Business model innovation

Business model innovation

Innovation in business models can be an important source of competitive advantage. Companies such as Amazon, Google and Apple have initiated strong continuing research in business models as a way of exploiting technology and innovations.

However, to date, the majority of business model research is limited to conceptual work, with little guidance for executives on how to successfully initiate, implement and manage the innovation process of their firm's business model.

The aim of our research is threefold:

  • Lars Jacob Tynes Pedersen and his team investigate the important topic of "Smart and sustainable business models", examining how companies are redesigning and innovating business models with the dual objective of aligning sustainability concerns and profitability.
  • We examine the organizational dimension of business model innovation. Based on a large scale empirical study on Norwegian companies we aim to unravel the antecedents, moderators and performance implications of business model change.

CSI Publications for business:
"The State of Business Model Innovation" (PDF 1.5mb)
By Tina Saebi and Krysta Alexa Singh.

  • Smart and sustainable business models

    Smart and sustainable business models

    Lars Jacob Tynes Pedersen

    Title | Associate Professor NHH
    Email |
    Tel | +47 911 20 284

    The sustainability problem is quickly becoming one of the key drivers of innovation (Nidumolu et al., 2009). The sense of urgency concerning the lacking sustainability of current business models and practices has led to a proliferation of business model innovations for sustainability (Wells, 2013; Boons and Lüdeke-Freund, 2013; Gulbrandsen et al., 2015).

    The drivers of such innovations are manifold, including resource depletion and scarcity, new customer preferences for greener products and services, the diffusion of green technologies that can lead to reduction of negative externalities, the development of regulations and anticipation of future regulations on emissions, as well as increasing expectations among stakeholders for more corporate transparency (e.g. Jørgensen and Pedersen, 2013).

    Technological innovation alone is unlikely to lead to a sustainable economy – in order to attain such an objective, a transformation of business models is necessary.

    Business models for sustainability involve the integration of sustainability concerns into the core strategy and operations of companies. Due to the gravity of the sustainability problem, solving this problem is likely to be a source of profitable business opportunities for the unforeseeable future (e.g. Porter and Kramer, 2011).

    The effect of business model innovations for sustainability is the reduction of negative externalities and the promotion of positive externalities in a manner that moves companies in the direction of internalizing their externalities and arriving at a net positive impact on society and the environment (McDonough and Braungart, 2013; Prahalad, 2009).

    Among the new modes of business model design that drive companies towards attaining this objective are business models based on ideas such as the circular economy (McDonough and Braungart, 2008; Heck and Rogers, 2014), the sharing economy (Belk, 2014) and collaborative business (Tencati and Zsolnai, 2009).

    The aim of this work package is to investigate how companies are redesigning and innovating business models with the dual objective of aligning sustainability concerns and profitability.

    Such business model innovations comprise numerous organizational characteristics and practices from value proposition design to revenue model innovations, and from strategy formulation to management control practices and organizational innovations that promote the company’s ability to align sustainability and profitability.

    By means of both qualitative and quantitative studies with partner companies and beyond, we aim to investigate central characteristics of sustainable business models as well as how they are designed and implemented. The results of the work package will contribute to the understanding of how companies can successfully adapt their business models in the face of the demand for sustainability.

    The studies are likely to be conveyed both in international scientific journals, in books and anthologies, and in practitioner-oriented articles.

    Key personnel: Lars Jacob Tynes Pedersen (NHH), Sveinung Jørgensen (HIL/NHH), Erlend Aas Gulbrandsen (HIL), Katarina Kaarbøe (NHH).

  • Best practices in Business Model Innovation

    Best practices in Business Model Innovation

    Tina Saebi

    Title | CSI Research Director topic 1: Business model innovation (BMI)/ Assosiate Professor NHH
    Email |
    Tel | +47 55 95 94 62

    Starting date and duration: 2011(2)-2016(4)

    Many scholars and practitioners argue that business model innovation can serve as an important source of competitive advantage (cf. Sosna et al., 2010; Ho et al., 2011) and thus have a positive influence on firm value (Zott and Amit, 2007, 2011). However, the existing literature does not offer a clear conceptualization of the construct, and does little to explain how business model dimensions are interrelated, change over time and must be aligned with strategy (Zott and Amit, 2008). Moreover, there is little empirical evidence on the relationship between business models and performance as well as how organizations can develop a preparedness for business model innovation. To date, there is little empirical evidence on the drivers, barriers and facilitators of business model innovation and how existing organizational structures, top management team composition, capabilities, beliefs, cultures and so on influence the firm’s ability to flexibly change to new business models. Because of these knowledge gaps, normative guidelines and prescriptive theory (e.g. Osterwalder and Pigneur, 2009) encourage business model innovation as a design task without empirical documentation of these relationships.

    To address these shortcomings, the aim of this work package is to produce empirical insight into the organizational dimension of business model innovation. Based on a large-scale survey on business model innovation in Norwegian firms that was launched in Fall 2014, the main focus in 2015-2017 will be on the evaluation and empirical analyses of the data collected and the publication of empirical articles aimed at top management research journals in 2015 and beyond.

    Key Personnel: Nicolai J. Foss (NHH, CBS), Tina Saebi (NHH), Per E. Pedersen (NHH, HBV), Lasse Lien (NHH), Keld Laursen (CBS).