Title: Incumbents' responses to disruptive business model innovation: the moderating role of technology vs. market-driven innovation

Authors: Solomon Russom Habtay; Magnus Holmén

Addresses: Department of Management and Marketing, Faculty of Business and Economics, The University of Melbourne, 198 Berkeley St., Carlton VIC 3052, Australia ' School of Business and Engineering, Halmstad University, P.O. Box 823, SE 301 18 Halmstad, Sweden

Abstract: Current research argues that incumbents should respond to disruptive innovation by setting up a separate business unit. This recommendation stems from research predominantly carried out on disruptive technologies in high-tech industries but whether incumbents respond differently to other types of disruptive business model innovations and whether the type of response leads to a difference in performance have not been empirically analysed. By collecting data from 88 strategic business units (SBUs) and dividing the sample into incumbents responding to disruptive technology against those responding to disruptive market-driven innovations, the study shows that the latter type of firms can succeed in managing both disruptive and sustaining innovations without setting up structurally separated business units. We discuss the implications of our results and highlight areas for further research.

Keywords: disruptive innovation; entrepreneurial orientation; market orientation; acquisition; leverage; differentiation; business model innovation; technological innovation; double-threat; single-threat; disruptive technology; market-driven innovation; business units; entrepreneurship.

DOI: 10.1504/IJEIM.2014.064211

International Journal of Entrepreneurship and Innovation Management, 2014 Vol.18 No.4, pp.289 - 309

Received: 16 Aug 2013
Accepted: 05 Mar 2014

Published online: 06 Aug 2014 *

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