The Process of Business Model Innovation : An Empirical Exploration

282 Pages·2016·3.74 MB·English

by  Georg Stampfl (auth.)

The Process of Business Model Innovation
Georg Stampfl
The Process of Business
Model Innovation
An Empirical Exploration
Georg Stampfl
Vienna, Austria
Dissertation University of Innsbruck, Austria, 2014
OnlinePlus material to this book can be available on
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ISBN 978-3-658-11265-3 ISBN 978-3-658-11266-0 (eBook)
DOI 10.1007/978-3-658-11266-0
Library of Congress Control Number: 2015949401
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Acknowledgements
After reaching the end of this exciting, inspiring, and unforgettable journey that was only
possible because I am surrounded by wonderful people accompanying me along the way, I
would like to take the opportunity to express my sincerest gratitude
(cid:16) to my academic advisors Prof. Dr. Kurt Matzler and Prof. Dr. Reinhard Prügl for the time
you spent with me to discuss, frame, and shape this research project as well as for the
guidance and continuous encouragement throughout the last years,
(cid:16) to my fellow PhD colleagues for the feedback and inspiration you gave me, for the fun time
we had together, and for your hospitality and friendship,
(cid:16) to my family and to the woman I love for the ongoing support, for giving me the opportunity
and freedom to pursue my dreams, for the faith in me, and for the love you give me.
Thank you!
Georg Stampfl
Abstract
Innovation pressure has been rising constantly over the last decades. Many companies try to
master this challenge by aiming at the development of innovative products and services. In
times of fast changing business environments, this is to an increasing extent not sufficient to
maintain competitiveness. Research and managerial practice have acknowledged that in the
years ahead, business model innovation will become as important as product or process
innovation. A company’s long-term success is increasingly determined by the ability to re-
configure the existing or to develop completely new business models. However, so far very
little is known why and especially how established organizations successfully innovate the
business model.
The main objective of this work is therefore to empirically explore the nature of business model
innovation processes in incumbent firms on the organizational as well as the individual level.
Two retrospective in-depth case studies of business model innovation processes undertaken by
established companies serve as the basis to study in detail when and why the process of business
model innovation is started, how the process of business model innovation unfolds, and what
contributes to or inhibits success. Furthermore, nine longitudinal case studies of business model
design projects provide rich data to “dig deeper” and investigate how people collaborate in
order to develop new business models, how the search and discovery processes pertaining to
the design of new business models unfold, and what the individual perceptions regarding
business model innovation projects are.
By linking the findings from the empirical research with prior literature, a model of business
model innovation processes at the organizational level and a model for business model design
processes at the individual level are developed. To put business model innovation processes in
context, the business model environment framework is conceptualized as a new perspective.
The theoretical implications of this work advance academic research in the field and allow to
provide guidelines to managerial practice for successful business model innovation in
incumbent firms.
Table of Contents

Acknowledgements ...................................................................................................................V
Abstract ..................................................................................................................................V I I
List of Figures ........................................................................................................................ XV
List of Tables ...................................................................................................................... XVII
List of Abbreviations ........................................................................................................... XIX
1 Introduction ...................................................................................................................... 1
1.1 Background and Research Context .................................................................................... 2
1.2 Research Objective and Research Question ...................................................................... 3
1.3 Structure of Dissertation .................................................................................................... 6
2 State of Research .............................................................................................................. 9
2.1 Introduction ........................................................................................................................ 9
2.2 Innovation in General ........................................................................................................ 9
2.2.1 Definitions of Innovation ....................................................................................... 9
2.2.2 Types of Innovation .............................................................................................. 11
2.3 Innovation Processes ....................................................................................................... 15
2.3.1 Linear Processes ................................................................................................... 15
2.3.2 Iterative Processes ................................................................................................ 17
2.3.3 The Role of Uncertainty in Innovation Processes ................................................ 22
2.4 The Business Model Concept .......................................................................................... 24
2.4.1 Definitions of the Business Model ....................................................................... 27
2.4.2 Business Model vs. Strategy ................................................................................ 30
2.4.3 Business Model Frameworks & Components ...................................................... 32
2.4.3.1 Frameworks ............................................................................................ 32
2.4.3.2 Components ............................................................................................ 35
2.5 Business Model Innovation ............................................................................................. 37
X Table of Contents
2.5.1 Definitions of Business Model Innovation ........................................................... 37
2.5.2 Types of Business Model Innovation ................................................................... 39
2.5.3 The Business Model Innovation Process .............................................................. 40
2.5.3.1 Origins .................................................................................................... 40
2.5.3.2 Outputs ................................................................................................... 42
2.5.3.3 Characteristics ........................................................................................ 44
2.5.3.4 Startups vs. Incumbent Firms ................................................................. 46
2.6 Summary – State of Business Model Research ............................................................... 48
2.7 Research Gap ................................................................................................................... 49
3 Methodology ................................................................................................................... 51
3.1 Process Research ............................................................................................................. 51
3.2 Research Design & Methods ........................................................................................... 54
3.2.1 Research Design & Course of Research ............................................................... 54
3.2.2 Case Study Research ............................................................................................ 58
3.2.3 Synergistic Use of Longitudinal and Retrospective Research ............................. 59
3.2.4 In-Depth Retrospective Case Studies (Organizational Level).............................. 61
3.2.4.1 Case Selection Strategy .......................................................................... 61
3.2.4.2 Data Collection ....................................................................................... 63
3.2.4.3 Data Sources ........................................................................................... 64
3.2.4.4 Data Analysis ......................................................................................... 65
3.2.5 Longitudinal Case Studies (Individual Level) ...................................................... 67
3.2.5.1 Case Selection Strategy .......................................................................... 67
3.2.5.2 Data Collection ....................................................................................... 67
3.2.5.3 Data Sources ........................................................................................... 70
3.2.5.4 Data Analysis ......................................................................................... 71
3.2.6 Conceptual Model Development (Contextual Level)........................................... 73
3.2.6.1 Literature Review ................................................................................... 73
3.2.6.2 Analysis & Model Development ............................................................ 74
3.3 Summary .......................................................................................................................... 77
4 Business Model Innovation at the Organizational Level (In-Depth Retrospective
Case Studies) .................................................................................................................. 79
4.1 Introduction ...................................................................................................................... 79
4.2 In-Depth Case Study I: Company A ................................................................................ 80
4.2.1 Description Company A ....................................................................................... 80
Table of Contents XI
4.2.2 The Business Model Innovation at Company A .................................................. 82
4.2.2.1 The Traditional and the New Business Model ....................................... 82
4.2.2.2 Innovativeness & Risk of the New Business Model .............................. 86
4.2.3 Triggers ................................................................................................................ 87
4.2.4 Impact of the New Business Model...................................................................... 88
4.2.5 Main Stages of the Business Model Innovation Process ...................................... 90
4.2.6 Designing and Implementing a New Business Model ......................................... 95
4.2.6.1 Business Model Ambidexterity .............................................................. 97
4.2.6.2 Barriers & Drivers .................................................................................. 99
4.2.7 Learnings and Future Business Model Innovations ........................................... 102
4.3 In-Depth Case Study II: Company B ............................................................................. 105
4.3.1 Description Company B ..................................................................................... 105
4.3.2 The Business Model Innovations at Company B ............................................... 107
4.3.2.1 Weaving Metals – The Core Business ................................................. 107
4.3.2.2 Architecture – Company B's First Business Model Innovation ........... 110
4.3.2.3 From a Manufacturing Organization to a Service Provider ................. 112
4.3.3 Triggers of Business Model Innovations ............................................................ 117
4.3.4 The Anatomy of Developing from Product to Service ....................................... 120
4.3.4.1 The Basics of a Strategic Shift from Product to Service ...................... 120
4.3.4.2 Development of a Service Provider Business Model ........................... 124
4.3.4.3 Business Model Ambidexterity ............................................................ 127
4.3.4.4 Barriers and Drivers ............................................................................. 129
4.3.5 Experience in Business Model Innovation ......................................................... 135
4.3.5.1 Ten Patterns .......................................................................................... 135
4.3.5.2 The Business Model as a Core Competence ........................................ 138
4.3.5.3 Future Business Model Innovations ..................................................... 139
4.4 Analytical Generalization: Cross-Case Analysis ........................................................... 140
4.5 Conclusion ..................................................................................................................... 151
5 Business Model Innovation at the Individual Level (Longitudinal Case Studies) . 153
5.1 Introduction .................................................................................................................... 153
5.2 Nine Longitudinal Case Studies .................................................................................... 153
5.3 Descriptive Data ............................................................................................................ 154
5.4 A Model of Business Model Design Processes ............................................................. 158
5.5 Emergent Process Stage Themes ................................................................................... 162
5.5.1 Information Gathering ........................................................................................ 162
XII Table of Contents
5.5.2 Idea Casting & Construction .............................................................................. 163
5.5.2.1 Idea Generation .................................................................................... 163
5.5.2.2 Excursus – Analogous Applications of Business Models .................... 167
5.5.2.3 Idea Evaluation, Idea Selection & Prototype Construction .................. 169
5.5.3 Delivery .............................................................................................................. 174
5.6 Emergent Process Influencing Themes ......................................................................... 176
5.6.1 Context, Collaboration & Team Composition.................................................... 176
5.6.1.1 Context ................................................................................................. 176
5.6.1.2 Collaboration ........................................................................................ 177
5.6.1.3 Team Composition ............................................................................... 181
5.6.2 Artefacts ............................................................................................................. 182
5.7 Individual Perceptions of Business Model Innovation .................................................. 187
5.8 Conclusion ..................................................................................................................... 190
6 Business Model Innovation at the Contextual Level (Conceptual Model
Development) ................................................................................................................ 193
6.1 Introduction .................................................................................................................... 193
6.2 Business Model Innovation Processes & Environmental Characteristics ..................... 194
6.3 Perspectives on Business Environments ........................................................................ 196
6.4 Scanning the Environment of Business Models ............................................................ 198
6.5 Conceptualizing the Environment of Business Models ................................................. 199
6.5.1 The Business Model Environment Framework .................................................. 199
6.5.2 The Business Model Environment Map ............................................................. 202
6.5.3 The Dimensions of the Business Model Environment ....................................... 203
6.5.4 The Interface Business Model to Business Model Environment –
Opportunities for Business Model Innovation ................................................... 203
6.6 Exemplary Application of the BME Framework ........................................................... 210
6.7 Conclusion ..................................................................................................................... 214
7 Summary & Discussion ............................................................................................... 217
7.1 Theoretical Implications ................................................................................................ 218
7.1.1 Theoretical Implications at the Organizational Level ........................................ 218
7.1.2 Theoretical Implications at the Individual Level................................................ 223
7.1.3 Theoretical Implications at the Contextual Level .............................................. 228
7.2 Managerial Implications ................................................................................................ 230
7.3 Limitations & Further Research .................................................................................... 232