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Radical innovation of a business model - is business modelling a key to understand the essence of doing business?
University of Gävle.ORCID iD: 0000-0003-3323-907X
2016 (English)In: Competitiveness Review: an international business journal, ISSN 1059-5422, E-ISSN 2051-3143, Vol. 26, no 2, 1-16 p.Article in journal (Refereed) Published
Abstract [en]

Purpose“Business model” emerged fairly recently as an academic concept; competing with “sustainable strategic competitiveness”, “strategic fit” (Porter, 1996), and “dominant logic” (Prahalad & Bettis, 1986) to give key explanatory understanding of firm performance.This paper investigates key antecedents to the use of radical innovation of the business model of a service firm to achieve competitive advantage.

Design/methodology/approachThe article is based on action research, in which the re-engineering of a service business turned into radical innovation of the business model.

FindingsRadical innovation (conceived of as a new dominant logic) of the business model of a service firm is shown to give sustainable competitive advantage.It shows how fundamental the concept of business model is to understanding the nature of the business, and links it to fundamental academic discussion of recent decades around concepts such as “sustainable competitive advantage”, “structural capital” and “tacit knowledge”.

Research limitations/implicationsThis is based on a case and more research is needed to generalize the findings.

Practical implicationsIn contrast to the knowledge management and structural capital evangelization, much tacit knowledge cannot be converted to structural capital.

Originality/valueBusiness model is a central concept to understand business performance, but must not be conceived as all-encompassing. We give a model for what the concept should cover and contrast it to other important models.We show the role of tacit knowing in a business model.

Place, publisher, year, edition, pages
2016. Vol. 26, no 2, 1-16 p.
Keyword [en]
Business model, Competitive advantage, Fit, Tacit knowledge, Structural capital
National Category
Business Administration
Research subject
Economy, Marketing
Identifiers
URN: urn:nbn:se:lnu:diva-47086OAI: oai:DiVA.org:lnu-47086DiVA: diva2:867941
Available from: 2015-11-08 Created: 2015-11-08 Last updated: 2016-02-18Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf