What do Amazon, Netflix, and Vipps have in common? The success of these companies did not come because of a new technology or a new product they invented. Instead, they built their success on designing an innovative business model by redefining the traditional ways of creating, delivering and capturing value. If done successfully, the result of such business model innovation can redefine the "rules of the game" and in some cases disrupt entire industries.
Business model innovation in established firms involves changing the fundamental logic of how the firm does business and the value it creates for customers. While most established firms may not have such innovative ambitions, rapid market change, technological disruption, and unexpected competition pushes firms to rethink their traditional business models. This includes choices of how they can create, deliver, communicate, and capture value in a digital economy.
But what are the factors that contribute to successful business model innovation in the digital era? How can managers of an established company assess when it is time to change their business model and which direction they should take? To answer these questions, we need to develop a good understanding of the nexus between business models, digitalization, and innovation - and how to apply it in practice.