Title: The introduction of a competing business model: the case of eBay
Authors: Christian Comberg; Vivek K. Velamuri
Addresses: HHL Leipzig Graduate School of Management, Jahnallee 59, 04109 Leipzig, Germany ' HHL Leipzig Graduate School of Management, Jahnallee 59, 04109 Leipzig, Germany
Abstract: In today's highly competitive business environment, the reasons for companies to engage in business model innovation (BMI) are manifold. The pressure on firms to innovate their business models results in either an adaptation of the incumbent business model, or the introduction of a new competing business model. Based on extant theory, we found that the reasons for a firm to engage in BMI can be clustered into three categories: 1) increased profitability; 2) improved strategic positioning; 3) customer attraction. By conducting an exploratory single case study approach, we confirmed these categories by identifying the distinct reasons for eBay to introduce a competing business model. We then highlight the impacts on the focal firm as a result of the new business model. We find that the introduction of a competing business model can create novel sources of value for the company and its customers. In total, the study emphasises that when firms launch competing business models, intended and unintended consequences can be both positive and negative.
Keywords: business model innovation; BMI; service firms; competing business models; e-commerce; electronic commerce; case study; profitability; strategic positioning; customer attraction; eBay; value creation.
International Journal of Technology Management, 2017 Vol.73 No.1/2/3, pp.39 - 64
Received: 26 Jul 2014
Accepted: 03 Mar 2015
Published online: 21 Feb 2017 *