More can be better: operating multiple business models in a corporate portfolio

Abstract

Purpose Established firms are increasingly under pressure to develop new business models (BM) in a continuous manner to cope with competitive constraints and changing market requirements. Business model innovation (BMI) is widely accepted as a viable means to stay ahead of competition. Yet, firms struggle with successful BMI. The barriers to BMI is a widely discussed topic in academia and practice but with little reference to the barriers a firm is confronted with when operating multiple BMs in a corporate portfolio. Design/methodology/approach This paper investigates the implications for a firm operating a multitude of BMs concurrently. By combining the results of a literature analysis and 15 expert interviews from the fields of corporate strategy, business modelling and consulting, this paper presents and discusses the opportunities and challenges related to BM diversification. Findings The findings show that a strategic BM portfolio can be installed for enhanced value creation. However, managing multiple BMs and finding the right balance between existing and new business pose a major challenge for many established firms. With these results, the paper contributes to the existing literature in the fields of BMI and BM portfolio management. The findings clearly show the emerging importance of a strategic corporate BM portfolio for both research and practice and may provide an impetus for management discussions involving strategic BM portfolio decisions. Originality/value By building on and adding to existing literature and discussing existing works, this paper aims to giving a structured and comprehensive overview of enhancing and impeding factors on value creation when operating multiple BMs in a corporate portfolio.

Opening the Dynamic Capability Black Box: An Approach to Business Model Innovation Management in the Digital Era

“…Naturally, startups and new ventures do not face the issue of substituting a prior BM, but they will need to protect the BM from retaliation [79]. When considering an existing BM, and not only startups and new ventures, it is crucial to have a balanced BM innovation portfolio [80], not only for the evolution of the current BM, re-aligning to the contextual reality, but also to create new and parallel BM [81]. We organized the publications considering similarities between the publications into six seizing capability indicators:…”

“…BMI portfolio management evaluates the structure deployed to select BMI projects and the balance between improving the current BM and creating new BM [81]. Hence, it relates to how the company allocates time and effort for BMI [80] and how it is structured to pursue BMI [55].…”

“…Strategic human resources management refers to evaluating the company's practices for hiring, deploying, and training people [103]. It means bringing new people in, moving people for acting on different BMs, correctly assigning people based on skills, cultural background, and interests [80], [102], [105].…”

“…Exploring complementarities with other BMs while separating potential conflicts are key ambidexterity practices [111]. It is directly related to the business model innovation portfolio [80], [112], but designing new BM is different from managing and scaling them [108]. The tools for sensing and seizing focus on BM design, but these tools usually do not cover when reaching out the point of scaling or defining how to explore synergies between an existing BM and a new BM while avoiding pitfalls that destroy value [81].…”

Exploratory Studies of the Business Model Canvas - Differences in the Visualizations of the Business Model

“…Adaptation of BM is a necessity in achieving success in the market in light of overlapping limitations and customer requirements. Organizational complexity shifts from managing a single model to multiple business models in the managed enterprise (Bosbach, Brillinger, and Schäfer, 2020;Schwarz, Terrenghi, and Legner, 2017). The Business Model is not limited to any way of its expression, it's not related to any technique nor technology, neither it's not commonly defined (Szopinski et al, 2020;Spieth, Schneckenberg, and Ricart, 2014;Massa, Tucci, and Afuah, 2017).…”