While the Industrial Internet of Things (IIoT) holds much promise, there is a mismatch between its potential and companies capturing value from investments in IIoT. Indeed, even when companies ...recognize the value of IIoT, they do not necessarily know how to grasp related opportunities and are challenged in developing a suitable business model. Accordingly, to alleviate roadblocks to capturing value from IIoT, in this paper we address the challenge of identifying suitable business models in the age of the industrial metaverse. We do so through an extensive review and classification of main IIoT business model archetypes that are successful in practice. In particular, we conduct a content analysis of IIoT projects based on over 2000 articles in industry trade magazines and newspapers. Our analysis identifies four distinct business model archetypes in the context of IIoT, viz. IIoT digical, IIoT service-centered, IIoT data-driven, and IIoT platform, and further explores the challenges that need to be addressed to ensure that companies can capture value from their IIoT initiatives. We explore appropriate contexts for these business model archetypes, and, in doing so, we provide actionable guidance for industrial (marketing) managers seeking to position their IIoT offerings and maximize their value.
•We are the first to provide evidence of successful IIoT business models in practice.•Our analysis identifies four distinct IIoT business model archetypes.•We identify the challenges and appropriate contexts associated with IIoT business models.•We provide actionable guidance for (marketing) managers in the age of the industrial metaverse.
Ever since the branching of the sustainable and circular literature on business models of the late 2000s and early 2010´s, academia´s, businesses and societies have been experimenting with how to ...measure green business models. Green Business Model design—creating, capturing, delivering, receiving and consuming TO BE Business Models, Business Model Reconfiguration—focusing on changing AS IS Business Models into becoming or being green and Green Business Model Development—focusing on the tactical parameters of Green Business Models are 3 very different areas of measuring green related to business models and business model innovation. Several tools and actions can in these cases be taken into consideration, when measuring Green Business Models and Green Business Model Innovation. However, it seems as if there is a gap in literature and practice on how to really measure these Green BM Parameters. More specifically—How to measure green related to business models and How to measure green related to business model innovation. None seems yet to be able to measure green business models in real time and none seems to offer green business model measurement on all Green Business Model Parameters in symbiosis with monetary business model parameters. One of the reasons is that there is no clear definitions of green business model parameters although numerous green certificates exist, and several consultancies capitalise heavily on the billion dollar green business model certificate ecosystem for measuring and validating transformation of “AS IS” and “TO BE” business model ecosystems, businesses and their related business models into green. Most definitions and certificates also seem to be pure static and adapted as copies of former iso measurement standards. Very few offer and use advanced technologies to measure the green business model parameters in real-time. Further there is a lack of advanced measurement technologies that are able to measure on all green business model parameters within internet time together with monetary business model parameters. The paper presents some preliminary work on green business model measuring based on data from 240 SME businesses and reports on some preliminary work on a Green Business Model Dashboard in the EU Interreg, Kask GREENBIZZ project aimed at measuring—How green a business and its related business models really are?—and in real time.
The circular economy is promoted as a contributor to sustainable development; however, the process of circular business model innovation remains under‐explored to date, hindering its implementation. ...Dynamic capabilities research provides a theoretical perspective to explore how incumbent firms can innovate in rapidly changing environments. An abductive qualitative research is done through an exploratory multiple case study on 10 incumbents that implemented a circular business model innovation. We identify 26 practices, aggregated in 12 micro‐foundations of the dynamic capabilities of sensing, seizing, and reconfiguring. By integrating the few empirical studies characterizing dynamic capabilities for sustainability‐oriented business model innovation, we offer a comprehensive framework of 33 practices. This study proposes that the most relevant practices for circular business model innovation processes are adopting a lifecycle perspective, employing sustainability‐oriented instruments, ideating sustainable value propositions, developing a sustainability strategy and culture, and engaging and coordinating stakeholders in the business ecosystem. We also suggest seven particularly relevant practices for long‐term business model transformations (e.g., top management commitment), four for innovations focused on short and medium loops of the circular economy (e.g., early customer engagement), and four for long loops (e.g., business ecosystem coordination). This study corroborates and expands recent research on dynamic capabilities for sustainability‐oriented innovation and provides practitioners with a set of 33 skills, processes, procedures, and activities to be prioritized to successfully innovate their business models for the circular economy.
Purpose
Circular business models can improve resource use in a financially and environmentally feasible way. However, companies struggle to choose among the vast variety of ways to achieve ...circularity within a business model. The purpose of this paper is to offer a pragmatic guide for making strategic decisions on circular business models.
Design/methodology/approach
This paper develops a conceptual model of six different strategic approaches to circular business models and provides examples to business cases and practice to illustrate these.
Findings
This study identifies two critical strategy choices companies should make. First, an innovation strategy addresses the extent to which circularity is achieved with internal or external stakeholders. Second, a resource strategy addresses how companies achieve circularity by narrowing, slowing or closing resource loops. Using examples from business practice, this study illustrates how the combinations of these two strategies can be used to design competitive circular business models. Key managerial questions are also identified to help decide upon a feasible strategy for circular business model innovation.
Originality/value
While different types of circular business models have been described, it is less clear what the strategic choices are that companies need to make to find feasible business cases for circularity in terms of value proposition, value creation and delivery and value capture. This study outlines these through a “circular business model strategy framework”.
Digital transformation is requiring companies to rethink and innovate their business models (BMs). However, small- and medium-sized enterprises (SMEs) have scarce time and resources for experimenting ...with their BMs and implementing new strategies. This paper examines whether SMEs that undergo digital transformation perform better if they allocate more resources for BM experimentation and engage more in strategy implementation. An empirical study was conducted on 321 European SMEs that actively use social media, big data, and information technology to innovate their BMs. Furthermore, structural equation modelling showed positive overall firm performance effects of more resource allocation to BM experimentation and more engagement in practices of strategy implementation. These effects were mediated by BM experimentation practices and company innovativeness. Moreover, fuzzy-set qualitative comparative analysis (fsQCA) revealed the presence of equifinality by identifying different configurations in which these antecedent conditions affect overall firm overall performance. The results of two methodological approaches showed that SMEs may take different routes to improve their performance when digital transformation is changing their BM. This paper is one of the first to analyse how SMEs can handle the impact of digitalization by spending more time and effort on innovating their BMs. Practical and policy implications are discussed.
•Understanding how firms experiment with business model innovation.•Understanding how strategy implementation in a business logic affect the performance of business model innovation.•Understanding how business model innovation is taking place in organization practices.•How strategies are implemented in the business logic.•Resources for business model experimentation impact business performance.
Equipment manufacturers are currently utilizing new digital technologies such as the Internet of Things (IoT), Artificial Intelligence, or Big Data, for new digital offerings. However, these ...offerings seldom enhance revenue, because companies struggle with business model (BM) dynamics. By analyzing 27 companies through an explorative case-study approach, the authors consider how companies can successfully achieve revenue enhancement through digital offerings. The result is a threefold framework for revenue enhancement through digital offerings. First, this framework distinguishes between three phases of BM dynamics: 1) augmenting products through a “hardware plus” logic, 2) developing a portfolio of multiple logics for creating customer value, 3) integrating this portfolio through platform logic. Second, the framework emphasizes that three barriers, which we refer to as confidence, mixing, and collaboration barrier, limit the progress from Phases 1 to 3. Third, the framework reveals that each phase contains certain modifications of BM components. In the first phase, companies adapt their BM components slightly, so as to advance toward a “hardware plus” logic. In the second phase, companies embrace more radical BM innovations in order to convert services into an outcome-based BM and develop a new software subscription BM. In the third phase, companies modify BM components in order to integrate the BMs internally and to open them up for external collaboration partners.
•We explore how equipment-manufacturing companies can successfully achieve revenue enhancement through digital offerings and we develop a threefold framework.•Our framework distinguishes between three phases of BM dynamics: 1) augmenting products through a “hardware plus” logic, 2) developing a portfolio of multiple logics for creating customer value, 3) integrating this portfolio through platform logic.•We emphasize three barriers limiting the progress from phases 1 to 3, which we refer to as confidence, mixing, and collaboration barrier.•The framework reveals that each phase contains certain modifications of BM components.•Our findings enhance the multifaceted nature of BM dynamics and the interplay between holistic business logic, management cognition and BM components.
Business model (BM) innovation for sustainability is hampered by a lack of tools for environmental assessment and guidance at the BM level. Conventional life cycle assessment (LCA) neglects the ...economic and socio‐technical mechanisms within a BM, and tools based on the BM canvas (BMC) cannot provide recommendations substantiated by environmental data. Here, a new method, BM‐LCA, is applied to a case comparing the selling and renting of jackets, using profit as basis of comparison. Results identify how business parameters influence environmental performance, permitting analysis for decoupling within a business practice. This is made possible by the unique way the method links physical life cycle and the monetary flows of a BM. Usefulness of BM‐LCA is discussed relative to BM innovation, business strategy and similar tools. BM‐LCA provides insights into a broad range of BM elements and emerges as useful for business strategy. By measuring BM environmental performance, it helps determine what BM to compete with and support critical analysis of business against greenwashing. BM‐LCA also enables identification of BM elements in greatest need of environmental innovation. BM‐LCA appears as a promising tool for guiding business companies towards sustainability, filling a space between LCA and BMC. The method offers a practical way for business and LCA experts to merge their respective knowledge.
•Electric vehicle batteries provide new circular business opportunities.•Multi-stakeholder collaboration is key to deriving a win–win–win situation.•Firms lack early support for identifying and ...mapping circular opportunities.•It proposes a multi-stakeholder framework for circular business model innovation.•The framework mapped circular business opportunities in a bus battery value chain.
Electric vehicle (EV) batteries provide new business opportunities through circularity, but identifying these opportunities requires multi-stakeholder collaboration considering the interests of stakeholders, the environment, and society. However, circular business model frameworks to support and guide firms in identifying and mapping multidirectional value in the early phases of designing new circular business models are lacking. Thus, this research proposes a framework that could support stakeholders in the EV battery value chain in identifying and mapping circular business opportunities and multidirectional value among stakeholders in order to generate a win–win–win situation in the value-creation process. The proposed framework for multi-stakeholder circular business model innovation consists of four phases—namely, initiation, ideation, testing, and implementation—subdivided into eight steps to address key challenges facing firms and encourage discussions on shared values and visions among all stakeholders in the early phases of designing the circular business model.
•We find that integrating digital technologies in business models affects organizational path dependence.•We find that the growing integration of digital technologies into business models can help to ...break path-dependent behavior and escape lock-ins.•We provide a nuanced perspective on path dependence's resource- and cognition-based foundations and their interplay.•Detailed account of the emergence of connected car business models from 2007 until 2017.•We distil four connected car business model archetypes and show how digital business models emerge.
Proliferating digitalization affects the evolution of business models across contexts and challenges firms’ established innovation trajectories. Prior work on organizational path dependence suggests that firms experience decreasing option spaces over time and ultimately arrive at lock-in situations that prevent them from reacting to changing environmental conditions. Contemporary business practice, however, challenges these assumptions, as firms—even industrial-age incumbents—appear to be able to escape lock-ins and restore choices. One potential explanation for this could be the flexible nature of digital technologies that are increasingly integrated into business models during digitalization. To explore how and why this process affects organizational path dependence, we conducted a longitudinal multiple case study on connected car business models. We derive four business model archetypes adopted by different companies in the automotive industry and by new entrants, and we describe their evolution over time. We find that the growing integration of digital technologies into business models increases the number of possible pathways and can help to break path-dependent behavior. Based on our findings, we challenge and extend established knowledge on organizational path dependence with regard to key tenets, such as initial conditions and lock-ins, and provide a nuanced perspective on path dependence's resource- and cognition-based foundations.
This research explores the moderating role of Enterprise Resource Planning (ERP) in (Business Model (BM) innovation by comparing two groups of Small and Medium-sized Enterprises (SMEs) that are still ...in the process of considering adoption of ERP or already have implemented ERP. In particular, the aim is to see whether ERP enables or hampers the relationship between BM experimentation, i.e. the process of BM innovation, and BM performance. An important mediator, with a focus on downstream value delivery and creation, is the novelty of the BM in question.
This research is based on a large quantitative study among Spanish firms that are engaged in BM innovation activities and in different phases of implementing ERP. A representative sample of 208 Spanish firms engaged in Business Model Innovation from different sectors was used to collect data, which was analysed using heterotrait-monotrait (HTMT) for scaling and Structural Equation Modelling (SEM) for model testing.
Quantitative findings show that there is a direct positive impact of BM experimentation on BM performance for firms that did not implement an ERP, while downstream novelty leads to improved value capture due to increased efficiency and the associated cost reduction. By contrast, firms with ERP show a better performance, depending on the degree of the downstream novelty of the BM.
There is no previous research exploring the moderating role of ERP in BM Innovation for SMEs. This is the first study to examine whether BM experimentation affects BM performance and value capturing, as mediated by BM novelty and moderated by implementation by ERP.
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