Summary Business Model Innovation
2025-2026
Papers included in this summary: Markides (2023), De Cuyper, Clarysse & Wright (2024), Leppänen,
George, Alexy (2023), Bivona & Cruz (2021), Grewatsch, Kennedy & Bansal (2023), Casadesus-
Masanell & Ricart (2011), Townsend et al. (2018), Scoblic (2020), Kapoor & Wilde (2022), Novelli & Spina
(2024), Snihur, Thomas & Burgelman (2023), Snihur, Zott, & Kiss (2025)
Remember all authors and key points of the papers, also remember the authors mentioned in the slides.
No need to remember method or very explicit results.
Lecture 1
Lecture 2 - Analyze - Contingencies & Complexities
Lecture 3 - Analyze - Creating a systems perspective on BMI
Lecture 4 - Anticipate - Uncertainty
Lecture 5 - Advice
Exam Structure
Lecture 1
Course Core Assumptions:
1. Organizations have to create value now, and search for new opportunities to create value in the
future
a. Competency trap: only focussing on now and not ready for changes in the environment in the
future
b. Keep searching for new opportunities: innovate business model
From current to New Business Model:
Analyze: Current business model
Anticipate: Future business model (look at different futures in 20/30 years)
Advise: New business model (robust combination of current model with future possibilities)
Business Model: system of three key interdependent activities: (Markides 2023)
Who to target as customers
What to offer these customers
How to serve these customers
what value-chain activities to put in place to allow the firm to deliver value to these customers in
an efficient manner
value-chain activities: steps a company takes to create a product or service
Example categories of business models (can blend):
Product sales model: Retail: your organization produces or purchases physical goods and sells
them to customers → tangible: buying products (butcher, supermarket)
Consultancy Model: Services: your organization offers its expertise to other companies or
individuals in exchange for compensation → intangible: repair, consultant
Summary Business Model Innovation 1
, Subscriptions model: cars, bicycle (swapfiets), flowers each week, probably also regularly house
renting
Marketplace model: platform model: your organization acts as an intermediary between buyers and
sellers, earning money through commissions or transaction fees
purely the intermediary: amazon, bol, thuisbezorgd (does not make the food itself): buy from
certain supplier and platform takes a certain fee.
Franchise model: your organization grants a franchisee the right to use your organization’s name,
products, and processes in exchange for compensation
Licensing model: your organiation licenses intellectual property such as patents or copyrights, to
other organizations
Importance Business Models (BM): (Saebi, Lien, and Foss (2016))
BM is used as a basis for enterprise classification
Classifying businesses based on their BM
BM is seen as an antecedent(voorafgaand) of heterogeneity in firm performance
Different BMs can explain different performance in companies
BM is seen as a potential unit of innovation
Business model innovation (BMI) (Markides, 2023): BMI is the discovery of a new BM that is either new
to the world or new to the industry in which it is being introduced.
Business Model Canvas (BMC) (Alexander Osterwalder, 2005): how company creates value
Business Model Navigator: classifying BMI which WHAT WHO HOW VALUE
These models dont give:
Interaction between elements
Dynamic perspective (how does the business model perform over time?)
Choices and their consequences
→ The business model as choices and consequences
Business Model as a system: conceptualize the business model as a system of casually interrelated
variables that collectively determine the success or failure of BMIs
Lecture 2 - Analyze - Contingencies & Complexities
Markides (2023) Business Model Innovation
Institutional Contingencies: Onvoorziene omstandigheden
BMI has a robust, positive effect on firm performance across diverse conceptualization and
measures of BMI
However, the magnitude of this effect depends strongly on institutional context: certain cultural
dimensions and pro-market institutional settings amplify value creation from BMI, while other
dampen it.
Previous literature was mostly focussed on entrepreneurship than on big established firms, but it is
relevant for both. Previous literature is not useful for established firms because:
Summary Business Model Innovation 2
, 1. They have the same challenges, but a different context and face different realities so the
answers to these problems are different
2. They face additional challenges that start-up firms do not face (e.g. how to operate their existing
business model, while adopting a new (and often disruptive) business model at the same time,
or how to switch to different/new BM)
So the real question is not whether BMI works, but when it works:
When is BMI strategically viable for established firms?
BMI is often strategically attractive but dangerous for established firms because it creates
systemic tensions that cannot be solved by ‘best practices’ alone
The real difficulty for established firms is not discovering new business models, but managing
the strategic and organizational conflicts created by them. Because new business models often:
Cannibalize existing markets
Conflict with existing activities
Threaten internal incentives and power structures
Compete for resources with the core business
As a result, established firms often fail to innovate with new business models, even when they
understand them well.
However, the paper argues this is not necessarily a weakness:
Startups are good at discovering new models
Large firms are good at scaling them up
Therefore, firms can succeed by adopting or scaling innovations introduced by others.
Difference strategy and business model
Strategy: high level choices about (Positioning (cost vs differentiation), Market entry, Industry
scope, Geographic expansion)
the plan
Business model: activity configuration that implements the strategy
the system that executes the plan
Example:
strategy: be a low-cost airline
business model: standardized aircraft, no meals, secondary airports etc.
Markides view: analyzing business models provides new insights for strategy research
Companies can have the same strategy but perform differently due to different BMs, so the way
strategy is implemented matters.
First-mover advantages (FMAs): new entrants to the market benefit because incumbents are
structurally constrained
entrants: no legacy system, designs optimal BM from scratch
incumbent: must protect existing activity system, faces internal resistance, risks destroying its
main revenue stream
even if incumbents undestand the innovation, they often cannot respond effectiveley
Summary Business Model Innovation 3
, Competitive advantage does not only come from better products or technology, but also from
business model conflicts that limit competitors’ ability to imitate.
📌 Example: Low-cost airlines vs traditional airlines
Traditional model: hub-and-spoke networks, multiple aircraft types, meals and premium
services, travel agents
Low-cost model: single aircraft type, no meals, point-to-point routes, online booking,
quick turnarounds
If a traditional airline fully copied this model, it would:
undermine its premium brand
upset travel agent relationships
disrupt its hub system
This conflict explains why low-cost airlines grew quickly.
BMI is not just product innovation, process innovation or technological innovation: it changes how
the business works, not just what it sells. For example:
Targeting new customers
Changing value propositions
Redesigning value chains
Creating new revenue models
📌 Example: Enterprise Rent-a-Car differentiated itself by targeting a completely different
customer segment and operating model than traditional competitors like Hertz and Avis:
Customer focus: Replacement market (accident victims) instead of travelers
Location strategy: Downtown offices instead of airports
Distribution: Partnered with insurance companies and body shops rather than travel
agents
Service model: Brought cars to customers instead of waiting for pickup
This fundamentally different BM allowed Rent-a-car to grow from a startup in 1957 to
become the largest car rental company in North America in under 50 years.
Characteristics of BMI
1. Business model innovation (BMI) is challenging for established firms because the activities of
the new business model are often incompatible with the existing activities, creating three key
trade-offs:
Image inconsistencies: New activities may damage the company's reputation or brand
Coordination limits: Managing incompatible activities simultaneously is difficult
Activity incompatibility: A unique strategic position requires specific tailored activities that
may clash with alternative positions
Examples include airlines risking relationships with travel agents by selling online, or Fast-
moving consumer goods companies potentially damaging their brands by offering private labels.
Summary Business Model Innovation 4
2025-2026
Papers included in this summary: Markides (2023), De Cuyper, Clarysse & Wright (2024), Leppänen,
George, Alexy (2023), Bivona & Cruz (2021), Grewatsch, Kennedy & Bansal (2023), Casadesus-
Masanell & Ricart (2011), Townsend et al. (2018), Scoblic (2020), Kapoor & Wilde (2022), Novelli & Spina
(2024), Snihur, Thomas & Burgelman (2023), Snihur, Zott, & Kiss (2025)
Remember all authors and key points of the papers, also remember the authors mentioned in the slides.
No need to remember method or very explicit results.
Lecture 1
Lecture 2 - Analyze - Contingencies & Complexities
Lecture 3 - Analyze - Creating a systems perspective on BMI
Lecture 4 - Anticipate - Uncertainty
Lecture 5 - Advice
Exam Structure
Lecture 1
Course Core Assumptions:
1. Organizations have to create value now, and search for new opportunities to create value in the
future
a. Competency trap: only focussing on now and not ready for changes in the environment in the
future
b. Keep searching for new opportunities: innovate business model
From current to New Business Model:
Analyze: Current business model
Anticipate: Future business model (look at different futures in 20/30 years)
Advise: New business model (robust combination of current model with future possibilities)
Business Model: system of three key interdependent activities: (Markides 2023)
Who to target as customers
What to offer these customers
How to serve these customers
what value-chain activities to put in place to allow the firm to deliver value to these customers in
an efficient manner
value-chain activities: steps a company takes to create a product or service
Example categories of business models (can blend):
Product sales model: Retail: your organization produces or purchases physical goods and sells
them to customers → tangible: buying products (butcher, supermarket)
Consultancy Model: Services: your organization offers its expertise to other companies or
individuals in exchange for compensation → intangible: repair, consultant
Summary Business Model Innovation 1
, Subscriptions model: cars, bicycle (swapfiets), flowers each week, probably also regularly house
renting
Marketplace model: platform model: your organization acts as an intermediary between buyers and
sellers, earning money through commissions or transaction fees
purely the intermediary: amazon, bol, thuisbezorgd (does not make the food itself): buy from
certain supplier and platform takes a certain fee.
Franchise model: your organization grants a franchisee the right to use your organization’s name,
products, and processes in exchange for compensation
Licensing model: your organiation licenses intellectual property such as patents or copyrights, to
other organizations
Importance Business Models (BM): (Saebi, Lien, and Foss (2016))
BM is used as a basis for enterprise classification
Classifying businesses based on their BM
BM is seen as an antecedent(voorafgaand) of heterogeneity in firm performance
Different BMs can explain different performance in companies
BM is seen as a potential unit of innovation
Business model innovation (BMI) (Markides, 2023): BMI is the discovery of a new BM that is either new
to the world or new to the industry in which it is being introduced.
Business Model Canvas (BMC) (Alexander Osterwalder, 2005): how company creates value
Business Model Navigator: classifying BMI which WHAT WHO HOW VALUE
These models dont give:
Interaction between elements
Dynamic perspective (how does the business model perform over time?)
Choices and their consequences
→ The business model as choices and consequences
Business Model as a system: conceptualize the business model as a system of casually interrelated
variables that collectively determine the success or failure of BMIs
Lecture 2 - Analyze - Contingencies & Complexities
Markides (2023) Business Model Innovation
Institutional Contingencies: Onvoorziene omstandigheden
BMI has a robust, positive effect on firm performance across diverse conceptualization and
measures of BMI
However, the magnitude of this effect depends strongly on institutional context: certain cultural
dimensions and pro-market institutional settings amplify value creation from BMI, while other
dampen it.
Previous literature was mostly focussed on entrepreneurship than on big established firms, but it is
relevant for both. Previous literature is not useful for established firms because:
Summary Business Model Innovation 2
, 1. They have the same challenges, but a different context and face different realities so the
answers to these problems are different
2. They face additional challenges that start-up firms do not face (e.g. how to operate their existing
business model, while adopting a new (and often disruptive) business model at the same time,
or how to switch to different/new BM)
So the real question is not whether BMI works, but when it works:
When is BMI strategically viable for established firms?
BMI is often strategically attractive but dangerous for established firms because it creates
systemic tensions that cannot be solved by ‘best practices’ alone
The real difficulty for established firms is not discovering new business models, but managing
the strategic and organizational conflicts created by them. Because new business models often:
Cannibalize existing markets
Conflict with existing activities
Threaten internal incentives and power structures
Compete for resources with the core business
As a result, established firms often fail to innovate with new business models, even when they
understand them well.
However, the paper argues this is not necessarily a weakness:
Startups are good at discovering new models
Large firms are good at scaling them up
Therefore, firms can succeed by adopting or scaling innovations introduced by others.
Difference strategy and business model
Strategy: high level choices about (Positioning (cost vs differentiation), Market entry, Industry
scope, Geographic expansion)
the plan
Business model: activity configuration that implements the strategy
the system that executes the plan
Example:
strategy: be a low-cost airline
business model: standardized aircraft, no meals, secondary airports etc.
Markides view: analyzing business models provides new insights for strategy research
Companies can have the same strategy but perform differently due to different BMs, so the way
strategy is implemented matters.
First-mover advantages (FMAs): new entrants to the market benefit because incumbents are
structurally constrained
entrants: no legacy system, designs optimal BM from scratch
incumbent: must protect existing activity system, faces internal resistance, risks destroying its
main revenue stream
even if incumbents undestand the innovation, they often cannot respond effectiveley
Summary Business Model Innovation 3
, Competitive advantage does not only come from better products or technology, but also from
business model conflicts that limit competitors’ ability to imitate.
📌 Example: Low-cost airlines vs traditional airlines
Traditional model: hub-and-spoke networks, multiple aircraft types, meals and premium
services, travel agents
Low-cost model: single aircraft type, no meals, point-to-point routes, online booking,
quick turnarounds
If a traditional airline fully copied this model, it would:
undermine its premium brand
upset travel agent relationships
disrupt its hub system
This conflict explains why low-cost airlines grew quickly.
BMI is not just product innovation, process innovation or technological innovation: it changes how
the business works, not just what it sells. For example:
Targeting new customers
Changing value propositions
Redesigning value chains
Creating new revenue models
📌 Example: Enterprise Rent-a-Car differentiated itself by targeting a completely different
customer segment and operating model than traditional competitors like Hertz and Avis:
Customer focus: Replacement market (accident victims) instead of travelers
Location strategy: Downtown offices instead of airports
Distribution: Partnered with insurance companies and body shops rather than travel
agents
Service model: Brought cars to customers instead of waiting for pickup
This fundamentally different BM allowed Rent-a-car to grow from a startup in 1957 to
become the largest car rental company in North America in under 50 years.
Characteristics of BMI
1. Business model innovation (BMI) is challenging for established firms because the activities of
the new business model are often incompatible with the existing activities, creating three key
trade-offs:
Image inconsistencies: New activities may damage the company's reputation or brand
Coordination limits: Managing incompatible activities simultaneously is difficult
Activity incompatibility: A unique strategic position requires specific tailored activities that
may clash with alternative positions
Examples include airlines risking relationships with travel agents by selling online, or Fast-
moving consumer goods companies potentially damaging their brands by offering private labels.
Summary Business Model Innovation 4
