A review and research agenda in business model innovation

Abstract

Purpose: This paper aims to review and synthesise the recent advancements in the business model literature and explore how firms approach business model innovation. Design/methodology/approach: A systematic review of business model innovation literature was carried out by analysing 219 papers published between 2010 and 2016. Findings: Evidence reviewed suggests that rather than taking either an evolutionary process of continuous revision, adaptation and fine-tuning of the existing business model or a revolutionary process of replacing the existing business model, firms can explore alternative business models through experimentation, open and disruptive innovations. It was also found that changing business models encompasses modifying a single element, altering multiple elements simultaneously, and/or changing the interactions between elements in four areas of innovation: value proposition, operational value, human capital and financial value. Originality/value: The conflicting approaches exist in the literature on how firms change their business models, this review synthesises these approaches and provide a clear guidance as to the ways through which business model innovation can be undertaken.