Business model design and innovation: Unlocking the performance benefits of innovation

Abstract

We investigate the relationships between innovation in the business model, business model design themes, and firm performance. The 'business model view' and the related 'business model innovation' as emerging strategy, and innovation research domains, remain both ill-defined and marred by vague construct boundaries and limited empirical support. We build on existing theory to test our research model in a sample of 331 Australian firms. We find that business model design themes, which we argue are mechanisms for appropriating value from the firm's business model, mediate the relationship between innovation and firm performance. Innovation without clarity in the business model leads to modest or negligible performance outcomes. We advocate for novelty-centered design themes because they unlock and translate the value from innovation to firm performance to a greater extent than transaction efficiency and user simplicity. We contend that broad innovation within the business model matters to performance but only if firms focus their business model design efforts more narrowly on coherently entrenching novelty and efficiency within their activity and transaction architecture.JEL Classification: L22, L26, M10

Business model design–performance relationship under external and internal contingencies: Evidence from SMEs in an emerging economy

“…In this study, we use BM novelty and BM efficiency designs as they are closely related to important organizational concepts such as product-market strategies (Zott & Amit, 2008); exploration and exploitation (Wei et al, 2014); technological innovation (Wei et al, 2014); and relationship marketing (Brettel et al, 2012). Moreover, lock-in and complementarity are less common, often 5 restricted to high-capital industries and digital platforms, while novelty and efficiency are prevalent in all industries, influencing value creation and firm performance (Gronum et al, 2016;Kulins et al, 2016;Zott & Amit, 2008).…”

Harnessing social innovation for energy justice: A business model perspective

“…INSERT Table 1: Energy Justice Decision-Making Framework HERE However, one key lacuna within the framework is an almost complete lack of engagement with the business literature, or any connection to emerging themes in innovation studies and business model design (for example, open innovation [Chesbrough, 2006;Chesbrough and Bogers, 2014]; iconic business models [Sabatier et al 2010]; novelty, transaction efficiency, and user simplicity [Gronum et al 2015]; and business models for sustainability [Foxon et al 2015]). Therefore, this paper uses an understanding of business models as providing a framework for 1) linking the workings inside the firm to outside elements (such as customers), in terms of 2) value which is created, captured and monetized (Teece, 2010;Amit and Zott, 2001;Baden-Fuller and Mangematin, 2013).…”

Business Model Design for Social Goods and Services in Developing Economies

“…In this vein, some studies have reported positive effects of Novelty and Lock-in themes on performance or innovation outcomes (e.g., Gerdoçi et al, 2018;Gronum et al, 2016;Kulins et al, 2016;Wei et al, 2014). For example, in a recent article, Gerdoçi and colleagues (2018) find that novelty-centred BM design significantly affects firm performance while efficiency-centred design do not.…”