Managers frequently rely on innovation to drive profitable growth. In many industries new products and services are fundamental. However, although product and service innovations have been important to firms for decades, increased competitive pressure has pushed business model innovation higher up the priority list.
Recently, the business model has been receiving substantial attention from practitioners and academics. The business model describes how a firm creates and appropriates value (Chesbrough and Rosenbloom, 2002; Björkdahl, 2009). Firms may offer products or services, but their offerings are embedded in a system of activities and relationships that comprise their firms’ business models. Thus, the business model shapes the products and services the firm will develop and launch.
Although the business model can be interpreted in different ways, and more research is needed in this area, even less is known about business model innovation and little research has been directed towards the innovation aspect of the business model.
A product or service innovation is the introduction of a product or service that is new or significantly improved for a firm or for the world with respect to its characteristics or intended uses. Firms can gain competitive advantage by introducing new products or services, which increase demand and markup. A business model innovation, in contrast, may not involve a new product or service, but may redefine an existing product or service, its delivery to the customer and/or how the firm profits from the customer offering, and thus can create strong competitive advantage. Although product or service offerings may be technologically similar they can render radically different performance (Chesbrough, 2009). The reason why business model innovation has become so important to firms is that it usually has a stronger impact on profit margins than product and service innovations (IBM, 2006).
The effects of business model innovation have been underestimated and firms often find them difficult to manage. There is a wide range of business model innovations, such as those of IKEA, Southwest Airlines and Wal-Mart, which have reshaped entire industries. The Fortune 500 list of companies reveals that many recent entrants have transformed established industries or created completely new ones (Johnson et al., 2008). Business model innovation seems to be more difficult for established firms, and most have created new products and services without changing the logic of how they conduct their business.
For decades, many successful firms have employed a single, dominant business model that represents their key choices. They have likely integrated manufacturing, in-house R&D and product sales based on per-unit prices. Since the 1990s, however, this pattern has been changing, with external collaborations and outsourcing, for example, becoming more important to firms. At the same time, firms are employing more extensive repertoires than ever before to appropriate value. They are offering financing, solutions, value sharing, downstream participation in the value chain, licensing and so on. We need, therefore, to know more about business model innovation.
This call for papers is to solicit contributions that fill the gap between business models and business model innovations, to describe what business model innovations consist of and the role that they play.
We are looking in particular for theoretical contributions that add to our theoretical and conceptual understanding of business model innovation. Suitable topics could include, but are not limited to:
- Business model innovations - what are they and what are they not?
- Why should we care about business model innovations?
- What is new in business model innovations, what has changed and why, and how can these changes be explained?
- What concepts, models, frameworks and theories do we need to explain business model innovations, and why?
- Which business model innovations can we expect to be successful and why?
- What role do business model innovations play in industry disruptions?
- Business models and business model innovations are normally applied to manufacturing and e-commerce. What is a business model innovation in project-based industries and how useful is the business model innovation concept?
- What is the relation between product innovation or any type of new offer, and business model innovation?
Full paper submission (max 8,000 words): 1 October, 2011