Technology innovation‐induced business model change: a contingency approach

Abstract

Purpose: To construct and test, through its application to a real case study, a methodology that generates contingencies for the evolution of a company or an industry's reference business model (BM) under the impact of a technology innovation. Design/methodology/approach: The paper draws on theoretical predicaments of organizational development and scenario planning as well as more recently published works (2001‐2004) on BM design and change in order to build the primary steps of the methodology. A contingency approach is applied for selecting among alternatives the most suitable future BM. The usefulness and applicability of the provided methodology are proved through a real case study that concerns changing the exhibition's industry reference BM under the impact of a mobile innovation. Findings: The proposed methodology is primarily useful in cases where a strategic manager wishes to draw and assess not one totally new BM but a set of scenarios that reflect alternative configurations for its current BM evolution. Such a methodology needs to be complemented with a contingency framework for guiding the selection of the scenario that better suits the internal and external environment of the company. Research limitations/implications: It is expected that related theories, such as the theory of Industrial Organization and the theory of Network Economics, also need to be examined under the light of BM change to identify and cross‐validate factors that contribute to the design and assessment of BMs. Practical implications: The ultimate utility of the proposed methodology is as a road‐map for leading change in the value‐creation logic of a firm, taking advantage of an advanced technology solution. By continuously changing their BM, and identifying new ways to deliver value to their customers, firms aspire to obtain and sustain a competitive advantage in high‐velocity environments. Originality/value: This paper fulfils an identified research gap for a structured approach towards changing the BM of a firm, which introduces a technology innovation by keeping the principles of the old (traditional) business logic and taking into account the effects incurred from the firm's internal and external environment.