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Systematic literature review of business model innovation in business ecosystems
Abstract
In recent years, the concept of business models has gained popularity. This is especially the case since researchers can use the business model lens to investigate connections between single companies and their respective business ecosystems. However, the research on these connections is still fragmented and incomplete. In this article, we address this issue and report the results of a systematic literature review on the topics of business model innovation and business ecosystems. We performed a descriptive review of the subject and identified recurring themes in literature. Findings indicate that approaching business model innovation from a company-centric view might understate potentially far-reaching implications in business ecosystems. Subsequently, we contribute to the understanding of business model innovation in the context of business ecosystems.
... The information obtained from this preliminary investigation allowed us to narrow the focus of our investigation. Based on the collected preliminary data as well as the results of a thorough review of relevant literature (Rachinger et al., 2019), we developed a priori constructs that guided our subsequent further research (Eisenhardt, 1989). Specifically, our preliminary empirical investigation indicated that complementors who provide solutions for xEV charging are perceived as bottlenecks in the xEV innovation ecosystem (Adner and Kapoor, 2010;Adner and Kapoor, 2016). ...
The introduction of electric vehicles requires contributions from multiple industries and confronts the involved actors with unprecedented challenges. While research that has been conducted on business models and innovation ecosystems has gained attention, little research has been conducted on how actors can align business models to overcome bottlenecks and demonstrate a viable ecosystem value proposition. We address this issue by presenting evidence from a qualitative multiple case study in which a focus was placed on downstream-actors in the innovation ecosystem for electric vehicles. We highlight factors that motivate actors to establish a value proposition for electric vehicles, describing their similarities and differences in terms of how they cope with bottlenecks. Our results indicate that the issues of (1) electric charging infrastructure, (2) the availability of vehicles, and (3) customer value in terms of technological properties need to be addressed simultaneously to establish an attractive ecosystem value proposition.
Public-sector organizations have started to adopt new business models that enable them to deliver public service more effectively and innovatively. However, very few studies have been undertaken to describe and to generate lessons from the deployment of new business models in government. Through the case study research design, we examined how four government training institutes in the Philippines create, deliver, and capture value by utilizing Osterwalder and Pigneur's business model canvass. After undertaking a cross-case analysis, we generated the following insights: (a) the training institutes' programs and service orientation are influenced by their mother agencies' mandates or strategic directions; (b) resource constraints can be overcome through a business model that leverages off collaboration and partnerships; (c) the governance model of the training institute's mother agency influences its propensity to adopt practices consistent with new public management (NPM) principles; and (d) external support or intervention triggers change or innovation in the way a government training institute operates. Consistent with the spirit of NPM and drawing from the notable practices of the four cases we examined, we identified eight criteria that government agencies can use as a guide when rationalizing the establishment of their own training institutes. These criteria are: (1) market responsiveness, (2) innovation, (3) optimal resource use, (4) stakeholder interface, (5) access, (6) customer options, (7) efficiency, and (8) financial returns. Constraints and disincentives that get in the way of government training institutes' attempts to follow NPM principles can be addressed by setting up new training institutes under a flexible governance model.
Purpose
The purpose of this paper is to introduce a new business model logic, highlighting value processes in and properties of platform business models to inform business model thinking from a systemic and dynamic perspective. It challenges the idea of firms managing, influencing and controlling entire activity systems.
Design/methodology/approach
The study traces the evolution of different approaches to business models and assesses theories that explain value cocreation and systemic value capture to develop a new business model logic.
Findings
Business model thinking has evolved away from Porter’s value chain to a new logic based on open networks and platforms. This study develops a framework for understanding platform business models from a systemic perspective. Derived from service-dominant logic, this new business model logic responds to phenomena in contemporary business environments characterized by increasing connectivity and sociality among actors.
Research limitations/implications
The framework, developed from an extensive body of business model literature, has yet to be subjected to empirical investigation. Future research may involve the exploration of business model design processes and business model innovation from a systemic perspective.
Practical implications
Managers who aim to design their business models based on the logic of platform businesses require an understanding of their organization’s collaboration potential, technological interfaces and potential to leverage network relationships. This research guides start-ups and incumbents to evaluate their platform potential.
Originality/value
This study systematically emancipates the business model logic from a firm-centered, inside-out perspective, focuses on network relationships beyond the customer–firm dyad, explains value processes beyond organizational borders and rethinks value capture from a systemic perspective.
OVERVIEW:
Breakthrough innovation inside established companies—innovation that creates new revenue streams—often requires business model innovation in addition to innovation in product or offering. Unfortunately, new business models are rife with uncertainty. They may require new channels or new partnerships, appeal to new customer sets, rely on different revenue models, or require unfamiliar technologies. The risk associated with creating new business models is a major reason high-potential new businesses are not launched inside established companies. Well-designed business experiments are a valuable tool for reducing that risk. Although business experiments are not new, much of the literature concerning such experiments focuses on software and Internet businesses, where experiments are easier to conduct, and on startup companies rather than large corporations. This paper addresses the conduct of experiments in companies that produce physical goods and addresses the issues associated with conducting experiments within an established company. It describes methods used to design experiments, to focus them on critical issues, and to manage them in a corporate context.
Purpose
The study improves the current understanding of business model innovation by outlining how business models unfold over time within supplier–client relationships in facilities management (FM) services.
Design/methodology/approach
This study of FM services in Denmark consists of an explorative case study and three case studies of facilities management clients. Both phases, related and overlapping, involved collection and analysis of in-depth, semi-structured interviews and archive data.
Findings
Findings shows that business model innovation entails interorganisational collaboration across different phases of the innovation process. The research demonstrates that external orientation within FM service ecosystems involves both a reaction to changes in the external environment and the proactive involvement of stakeholders throughout business model innovation.
Research limitations/implications
The selection of business model innovation processes was limited to the Danish context. The sample, although heterogeneous and representative, represented only a fraction of the total population, which may have excluded processes of business model innovation that contradict the research.
Practical implications
This paper suggests that by observing the business models of the value network over time, organisations could learn from the interdependencies between intra- and interorganisational stakeholders, thereby supporting the monitoring of risks and uncertainties as well as the anticipation of potential consequences of changes in the ecosystem.
Originality/value
This paper introduces new thinking on the subject of business model innovation to the context of FM. It presents the external orientation of FM business models as a way to combine planned and emergent business model innovation through interorganisational collaboration and value creation in FM ecosystems.
To achieve sustainable development, focal firms should balance two paradoxical kinds of innovation activities: exploitative and exploratory ones. Published works found that ambidexterity is an effective way to resolve paradoxical tensions, but few in-depth studies have been conducted to explore the innovation paradox of focal firms in the innovation ecosystem from an ambidextrous capability perspective. This paper takes China Spacesat Co., Ltd. as the case to study focal firms’ management of innovation paradoxes in the sustainable innovation ecosystem and finds that: (1) Sustainable innovation is an ecosystem in which focal firms’ internal functional departments, including the product department, technical center, and Makers’ groups, cooperate with external organizations, including component suppliers, scientific research institutes, and government departments, closely and complementarily; (2) In the exploitative and exploratory innovations of complex products, focal firms in the sustainable innovation ecosystem mainly confront three paradoxes: profit drive vs. breakthroughs in the strategic intent of sustainable innovation of the profit-driven model, tight vs. loose coupling of sustainable innovation, and sustainable innovation driven by discipline vs. that by passion; (3) Focal firms in the innovation ecosystem resolve these three innovation paradoxes with structural, contextual, and coordinated ambidextrous capabilities, and build innovation paradox management mechanisms with three steps in sequence, namely by establishing dual sustainable strategic innovation units, strengthening sustainable organizational ties between the internal and external, while co-creating and sharing innovation values, and, finally, promoting the formation and development of their sustainable innovation ecosystem. This paper complements and enriches the innovation ecosystem and ambidextrous capability theory, providing significant practical guidance to the sustainable development of aerospace enterprises.
This study contributes to the growing literature of Sustainability Business Models (SBM) by introducing a new category coined as Associative Sustainability Business Models (ASBM). We theorize that this category encompasses firms with innovative business models that rely on partnership, association and collaboration to create value in the triple bottom line and address pressing sustainability challenges. Following an inductive research approach, we analyze four case studies of ASBM ventures in the chocolate industry. Our findings reveal the emergence of two key theoretical constructs (firm location and claimant identity) that help to identify differences across ASBM designs and lead to four different subcategories of ASBM. In addition, drawing on the literature of Sustainable Business Models, we develop theoretical propositions that link our four subcategories of ASBM to the business case for sustainability. Therefore, we extend the literature on SBM by providing new insights on how business model innovations based on strong association and collaboration can generate solutions to social and environmental challenges.
Manufacturing companies that adopt the servitization strategy usually show lack of knowledge regarding the service offering associated to their manufactured products. Acquiring external knowledge from service suppliers can be a way to tackle this problem. The objective of this study is to understand how manufacturing companies aiming at a servitization-driven business model innovation (BMI) integrate such knowledge from service suppliers. We focus on different types of collaboration that can occur and on the knowledge sharing (KS) dynamics of this collaboration. We employ a multiple-case study approach to analyze nine BMI processes from companies that transformed their traditional business model (BM) to a servitized BM. As a result, we obtain a theoretical framework that presents six possible KS dynamics for the servitization design by originally combining two main approaches for servitization-driven BMI (i.e. product-oriented and service-oriented product-service systems) and three main configurations of relationships with service suppliers based on traditional new product development classifications of buyer-supplier integration (i.e. white, grey and black box configurations). Implications of combining a BMI and a buyer-supplier KS perspectives to investigate the process of servitization for manufacturing companies are then discussed.
Entrepreneurial ecosystems command increasing attention from policy-makers, academics, and practitioners, yet the phenomenon itself remains under-theorized. Specifically, the conceptual similarities and differences of entrepreneurial ecosystems relative to, e.g., clusters, ‘knowledge clusters’, regional systems of innovation, and ‘innovative milieus’ remain unclear. Drawing on research on industrial districts and agglomerations, clusters, and systems of innovation, we suggest that entrepreneurial ecosystems differ from traditional clusters by their emphasis on the exploitation of digital affordances; by their organization around entrepreneurial opportunity discovery and pursuit; by their emphasis on business model innovation; by voluntary horizontal knowledge spillovers; and by cluster-external locus of entrepreneurial opportunities. We highlight how these distinctive characteristics set entrepreneurial ecosystems apart from other cluster types, propose a structural model of entrepreneurial ecosystems, summarize the papers in this special issue, and suggest promising avenues for future research.
Purpose
The purpose of this paper is to address the following question: how managerial ties impact firm business model innovation (BMI) in the context of transition economies.
Design/methodology/approach
The authors present a conceptual model that links managerial ties, organizational learning (explorative and exploitative learning), opportunity recognition and BMI together.
Findings
This study finds that managerial ties take effect through two paths: one direct path and one indirect path. First, managerial ties can impact BMI directly through exploitative and explorative learning. Second, managerial ties can impact BMI indirectly through explorative learning and opportunity recognition.
Practical implications
First, firm managers from transition economies should learn to reinvent their business models by taking full advantage of managerial ties. Second, firm managers should take appropriate actions to transfer managerial ties into BMI.
Originality/value
This study contributes to existing literature in two major ways. First, this study enriches literature on the antecedents to BMI from a social network perspective. Second, this study opens the “black box” between managerial ties and BMI in the context of transition economies.
With an increasing population, a growing middle class and increased resource use, our current ways of living and doing business are unsustainable. Next to the implementation of innovative technology, sustainable development based on innovative business models, better understating of customer needs and behavioural change are crucial. This research aims at combining principles from both sustainable business model innovation and user-driven innovation to develop more successful, radical and user-centred sustainable value propositions. Sustainable business model innovation entails developing value propositions that create value for multiple stakeholders at the same time, including customers, shareholders, suppliers and partners as well as the environment and society. User-driven innovation allows developing solutions that are meaningful for people and profitable for business by involving potential customers, users and/or other stakeholders in an experimental and iterative design process. The study adopts a research through design methodology, a qualitative research approach that uses design practice to inform research. To this end, a design project in the framework of the Climate-KIC (the largest European partnership addressing the challenge of climate change) was investigated. As a result, this paper proposes a process for sustainable value proposition design which adopts a thorough, dynamic and iterative perspective (talking to stakeholders, thinking about the problem, testing the product/service) that leads to an actual sustainable value proposition and to a superior problem-solution fit. In practice, managers are provided with an initial methodological framework for mapping and understanding the stakeholders in a broad sense (including and especially users), identifying their needs and interests, and progressively combining them into a more meaningful and enriching value proposition.
Business model innovation has seen a recent surge in academic research and business practice. Changes to business models are recognised as a fundamental approach to realise innovations for sustainability. However little is known about the successful adoption of sustainable business models (SBMs). The purpose of this paper is to develop a unified theoretical perspective for understanding business model innovations that lead to better organizational economic, environmental and social performance. The paper examines bodies of literature on business model innovation, sustainability innovation, networks theory, stakeholder theory and product-service systems. We develop five propositions that support the creation of SBMs in a unified perspective which lays a foundation to support organizations to investigate and experiment with alternative new business models. This article contributes to the emerging field of SBMs, which embed economic, environmental and social flows of value that are created, delivered and captured in a value network. It highlights gaps for addressing the challenges of business model innovation for sustainability and suggests avenues for future research.
As the value chain in most industries experienced reconfiguration, firms needed to collaborate and actively engage in a particular strategic network to sustain their business through collaborative innovation, which often resulted in a new business model. The objective of business model innovation is to create and deliver more value to consumers while capturing value for the members of the network. Different characteristics of a strategic network impact the value as the output of business model innovation. However, there has been little research on this different strategic network in relation to business model innovation. This paper aims to figure out the differences of business model innovation in three types of strategic networks: vertical value nets, horizontal value nets, and multidimensional value nets. This research describes how network members innovate business models to enhance value. A cross-case analysis and strategic recommendations are also provided. JEL Classifications: O3, M1
The food sector has traditionally been considered one with the lowest research and development expenditure to value added ratio. In recent decades, however, the business environment has become more demanding in terms of technological inputs for reasons related to food safety, quality and also the globalisation of the food market. This provides a strong incentive to innovate, especially for small and medium-sized enterprises (SME) seeking to remain in business.Most businesses operating in the food sector belong to the SME category which, based on the literature, tends to have a low level of research capacity.This study seeks to identify determinants of the types of innovation adopted and associations between them by analysing a sample of European food SMEs. For this purpose a non-parametric analysis, namely the classification tree technique, is carried out. The main finding is that due to the technological factors inherent in the food industry, a tight linkage exists between product, process and market innovation. Moreover, the study shows that collaboration between competitors encourages SMEs to engage in market, process and business model innovation. Conversely, synergy with suppliers and customers supports product innovation.
This paper examines the role of innovative business models in the transformation of socio-technical systems. Focusing on decentralised energy technologies, we explore business model innovation in the context of a transition towards a more sustainable energy system. We conduct an empirical study of two Energy Services Company (ESCo) models for the deployment of combined heat and power with district heating (CHP/DH) infrastructure in the UK. Based on these case studies we illustrate the different ways in which Local Authorities develop business models to create and capture value from more efficient resource use and to deploy sustainable technologies. Drawing from systems theories in the business model and socio-technical literatures, we analyse the interfaces between business models, energy infrastructure and institutions. We propose that a systems based approach to the analysis of business models as embedded in their socio-technical contexts can offer new insights into the dynamics and governance of sustainability transitions.
The universal market adoption of electric vehicles (EVs) is still impeded by the high cost of batteries. Repurposing EV batteries in secondary applications could recoup a portion of that initial cost and reduce upfront EV costs. Further, when integrated in energy storage systems for renewables, second-life batteries could clean the electricity mix for EV charging and alleviate environmental concerns over battery disposal. This paper presents business models of different EV stakeholders that facilitate battery reuse. Based on interviews with various stakeholders, as well as industry reports and academic literature, we analyze the deciding factors for battery “post-vehicle” applications and their potential impacts on EV business models. The findings emphasize the importance of battery ownership, inter-industry partnerships, and policy support. In this early stage, government support constitutes the most important trigger for battery reuse. The results also suggest the potential of battery reuse as a catalyst for EV business model reconfiguration.
There is increasing interest in the actions entrepreneurs undertake to shape the organizational identity of new ventures. While studies emphasize the need to focus on the distinctiveness of organizational identity to acquire resources for new ventures, less is known about specific identity-shaping actions or their consequences in the context of new ventures engaged in innovation. Based on a study of four new ventures involved in business model innovation, we theorize about the types of action innovating new ventures undertake to build their organizational identities and the consequences of these actions in terms of identity evaluation by external audiences. Four identity-building actions are identified and discussed: storytelling, use of analogies, procuring social evaluations and establishing alliances. This paper’s main contribution is to show how innovating ventures attempt to reach optimal distinctiveness by developing unique organizational identities embedded in existing market categories, with insights for the literatures on organizational identity and entrepreneurship.
The rapid growth of urban population implies challenges in city domain from natural resource and infrastructure capacity as the hard aspects to social segregation as the soft aspect. This evolution requires real reflection and actions to attain sustainable development and a better quality of life in the city. The concept of smart city emerges as a strategic innovation to limit the issues arisen by the growth of the urban population and meet urban challenges. Smart city as a multi-stakeholder ecosystem upholds the value co-creation process of related actors within a framework to provide and deliver the expected service. Unlike the analogue era, ICT as the new technology enabler in smart city creates a transition of collaboration form among stakeholders. This paper presents an academic development of multi-stakeholder co-creation analysis in smart city management based on the perspective of service science. The analysis proposes a representative model of stakeholders with the designated values, service flow, and expected final result from the conceptual service platform. The model aims to depict in depth contribution of stakeholders which also leads to an innovation of service platform creation. This approach is carried out within the experience obtained from Bandung as one of the running smart city project in Indonesia. Bandung, which just occupies the integrated stage of the smart city maturity stages, does not allow the harmony of value co-creation. The one-way web-based integration resulted in the limited value creation for the society. This model enables a conceptual direction of becoming a two-ways interaction and creates a more convenient co-creation service ecosystem platform among stakeholders in term of innovation.
This article aims to reveal main theoretical and methodological issues related to the specificity of the strategic innovation-oriented interaction of large and small business structures of the agrarian sector. As part of the presentation of this paper, the authors have obtained the following main conclusions Secure and sustainable development of national economies and the international community as a whole is not possible without a constant evolution of the agro-industrial sector, which plays a key role in the formation of an adequate level of food security; effectiveness of development of the agrarian sector can be enhanced through the use of innovative solutions, both in terms of agricultural production, and in terms of interaction of large industrial enterprises and small entrepreneurship with each other; interaction of large industrial enterprises and small entrepreneurship of the agrarian sector is strategically-oriented solutions, aimed at meeting the interests and needs of the cooperating subjects, as well as maximizing economic and other benefits in proportion to a contribution of each partner; improving the innovative strategy of interaction of large industrial enterprises and small entrepreneurship in the agrarian sphere should include two directions: ongoing collaboration (meeting functioning needs) and strategic partnerships (meeting development needs).
Conceptualizing firms from a business ecosystem, value‐ or supply‐network perspective captures the boundary‐spanning nature of value creation. However, the relationship dynamics that enable or inhibit sustainable value creation, as well as the understanding of how to resolve trade‐offs in sustainable supply chain management, need to be better understood. To explore these, we present a comparative case study of how situational logics and power relations are embedded in business models within a UK brewer and its malt supply chain. The exploratory case illustrates how network‐centric business model innovation resolves the trade‐off between economic and environmental value through the prioritization of sustainability‐related ‘cultural’ resources. These findings suggest that organizations seeking to implement sustainable supply networks need to pay greater attention to how they use business model innovation to institutionalize situational logics that enable or inhibit sustainable value creation and resolve trade‐offs.
This paper explores the relationships that exist between business models and ecosystems evolving in the 3D printing industry using qualitative evidence drawn from three countries: China, UK and USA. In particular, this research proposes that it is important to understand the process of business model dynamics and formulation and how the associated ecosystem evolves alongside this process to support its development. In studying the dynamics of business models in the 3D printing sector, this research identifies a three-stage process, ‘initiation’, ‘execution’ and ‘extension’, and suggests three capabilities that enable the development of the model, namely, ‘scalability’, ‘flexibility’ and ‘extensibility’. In addition, it is suggested that the structure of the business ecosystem (product based, platform based, or some combination) influences the potential impact that these capabilities can have on business model development. These findings have implications for those organisations seeking to develop business models and ecosystems around emerging technologies, for practitioners involved in the development and extension of business models, and for academics seeking to evaluate policy and practice within this field.
Despite the widely reported benefits of zero carbon buildings (ZCBs), the actual uptake of the ZCB approach is low in market. Building firms need to innovate their business models (BMs) to overcome market barriers. However, there is scarce research into business strategies for ZCBs. This paper aims to develop a typology of BM innovations for delivering ZCBs from the perspective of developers and clients. This typology reflects the common features of BM innovations and can be used to help assess the performance of innovative BMs. The research was conducted through theoretical analysis of BM innovation and exploratory case studies of five real-life ZCB projects selected from Australia, Japan, Hong Kong, Singapore and the UK. The eight components of BMs at ZCB project level were found to be distinct from, or largely to extend, those at organizational level. The developed typology integrates three theoretical dimensions: value offering and associated project process, stakeholder network, and institutional boundary. The findings should help characterize and evaluate business solutions for delivering ZCB projects successfully.
Drivers like competitive pressure and technological change push organisations to innovate their business model (BM). However, this complex form of innovation not only offers many chances but also involves several risks. Value creation in complex and dynamic value networks with a multitude of different actors leads to a higher level of uncertainty and a larger number of risks. To build profitable and sustainable BMs, the relevant risk factors need to be identified, analysed, and managed. By applying and adapting the value network analysis (VNA), this work creates a methodology for identifying BM risk factors within the value network of a BM and unveils a set of general BM risk factors within the value network. Results are based on a detailed literature review and the use of the Action Design Research (ADR).
Recently, there have been significant changes in many industries triggered by the development of new Internet-based technology. New business models have been invented in response to the changes and to keep up with competition, for the most part forcing companies to conduct partnerships or collaborations with different actors in order to fulfill the business’s offering. A partnership with more than two actors then triggers the formation of a strategic network. The aim of this research is to understand the management of the actor’s network, the business model and the business model innovation dimension in the multidimensional value network (MDVNs) in search of increased value outcome. A case study of three MDVNs from different industries is carried out to explain the constellation of the relationship between dimensions and its outcome in value. The findings indicate the two-way relationship between the actor’s network, business model and business model innovation dimensions. The general relationship of the three dimensions then results in a contextualized relationship on multidimensional value nets as the case. The model then becomes a helpful tool for effective business model innovation in the network. Firms are now examining new roles in the industry and the partnership opportunities which then become the basis of the strategic nets formation. As for the managerial implication, the model could facilitate the analysis actor’s network dimensions, business model and activity of business model innovation which bears the different characteristics of each network. It is also possible for the model to evaluate the network effectiveness towards the business model innovation based on value as the outcome.
Being able to innovate one’s business model has been a topic of paramount importance in media management research and practice. Recent studies suggest that the strategic orientation of a company is a central driver of business model innovation. However, empirical evidence is scarce. To fill this gap, we assess the impact of entrepreneurial and alliance orientation as two highly relevant strategic orientations with a quantitative survey of 50 companies. Our results show that a media company’s entrepreneurial orientation has positive effects on its ability to innovate value creation and value proposition, but not on its ability to capture that value. In addition, we could not find significant results indicating that being alliance oriented is beneficial for business model innovation.
Purpose
The research aims to clarify and give insights on the importance of entrepreneurial orientation for sustained mobility through the four business models which are currently operational in different regions of the world for supporting the commercialization drive of electric vehicles (EVs).
Design/methodology/approach
By drawing on extant literature, the author develops systematic business frameworks undergirded by the triad of entrepreneurial orientation (innovation, risk-taking and proactiveness) depicting enablers of value creation, capturing and adoption barriers related to EVs. These multidimensional frameworks are then used to analyse the selected business models for their strengths and weaknesses.
Findings
The findings of the research underlined the importance of adopting entrepreneurial orientation, conceiving flexible business model, forging inter-industry partnerships and leveraging on shared resources as prime requirements for achieving success in EV segment.
Research limitations/implications
This study underlines the importance of entrepreneurial orientation and has the recommendations for the entrepreneurs, the EV companies and the policymakers.
Originality/value
This study fulfils the identified need of developing entrepreneurial orientation and sound business models for EVs.
The Circular Economy (CE) gained significant traction in business and academia. While in the building sector issues around energy efficiency are being widely explored, CE is still a relatively new topic. This article reports on three CE pilots in the Dutch building sector and develops a collaboration tool for developing and operating circular buildings and their supply chain collaborations. First, a conceptual framework is developed to study supply chain collaboration in circular buildings, which uses theoretical building blocks for visions, actor learning, network dynamics and business model innovation. Second, a case study is presented where the framework is applied to three cases using semi-structured interviews and document analysis. Third, an empirically-based tool is developed to enhance collaboration for CE in the building sector. The cases include a newly built project, a renovation project and a demolition project. It was found that developing circular buildings requires (i) a new process design where a variety of disciplines in the supply chain is integrated upfront, (ii) the co-creation of an ambitious vision, (iii) extension of responsibilities to actors along the entire building supply chain, and (iv) new business and ownership models.
While rethinking their business model (BM), incumbents increasingly rely on alliance partners to provide additional resources. The resulting business model innovation alliance (BMIA) focusses on the joint commercialisation of the alliance results via a shared BM. Our findings from an in-depth case study show differences between BMIAs and more common types of alliances, such as development alliances, regarding three dimensions: dynamic, relational and architectural. On this basis, we developed an integrative framework, by combining our results, with Amit and Zott’s BM design framework that enables firms to open up their BM in order to exploit the full potential of BMIAs for BMI. In addition, we contribute to extant literature on BMI by introducing BMIAs as a means to BMI in established firms. Furthermore, we close the gap between open innovation and BMI literature by illustrating how to open up the BM in order to tackle the challenges arising from BMIAs.
Business model innovation is increasingly seen as a means to promote sustainable forms of production and consumption, having been linked to technological innovations in electric vehicles and the circular economy. Business models are an organisational phenomenon that concern focal firms and their networks. However, there is no theory of the firm in transition theory, such that the role of business model innovation in wider transformative processes is unclear. This paper aims to redress this issue by combining a business model perspective with core concepts and constructs from transition theory. We elucidate sources of change and inertia that issue from new and existing business models, illustrating our arguments by focusing on mobility services, which have the potential to radically transform road transportation via new business models. We derive new lines of inquiry that can be used to examine the dynamics of business model innovation in the context of sustainability transitions.
Purpose
The purpose of this paper is to advance the theoretical development of the content marketing concept and its integration into high-tech marketing theory, in entrepreneurial contexts and from a business model innovation perspective.
Design/methodology/approach
The paper provides a conceptual overview of content marketing and business model innovation concerning high-tech entrepreneurs.
Findings
The high-tech entrepreneurial content marketing (HIT-ECM) framework has five delineating elements with a small high-tech firm as the focal point: adapting content marketing in the business model, customizing content and customer profiling, organizational learning and experimenting with the business model, building strategic networks and content marketing and the small high-tech firm’s business model innovation. The HIT-ECM framework considers how high-tech entrepreneurs capitalize on their capabilities and use innovative marketing strategies to sell their high-tech solutions under unpredictable conditions and limited resources.
Practical implications
From a managerial perspective, HIT-ECM poses five questions managers should ask themselves when they adopt content marketing and integrate it into their existing business models: how can content create value, how novel content development activities reflect on innovating the business model, how will content development reflect on the business model structure, who is involved and what are the revenue streams of content development.
Originality/value
This is an original paper that presents the HIT-ECM framework for high-tech entrepreneurs to use content marketing and capture customer value through every aspect of their business operations, as well as updating and innovating their business models.
Despite a voluminous literature, business model research continues to be plagued with problems. Those problems hinder theory development and make it difficult for managers to use research findings in their decision-making. In our article, we seek to make three contributions. First, we clarify the theoretical foundations of the business model concept and relate them to the five elements of a business model: customers, value propositions, product/service offerings, value creation mechanisms, and value appropriation mechanisms. A clear definition of a business model enables theory to develop systematically and provides coherent guidance to managers. Second, we suggest that value configuration is a contingency variable that should be included in future theorizing and model building. Each of the elements of a business model is affected by a firm's value configuration depending on whether the firm is a value chain, value shop, or value network. Third, we link business models to organization design. We show how organization design is affected by value configuration and how new collaborative organizational forms enable open and agile business models. We derive the implications of our analysis for future research and management practice.
Taiwan's networking communication industry has had a clustering scale and a good position for collaboration in the global networking communication manufacturing network. This study considers whether Taiwan's networking communication industry can enhance its competitive advantage through supply chain management activities. In order to examine the relationships of supply chain collaboration value innovation, supply chain capability and competitive advantage, this research selects 74 firms and 465 questionnaires from the upstream, middle and downstream manufactures of Taiwan networking communication industry for research subjects, and uses structural equation modeling (SEM) to verify the theoretical model. Results show that the relationships among supply chain collaboration value innovation, supply chain capacity and competitive advantage can have a positive impact, and that supply chain capability is a full mediator. Moreover, supply chain echelons (upper, middle and downstream) have some moderating effects in these relationships.
Purpose
This paper aims to analyze how a real estate business model innovation developed in a real estate network, with a special focus on the relationship between ego network structure and the innovative development of the business model.
Design/methodology/approach
The paper is a single case study of a Swedish real estate network of 38 actors. The data were collected at the individual actor level using multiple sources: 12 semi-structured in-depth interviews, 94 min of meetings and 28 written contracts. The empirical findings resulted in four propositions.
Findings
This study demonstrates that it was primarily the building user who was behind the innovative development of the real estate business model innovation, whereas the real estate company acted as a network hub and network resource coordinator. The ego network structures significantly affected the outcome.
Practical implications
Real estate companies should act as hubs, coordinating all the network actor resources the building user needs in the value-creation process. To be effective hubs, the representatives of real estate companies must create extensive personal and open ego networks to acquire central network positions.
Originality/value
Few studies examine business model innovation, particularly in the real estate context. Though large real estate businesses usually operate in the networks of various actors, analyses based on the network perspective are also lacking. This case study builds a valuable understanding of how network processes in real estate networks can be used as tools to foster real estate business model innovation, which in turn can lead to more competitive real estate companies and building users.
Although there is a rich body of empirical research that uses specific service offerings (e.g. product-related and customer-related services) as proxies for the extent of servitization, the results are inconsistent. We investigate service transitions from an innovation management and resource-based perspective, assessing the service transition stages through the service offering type, service innovativeness and the extent of invested internal and external resources. We use a qualitative approach based on interviews of managers from 19 energy utilities in Germany and complementary longitudinal secondary data. We identify three service transition stages: 1) service initiation, 2) service anchoring and (3) service extension. The findings indicate that firms concurrently experiment with different service offerings and that their services' innovativeness steadily increases during service transition. We contribute to servitization research by identifying barriers in each of the service transition stages that prevent product-centric firms from achieving a higher service transition stage. While in the service initiation stage, firms may face strategy-related barriers, these are often followed by implementation-related barriers in the service anchoring stage and market-related barriers in the service extension stage. To overcome strategy-related barriers, our results indicate that firms should balance their product-oriented and service-oriented business model and can benefit from developing a clear strategic intent with relevant service offerings. We further find that implementation-related barriers can be overcome by establishing a service-specific innovation process. To overcome market-related barriers, the findings indicate that firms should integrate customers and external partners in the service innovation ecosystem
Focusing on strategic agility and business model concepts, the present paper proposes a framework for recognising common strategies, activities and paths to business model reconfiguration developed through the activation of a set of micro-capabilities. We argue that successful companies nurture specific capabilities in order to act proactively and to reach strategic agility and direct these to specific key elements of the business model (building blocks), thus enabling the renewing of the entire business model.
Strategic innovation networks, formed to stimulate innovation performance and economic growth for members and regions via collaborative activities, have recently become increasingly common. Numerous researchers have noted the effect of network structure on innovation performance and also discussed the mediating role of commitment. Many studies suggest that commitment strongly mediates firm and network outcome and performance. Studies of organizational behavior, relationship marketing, and human resources demonstrate that commitment leads to better firm performance, inter-firm cooperation, network performance, market knowledge transfer, knowledge sharing, future intentions, retention, and enforcement mechanisms. Strangely, studies of the relationship between commitment and innovation from a network perspective are lacking. This study investigates the relationships between commitment, its antecedents, and innovation performance in strategic innovation networks. The antecedents examined are expectation gap, shared values, ego network density, and ego network size. A questionnaire was emailed to all members of three Swedish strategic innovation networks in different industries and regions to collect data; 150 completed questionnaires were received for a 27% response rate. Multiple regression, path, and mediation analyses demonstrate that commitment is an important mediating variable when firms in strategic networks jointly develop innovations. Expectation gap and shared values are strongly related to commitment but ego network density and ego network size are not; however, the last two variables directly affect innovation. This means that relational influence is more important for commitment than are structural effects, while structural effects are more significant for innovation.
As government officials, policymakers, and the general public increasingly express their concern about global warming caused by greenhouse gas emissions, scientists search for alternative sources of vehicle fuel and electric power. One sustainable energy source that shows considerable promise is biogas produced from organic waste. For various reasons, biogas plants in Sweden struggle with profitability. This is especially true for agricultural biogas plants. Suggestions on how to deal with this problem include the use of business model innovation (BMI) to develop agricultural networks and to implement new strategies for arranging, producing, and marketing farm-produced biogas. This qualitative study, influenced by grounded theory, identifies and examines the success factors in an agricultural network in which biogas is produced at four farms in Sweden with distribution by pipeline to a refinery for purification and conversion to vehicle fuel. Fourteen interviews were conducted with various individuals in this network: farmers, a local politician, municipal employees, and external consultants. Of the six success factors identified in the network for farm-produced biogas, the long-term perspective on profitability was found most important. The six factors were used to create a conceptual business model framework for such networks that adds new value propositions while retaining the original value propositions. We propose that long-term government subsidies and other incentives can make farm-produced biogas profitable, not only in social and environmental terms but also in economic terms. Our main conclusion is that BMI can be used to create public-private networks that invest in farm-based biogas production. Such investments can stimulate rural development and provide new business possibilities for SMEs in the agricultural sector. This study also shows that BMI that takes a long-term perspective can result in high-value environmental and social benefits as well as financial profitability.
Servitization is recognized as an opportunity for manufacturing firms to harvest additional value by accessing new sources of revenue and expanding their reach up and down the value chain. It is a network activity, as it involves not just the servitizing firm but actors across the firm’s ecosystem. Most studies argue that servitization creates value for all network actors. However, service innovation activities may also result in the
firm appropriating value from other actors, creating tensions in the network. Those tensions can undermine servitization efforts and destroy value for all participants. To avoid this outcome, firms must anticipate and defuse or manage tensions to create cooperative relationships with value chain partners. Through a series of semi-structured interviews with key actors at servitizing firms and their customers and intermediaries, we identified specific types and sources of tensions in the servitization process and explored how they might be mitigated or managed.
Innovation management falls short in solving urgent societal problems, if it neglects the power of networks and the values of their constituent actors. Even though network and business model innovation have been acknowledged as innovation categories in their own right, their problem-solving potential remains unexplored. In this article, we argue that purposeful innovation requires considering the shared values of those engaging in innovation processes, where values are understood as subjective notions of the desirable. Values-based innovation can motivate the development of new networks and business models that address complex societal problems, such as the unsustainability of current forms of energy supply. We present a theoretical framework and facilitation methods for values-based network and business model innovation. Both have been applied in an exemplary workshop on regional energy networks in Germany. Reflecting upon the lessons learned from theory and practice, we conclude that crucial starting points for systemic sustainability innovations can be found in values-based networks and business models.
For a variety of reasons, strategic innovation in a microfirm's business model can be particularly challenging. One French company that specializes in the distribution of legal announcements and local economic news managed to use IT to not only reinvent its business model but also transform the rules of competition in its sector. Its experiences highlight the particular difficulties that small firms encounter when introducing new technology and the importance of training and creative alliances to ease both internal and external resistance to change.
This study conceptualizes service infusion as a business model reconfiguration by using a process perspective. Service infusion is therefore understood as a process affecting the business model dimensions of transaction content, structure, and governance. The service-related reconfiguration of the business model is explained by underlying knowledge conversion mechanisms, which provide insights into the development of reconfiguration capacities as important enablers for business model change. Furthermore, this study introduces the concept of service defusion as an important counterpart to service infusion. Both concepts together are found to fully capture firms' strategic options with respect to their service offering components (transaction content), their engagement with, and disengagement from, important business partners (transaction structure), and also their interactions with these important business partners (transaction governance). The conceptually derived understanding of the service infusion process and mechanisms are exemplified via a multi-actor longitudinal illustrative case study. A conceptual grounding for understanding service infusion processes for further theory and concept development is provided, and managers gain an understanding of how to effectively manage the processes underlying service-related business model reconfigurations.
Business model innovation receives great attention from managers. Alliances can stimulate firm’s value creation of BMI but set challenges for its value appropriation. The current study’s analysis by fuzzy set Qualitative Comparative Analysis of 580 alliances highlights architectural BMI for highly successful configurations of value appropriation. Configurations differ primarily according the firms’ supply chain role, its choice of partners, its safeguards of equity participation, and the direction of the alliance. The findings reveal two successful configurations in which the original equipment manufacturers (OEM) use equity participation and one successful configuration where suppliers do not use equity participation to safeguard own claims in horizontal alliances.
Zero carbon building (ZCB) has emerged as an innovative approach to improving building energy performance and reducing building carbon emissions. Previous studies have devoted to analyzing the technical feasibility and design issues of ZCB, and examining barriers to adopt ZCB in market, social, regulatory and financial aspects. However, few have explored the role of business models in the delivery of ZCBs, which may explain the slow uptake of the ZCB approach. The aim of this paper is thus to examine the effect of business model on ZCB, and explore how business model innovation can help to deliver ZCBs. The paper first reviews the concept of ZCB and identifies the challenges to ZCB based on the political, economic, social, technological, environmental and legal analytical framework. The paper then investigates the conceptual framework of business models for ZCB. Eight key elements of business model are identified, which include product/service, value proposition, target customer, organization and activities, role in value network, resource and core competency, competitive advantage, cost and revenue model. Theoretical bases of business model innovation are examined in order to establish a process-based framework of business model innovation. Evidence was collected to substantiate the arguments through case study with one recent ZCB project. The results reveal innovations in three interrelated components of business model, namely, value offering, value creation and delivery, and value capture, and demonstrate how value from ZCB can be created and captured through these components. The findings help to demonstrate how business model innovation helps to deliver ZCBs.
A research group has developed a new, innovation typology that accounts for the additional factors affecting business-model innovation of large firms. The model has two dimensions that includes technology and value network. A new business model often requires a new value network, which in turn may require a new relationship that has the potential to disrupt existing ones. The research identified several issues that need to be addressed by companies while pursuing business-model innovation such as innovation management, financial management, and organizational complexity. Paradoxical leadership is an important cause of failure in all of the unsuccessful cases and did not occur in the successful ones. A partnership with a company that has experience in the target value network can provide invaluable understanding of the network and easier access. Companies should understand customer needs by doing extensive ethnographic studies that is required for a successful business model.
New technology is breeding a generation of so-called multirouters that consolidate multiple physical routers into a single platform. With this technology, significant savings in both capital and operational expenses are obtained. Moreover, multirouter technology opens the door for disruptive business models that enable carriers to cost-effectively lease the routers on the platform as a profitable service to other providers and enterprises seeking to expand their networks.
Prior research shows that innovation performance is linked to system, collaboration and networking. There is a growing attention for open innovation. However, the interplay between regional systems of innovation, technology clustering, disruptive business models and open innovation practices is not sufficiently addressed in the global entrepreneurship and technology innovation literature. There is an absence of studies that look at strategic partnerships–and specifically the role of open innovation–in the development of regional technology clusters and novel business models. We observe that biotechnological firms have been engaged in open innovation for a long time by clustering and intensive partnering to innovate with knowledge from inside and outside the firms. In other words, they have been engaging in open innovation. This paper presents a case study of biotechnology clusters in Belgium and Germany. The focus is on the interplay between new biotechnology firms, strategic alliances and open innovation, within a regional system of innovation context. In particular, the article looks at the case-based evidence from biotechnology-related industrial or regional economic cluster policies. © 2016, © 2016 Journal of the Canadian Council for Small Business and Entrepreneurship/Council de la PME et de l'entrepreneuriat.
This paper examines how the level of dominance in firms affects when they engage in coopetition in order to innovate their business model. We present a longitudinal and in-depth single case study of the business model innovation decisions of investment banks in the US corporate bond trading market. We find that, in network markets, when firms choose to engage in coopetition in light of competitive threat it is done so in order to adopt a defensive or offensive strategy. The study shows that in network markets the less dominant firms tend to engage in coopetition to innovate their business model in an evolutionary manner before the dominant firms, as a defensive strategy to protect their existing business model. In contrast, the dominant firms tend to engage in coopetition to innovate their business model in a revolutionary manner after the less dominant firms, as an offensive strategy to alter radically their existing business model. We draw implications of coopetition in network markets for both theory and practice.