Title: Managing business model renewal

Authors: Christian Sandstrom, Ralf-Geert Osborne

Addresses: Technology Management and Economics, Chalmers University of Technology, Vera Sandbergs Alle 8, Goteborg SE-412 96, Sweden. ' Department of Technology Policy Analysis and Management, Section of Technology Strategy and Entrepreneurship, Delft University of Technology, Jaffalaan 5, BX Delft 2628, The Netherlands

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.

Keywords: business models; interdependence; model renewal; new product development; NPD; established models; industrial networks; interrelated actors; limited control; critical actors; incentive alignment; discontinuous innovation; disruptive innovation; personal care industry; incontinence products; systems research.

DOI: 10.1504/IJBSR.2011.042094

International Journal of Business and Systems Research, 2011 Vol.5 No.5, pp.461 - 474

Published online: 26 Aug 2011 *

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