Title: Retaining fit between business models and product market strategies in changing environments

Authors: David Klang; Fredrik Hacklin

Addresses: Department of Management, Technology, and Economics, ETH Zurich, Weinbergstrasse 56/58, CH-8092 Zurich, Switzerland ' Department of Management, Technology, and Economics, ETH Zurich, Weinbergstrasse 56/58, CH-8092 Zurich, Switzerland

Abstract: Changing environments challenge incumbent firms to retain the fit between their product market strategy and their business model as specific instances of a firm's strategy and structure. Yet, as the business model depicts the pattern of a firm's boundary-spanning transactions with customers, vendors and partners, a change in a focal firm's business model necessitates managing its relationship to these three external parties accordingly. A multiple-case study of 16 firms in the Information and Communication Technology (ICT) sector serves to explore how incumbent firms can enable and support the business model changes that complement the changes in a firm's product market strategy during technological convergence. The results show that three behavioural patterns - infringing, orchestrating and riding - enable and support the changes in an incumbent firm's business model that complement those changes in a firm's product market strategy. These patterns are discussed from the perspective of inter-organisational power and dependency.

Keywords: contingency theory; strategy; structure; business model innovation; business models; inter-organisational power; inter-organisational dependency; changing environment; product market strategy; product development; incumbent firms; information and communications technology; ICT sector; information technology; technological convergence.

DOI: 10.1504/IJPD.2013.055013

International Journal of Product Development, 2013 Vol.18 No.3/4, pp.311 - 343

Received: 17 Oct 2011
Accepted: 05 Oct 2012
Published online: 30 Sep 2014 *

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