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The Evolution of Capabilities Underpinning Business Model Innovation for Sustainability in Large Incumbent Firms

Wadin, Jessica Lagerstedt LU and Bengtsson, Lars LU (2022) In International Journal of Innovation Management 26(5).
Abstract

Many studies in traditional business model (BM) literature acknowledge that it is hard for incumbent firms to change their business models, a finding echoed in the business model innovation for sustainability (BMIfS) literature. Large incumbent firms often lack or have weak capabilities needed for sustainability-driven business model innovation. This paper addresses how capabilities for such innovation evolve in large incumbent firms. The research builds on a longitudinal case study in the energy utility industry, and on two theoretical frameworks advanced in previous literature: values-based business model innovation, and capability lifecycles. We conceptually propose a stage-based maturity model of BMIfS. Our model highlights three... (More)

Many studies in traditional business model (BM) literature acknowledge that it is hard for incumbent firms to change their business models, a finding echoed in the business model innovation for sustainability (BMIfS) literature. Large incumbent firms often lack or have weak capabilities needed for sustainability-driven business model innovation. This paper addresses how capabilities for such innovation evolve in large incumbent firms. The research builds on a longitudinal case study in the energy utility industry, and on two theoretical frameworks advanced in previous literature: values-based business model innovation, and capability lifecycles. We conceptually propose a stage-based maturity model of BMIfS. Our model highlights three types of research contributions. First, we propose that the capability development underpinning BMIfS is a nonlinear process of distinct maturity stages. Second, the maturity stages have intermediate transformation junctures that the firm must go through. These junctures either change or initiate the conditions for capability development to be able to advance to the next BMIfS maturity level. Third, the shift in societal, regulatory, competitor, and customer expectations and interests triggers strategic decisions and early development of capabilities that start and push the firm into the transformation junctures.

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type
Contribution to journal
publication status
published
subject
keywords
Business model innovation for sustainability, evolutionary paths of capabilities, large incumbent firms, stakeholder expectations
in
International Journal of Innovation Management
volume
26
issue
5
article number
2240006
publisher
World Scientific Publishing
external identifiers
  • scopus:85133908582
ISSN
1363-9196
DOI
10.1142/S1363919622400060
language
English
LU publication?
yes
id
0635e7fc-df2a-4d52-b0ce-3bb93a5c7c94
date added to LUP
2022-08-30 16:53:02
date last changed
2024-01-18 13:16:44
@article{0635e7fc-df2a-4d52-b0ce-3bb93a5c7c94,
  abstract     = {{<p>Many studies in traditional business model (BM) literature acknowledge that it is hard for incumbent firms to change their business models, a finding echoed in the business model innovation for sustainability (BMIfS) literature. Large incumbent firms often lack or have weak capabilities needed for sustainability-driven business model innovation. This paper addresses how capabilities for such innovation evolve in large incumbent firms. The research builds on a longitudinal case study in the energy utility industry, and on two theoretical frameworks advanced in previous literature: values-based business model innovation, and capability lifecycles. We conceptually propose a stage-based maturity model of BMIfS. Our model highlights three types of research contributions. First, we propose that the capability development underpinning BMIfS is a nonlinear process of distinct maturity stages. Second, the maturity stages have intermediate transformation junctures that the firm must go through. These junctures either change or initiate the conditions for capability development to be able to advance to the next BMIfS maturity level. Third, the shift in societal, regulatory, competitor, and customer expectations and interests triggers strategic decisions and early development of capabilities that start and push the firm into the transformation junctures.</p>}},
  author       = {{Wadin, Jessica Lagerstedt and Bengtsson, Lars}},
  issn         = {{1363-9196}},
  keywords     = {{Business model innovation for sustainability; evolutionary paths of capabilities; large incumbent firms; stakeholder expectations}},
  language     = {{eng}},
  number       = {{5}},
  publisher    = {{World Scientific Publishing}},
  series       = {{International Journal of Innovation Management}},
  title        = {{The Evolution of Capabilities Underpinning Business Model Innovation for Sustainability in Large Incumbent Firms}},
  url          = {{http://dx.doi.org/10.1142/S1363919622400060}},
  doi          = {{10.1142/S1363919622400060}},
  volume       = {{26}},
  year         = {{2022}},
}