What causes managers to adapt their business model?

16 December 2016 09:56

(updated: 16 December 2016 10:13)

What causes managers to adapt their business model?

Business models define how companies create, deliver and capture value. But business models are not static – they need to be adapted to changing market conditions.

As the business environment changes - due to increased competition, decreasing demand or new technologies- managers have to rethink their current business model. However, this does not come easily.

Managers often find themselves captured in the business model trap: a situation where the still-functioning existing business model blindsides the need for change.  For example, underestimating the impact of new technologies and changing customer demands, brick-and-mortar retail companies such as Blockbuster (DVD-rental) and Borders (book selling) held on to their initial business model for too long and eventually lost their market shares to the web-based business models of Netflix and Amazon.   But does it have to come so far?

In fact, what causes managers to change their existing business model? Are managers more likely to adapt the business model under conditions of threat or conditions of perceived opportunity? Based on a survey among 1195 Norwegian companies, we attempted to find out what makes managers to engage in business model adaptation.  

Click here for a summary of our research findings in “The European Business Review” www.europeanbusinessreview.com/what-causes-managers-to-change-their-business-model

For the full paper, please check «What drives business model adaptation? The impact of opportunities, threats and strategic orientation» by Tina Saebi, Lasse Lien and Nicolai Foss. Published in: Long Range Planning, 2016.

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