the pitfalls of current approaches, then present a systematic method for developing value propositions that are meaningful to target customers and that focus suppliers' efforts on creating superior value. When managers construct a customer value proposition, they often simply list all the benefits their offering might deliver. But the relative simplicity of this all-benefits approach may have a major drawback: benefit assertion. In other words, managers may claim advantages for features their customers don't care about in the least. Other suppliers try to answer the question, Why should our firm purchase your offering instead of your competitor's? But without a detailed understanding of the customer's requirements and preferences, suppliers can end up stressing points of difference that deliver relatively little value to the target customer. The pitfall with this approach is value presumption: assuming that any favorable points of difference must be valuable for the customer. Drawing on the best practices of a handful of suppliers in business markets, the authors advocate a resonating focus approach. Suppliers can provide simple, yet powerfully captivating, consumer value propositions by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer's business priorities.
Article
Can you summarize your company's strategy in 35 words or less? Would your colleagues express it the same way? Very few executives can honestly say yes to those simple questions. The thing is, companies with a clear, concise strategy statement - one that employees can easily internalize and use as a guiding light - often turn out to be industry stars. In this article, Harvard Business School's Collis and Rukstad provide a practical guide for crafting an effective strategy statement and include an in-depth example of how the St. Louis-based brokerage firm Edward Jones developed one that has generated success. Any strategy statement must begin with a definition of the objective, or the goal that the strategy is designed to achieve. Since most firms compete in a more or less unbounded landscape, it is also crucial to define the scope, or domain, of the business. Perhaps most important, companies need to have a clear sense of advantage - that is, the means by which the business will achieve its stated objective. Defining the objective, scope, and advantage requires trade-offs. If a firm pursues growth or size, profitability will take a backseat. If it chooses to serve institutional clients, it might ignore retail customers. If it derives its competitive advantage from scale economies, it will not be able to accommodate idiosyncratic customer needs. Before developing your strategy and crafting your statement, you'll want to carefully evaluate the industry landscape. This includes segmenting customers and identifying unique ways of delivering value to the ones the firm targets. It also calls for an analysis of competitors' current strategies and a prediction of how they might change. The key is to find the sweet spot where the firm's capabilities and customers' needs align in a way that competitors cannot match.
Article
This paper explores the role of the business model in capturing value from early stage technology. A successful business model creates a heuristic logic that connects technical potential with the realization of economic value. The business model unlocks latent value from a technology, but its logic constrains the subsequent search for new, alternative models for other technologies later on--an implicit cognitive dimension overlooked in most discourse on the topic. We explore the intellectual roots of the concept, offer a working definition and show how the Xerox Corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day. We then show the long shadow that this model cast upon Xerox's later management of selected spin-off companies from Xerox PARC. Xerox evaluated the technical potential of these spin-offs through its own business model, while those spin-offs that became successful did so through evolving business models that came to differ substantially from that of Xerox. The search and learning for an effective business model in failed ventures, by contrast, were quite limited. Copyright 2002, Oxford University Press.
A Reflective Review of Disruptive Innovation Theory
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Deconstructing the Value Proposition of an Innovation Exemplar Michael Treacy and Frederik Derk Wiersema. The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus
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Nieuwe app van Eneco speelt in op groei duurzame elektriciteit
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BMW i Ventures helps local transit app Moovit expand its global reach
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Fast, convenient, smart: The BMW i Wallbox Pro. The new home charging station for electric and plug-in hybrid vehicles
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