Academic journal article International Journal of Business

Business Model Innovation in Different Strategic Networks

Academic journal article International Journal of Business

Business Model Innovation in Different Strategic Networks

Article excerpt

I. INTRODUCTION

With the business landscape continuously changing and competition steadily increasing, business model innovation (BMI) is now happening in many companies. It is practiced to help companies stay ahead of competition, because it co uld bring out potential unidentified sources of value (Zott and Amit, 2010) and increase the value for the customer and all of the business's stakeholders (Najmaei, 2011; Teece, 2010). Strengthening the competitive advantage of the business (Fu et al., 200 6) and attracting different customers (Markides, 2006) are other reasons for innovating business models.

Previous research on BMI mostly focused on a single firm's perspective (e.g. , Amit and Zott, 2012; Mitchell and Coles, 2004; Teece, 2010). However, the single-firm perspective can no longer explain new forms, structures, and value activities (Wu and Zhang, 2009). Many industries face value -chain reconfiguration (Kartseva et al., 2004), forming complex linkages that create a 'value network' (Bovet and Martha, 2000). Shuman and Twombly (2010) emphasize that an organization's ability to innovate and grow would be hampered if it lacks the ability to collaborate with the network. Thus, to gain the benefit of BMI activity, the network perspective needs to be incorporated (Fu et al., 2006; Zott and Amit, 2010).

Collaboration of actors usually supported by each actor's different expertise and their unique capability (Shuman and Twombly, 2010). Collaboration creates and captures value within the network (Hamel, 2 000). This would be realized when actors in the network combine their resources in co-creating the markets (Vargo and Lusch 2007). The members are also able to innovate new activity, gain access to complementary assets, and form a governance structure that reduces the costs or risks of innovative activity (Rasmussen, 2007).

Research on BMI from the network perspective is growing (e.g. , Bask et al., 2010; Nenonen and Storbacka, 2010; Palo and Tähtinen, 2011; Wu and Zhang, 2009). However, there is little research focusing on the management of BMI in different types of networks. The majority of research in networked-based Business Model Innovation (BMI) has focused on a general type of network (e.g. , Fu et al., 2006; Gordjin, 2001; Palo and Tähtinen, 2011) and defining its business model design, regardless of the different network characteristics and members' business model. Moreover, broad-spectrum framing is required for networks in the search for innovating a business model. Thus, this research aims at addre ssing this knowledge gap by developing a conceptual model describing the dimensions of BMI from the network perspective and examining the practice of BMI in different networks.

This paper is organized as follows: It starts by describing the conceptual mod el development of BMI from the network perspective. Next, the research method is described, including the case selection, interview protocol, data collection, and data analysis. To increase understanding of how the conceptual model can be used in BMI from the network perspective, an analysis of three cases representing three different types of networks is presented. Lastly, a discussion and conclusion are provided to summarize the research.

II. BUSINESS MODEL INNOVATION IN A NETWORK PERSPECTIVE: CONCEPTUAL MODEL DEVELOPMENT

In a network perspective, BMI is the process of creating a modified or new business model by sharing the activities and resources in the network. By looking at the network behavior towards BMI, the actors of the network are the most important factor to consider when they coordinate to innovate business models that are expected to create more value. Network theory (e.g., Lazzarini et al., 2001; Möller et al., 2005; Ritter, et al. 2004) states that changes can be carried out by members who interact with each other in innovation activity. The object of innovation activity is the business model (e.g., Chesbrough, 2007; Osterwalder et al. …

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