Business Model Innovation Strategy

This chapter develops the concept of business model innovation (BMI) strategy, which refers to the choices made by entrepreneurial leaders of incumbents and start-ups, in for-profit and not-for-profit or hybrid organizations, with respect to (1) the design of a new system of activities; (2) the processes, including their antecedents, by which the new activity system is created and implemented; and (3) the management and ongoing adaptation of the new activity system to ensure coherence (i.e., internal, external, and strategic fit) with the objective of sustaining and improving the focal organization’s competitive advantage. This chapter postulates that a BMI perspective has become a prerequisite for transformative innovation, and that entrepreneurial leaders of all firms need a BMI strategy. We also relate BMI strategy to digital platforms and point out distinct capabilities that managers need to hone in this context. Throughout the chapter, numerous important research opportunities in BMI strategy are articulated.