Home >> Research-Technology Management, Volume 54, Number 3

THE THREE FACES OF BUSINESS MODEL INNOVATION: CHALLENGES FOR ESTABLISHED FIRMS

Authors: Koen, Peter A.1; Bertels, Heidi M. J.2; Elsum, Ian R.3

Source: Research-Technology Management, Volume 54, Number 3, May-June 2011 , pp. 52-59(8)

Publisher: Industrial Research Institute, Inc

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Abstract:

OVERVIEW: Business model innovation represents a significant opportunity for established firms, as demonstrated by the considerable success of Apple's iPod/iTunes franchise. However, it also represents a challenge, as evidenced by Kodak's failed attempt to dominate the digital photography market and Microsoft's difficulty gaining share in the gaming market, despite both companies' huge financial investments. We developed a business model innovation typology to better explain the complex set of factors that distinguishes three types of business model innovations and their associated challenges.

Keywords: Business model innovation; Value networks; Radical innovation; Breakthrough innovation; Sustaining innovation; Disruptive innovation

Document Type: Research article

DOI: http://dx.doi.org/10.5437/08953608X5403009

Affiliations: 1: Peter Koen is an associate professor in the Wesley J. Howe School of Technology Management at Stevens Institute of Technology, where he teaches undergraduate and graduate courses in corporate entrepreneurship and technology management. He is also the director of the Consortium for Corporate Entrepreneurship, an organization he founded in 1998 with the mission to increase the number, speed, and success rates of highly profitable products and services at the front end of innovation. Peter also has 18 years of industry experience, having worked at ATT Bell Laboratories and BD. He holds a PhD in biomedical engineering from Drexel University. 2: Heidi Bertels is a visiting assistant professor of business administration at the University of Pittsburgh, where she teaches courses in entrepreneurship, corporate entrepreneurship, and strategic management. She is finishing her dissertation research at Stevens Institute of Technology on how established organizations can be successful when they try to enter new value networks. She also has a BA and an MA in integrated product development from Hogeschool Antwerpen in Belgium. Her research interests are innovation management, product development, and entrepreneurship. 3: Ian Elsum is principal adviser in the Science Strategy and Investment Group of Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO), with responsibilities in planning and investment. He is also a visiting fellow at the Australian National University, where he is undertaking research on the management of radical and breakthrough innovation. Ian has 24 years of experience in the strategic management of applied research. He has been a member of a number of company boards and management and advisory committees, and has also been a regular participant in developing innovation policy. Ian has a PhD in chemistry from Monash University.

Publication date: 2011-05-01

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