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The hard truth about business model innovation

Published on Jan 1, 2016in MIT Sloan Management Review 2.20
Clayton M. Christensen49
Estimated H-index: 49
Thomas Bartman1
Estimated H-index: 1
Derek van Bever6
Estimated H-index: 6
The landscape of failed attempts at business model innovation is crowded and becoming more so as management teams at established companies mount both offensive and defensive initiatives involving new business models. This article assembles knowledge that the primary author has developed over the course of two decades studying what causes good businesses to fail, complemented by a two-year intensive research project to uncover where current managers and leadership teams stumble in executing business model innovation. Many failed business model innovations involve the pursuit of opportunities that appear to be consistent with a units current business model but that in fact are likely to be rejected by the existing business or its customers. To achieve successful business model innovation, organizations should focus on creating new business models, rather than changing existing ones. Once a new business is launched, it must remain independent throughout the duration of its journey, but maintaining autonomy requires ongoing leadership attention.
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  • Citations (32)
Cited By32
Published on Jul 1, 2019in Long Range Planning 3.36
Yang Zhao1
Estimated H-index: 1
(Lboro: Loughborough University),
Stephan von Delft3
Estimated H-index: 3
(Glas.: University of Glasgow)
+ 1 AuthorsTrevor Buck25
Estimated H-index: 25
(Glas.: University of Glasgow)
Abstract In recent decades, multi-sided platform business models have become an important avenue for value creation and capture, but the phenomenon itself remains under-theorized. We address this gap and present new, empirically-driven insights into how platform business models evolve in a context of fierce competition. Through a longitudinal, qualitative study of twelve multi-sided platforms that operate under challenging industry conditions, we discover that success in platform battles can pla...
Published on Jul 1, 2019in Journal of Business Research 4.03
Thijs Broekhuizen10
Estimated H-index: 10
(UG: University of Groningen),
O. Emrich (UG: University of Groningen)+ 3 AuthorsLaurens Sloot9
Estimated H-index: 9
(UG: University of Groningen)
Abstract This multi-method study aims to shed light on digital platforms' decisions regarding their openness. Platform openness results from a series of decisions on how open a platform is regarding: (a) suppliers, (b) customers, (c) complementary service providers, as well as to (d) product categories and (e) channels. By conducting a scoping literature review, we analyze the current body of knowledge about the drivers, dimensions and outcomes of platform openness. Using an expert panel discuss...
Published on Jun 1, 2019in Journal of Business Research 4.03
Bernardo Balboni6
Estimated H-index: 6
(University of Modena and Reggio Emilia),
Guido Bortoluzzi7
Estimated H-index: 7
(UniTS: University of Trieste)
+ 1 AuthorsAndrea Tracogna4
Estimated H-index: 4
(UniTS: University of Trieste)
Abstract Focusing on the role of efficiency and novelty design themes, this paper examines how (a) the initial business model of a start-up, (b) the subsequent changes in the design themes and (c) the combinative effect of efficiency and novelty (contextual ambidexterity) impact a start-up's growth performance. The study is based on a survey involving 267 new ventures from high-tech industries. The results highlight the importance of pursuing higher efficiency over the life cycle of a start-up, ...
Published on Jun 1, 2019in Review of Managerial Science 2.39
Thomas Clauss6
Estimated H-index: 6
(University of Marburg),
Peter Harengel1
Estimated H-index: 1
(University of Marburg),
Marianne Hock1
Estimated H-index: 1
(University of Marburg)
Platform-based business models have become such an essential pillar of today’s economy that the term ‘sharing economy’ is now frequently used to describe the new status quo. The success of platforms such as Airbnb, Blablacar or Shpock is evidence of a seismic shift from an ownership society to a sharing society. However, only very few platforms are able to accumulate a large and loyal following of customers. When success hinges upon engagement, a large user base can make or break one of these pl...
Published on Jul 1, 2018in Long Range Planning 3.36
Karolin Frankenberger8
Estimated H-index: 8
(HSG: University of St. Gallen),
Roman Sauer2
Estimated H-index: 2
(HSG: University of St. Gallen)
Abstract A firm's ability to conceive performance-enhancing business models (BMs) has become a cornerstone of competitive advantage. There is consensus that external triggers spur such BM change, but the literature has remained silent on the role of internal and cognitive antecedents such as managerial attention. In our inductive case study of four corporate spin-offs, we find that top management teams (TMTs) with a specific set of attention patterns are more likely to develop performance-enhanc...
Ahmed A. Al-Imarah1
Estimated H-index: 1
(University of Bath),
Robin Shields9
Estimated H-index: 9
(University of Bath)
The potential influence of Massive Open Online Courses (MOOCs) on higher education institutions is much discussed and debated, with some arguing that MOOCs are a disruptive innovation that will radically change existing models of higher education. However, analyses of whether and how MOOCs might disrupt higher education models are relatively scarce. This paper analyses whether MOOCs should be considered a disruptive innovation according to the concept’s defining criteria. It compares characteris...
Published on Apr 1, 2019in Chinese Management Studies 0.94
Suqin Liao (USTC: University of Science and Technology of China), Zhiying Liu (USTC: University of Science and Technology of China)+ 1 AuthorsPeichi Ye (Northeast Normal University)
Purpose The purpose of this paper is to examine whether the new distributed leadership patterns is an important driver for innovating business model. By synthesizing insights from the dynamic capabilities perspective, it also explores how and when distributed leadership enhances the business model innovation (BMI) by involving strategic flexibility as a mediator and environmental dynamism as important contingency. Design/methodology/approach A survey via questionnaire was conducted with 262 CEOs...
Published on Mar 1, 2019in Asia Pacific Journal of Management 2.74
Mark Loon6
Estimated H-index: 6
(Bath Spa University),
Roy Chik1
Estimated H-index: 1
High-technology small and medium-sized enterprises (SMEs) are compelled to innovate to differentiate themselves from their competitors but at the same time be efficient, as they do not have economies of scale enjoyed by larger organizations. This qualitative study explores this paradoxical challenge faced by Hong Kong SMEs in designing their business model to strike such a balance. In doing so, it investigates the competencies of these firms in technology management and their innovation practice...
Published on Jan 14, 2019in Management Decision 1.96
Makhmoor Bashir2
Estimated H-index: 2
(ICFAI: Institute of Chartered Financial Analysts of India),
Makhmoor Bashir (ICFAI: Institute of Chartered Financial Analysts of India), Rajesh Verma4
Estimated H-index: 4
(LPU: Lovely Professional University)
Purpose The purpose of this paper is to propose a theoretical model of business model innovation based on evidences from the past literature. The paper established a link between business model innovation (BMI) strategic flexibility, competitive advantage and firm competence. Design/methodology/approach The study was approached from a theoretical perspective using previous literature on BMI from 2000 to 2017, as per the recommendations of Tranfield et al. (2003). A total of 104 conceptual and em...