Managing business model renewal. (1st January 2011)

• Record Type: Journal Article
• Authors: Sandström, Christian; Osborne, Ralf-Geert
• Is Part Of: International journal of business and systems research. Volume 5:Number 5(2011)
• Page Start: 461
• Page End: 474
• Publication Date: 2011-01-01
• Subjects: innovation -- discontinuous -- systems -- business model -- interdependence -- disruptive; Management information systems -- Periodicals; Business -- Data processing -- Periodicals; 658.4038011
• Languages: English
• ISSNs: 1751-200X

Abstract

It is well-documented that firms often need to change their business model when introducing a new product, but more knowledge is needed regarding why they struggle when trying to do so. This paper explores the challenges related to renewing an established business model. Drawing upon a case study and industrial network theory, we argue that business models are difficult to change because they are based upon interdependence throughout a system of interrelated actors. Firms are interconnected with actors beyond its boundaries and thus, only a limited control can be imposed. Our findings also suggest that firms can change their business models by identifying critical actors and by aligning incentives throughout their network.