Business Model Innovation

Research purposesTwo concepts of business model and dynamic capability have been undeniably brought to the forefront of business research and the significance of these two are increasingly acknowledged due to the importance of business models in formation and growth of the firms and critical role of dynamic capabilities in competiveness of today’s enterprises. These two concepts are fundamentally intertwined and both have lied at the heart of strategic operation of modern enterprises. In spite of this fact, there are still numerous unsettled perplexities faced by executives and researchers in dealing with dynamics of business models and coping with internal challenges as well as environmental forces aiming at crippling firms. Thus, this thesis proposes a new model: dynamic business model innovation, based on Teece’s dynamic capabilities framework(S-S-R model) and Bouwmann’s STOF business model, to better understand superior enterprise performance over time.Research methodsWe apply the dynamic business model innovation to identify and examine the dynamic business model creating sustainable competitive advantage in the context of Chinese telematics industry. And three cases were studied to illustrate the proposed model. They are Onstar of GM, G-Book of Toyota and Inkanet of Roewe. Moreover, in order to obtain more persuasive conclusions, we employ methods such as history data analysis, interviews and direct observations.Research findingsThrough the study we draw the conclusion that the innovation of business model can be dynamically divided into three parts:sensing opportunities, seizing opportunities and reconfiguration. And each part can be distinguished as four fields:service, technology, organization and finance. Firms can scan these four fields at each part to obtain their dynamic business model innovation.Practical implicationsThis study analyzed how to maintain competitive advantage in the context of Chinese telematics industry, and proposed some suggestions for the local auto manufacturers on obtaining its dynamic business model innovation and competitive advantage according to the characteristics and trends of Chinese telematics industry.Research limitedFirstly, although we investigated into the micro-foundations of each phase in our new model, critical design issues or successful factors still remains unidentified. Secondly, this study is confined to Chinese telematics industry. For other areas or industries, this may not be applicable, thus it needs further empirical study. Thirdly, Interview content may cause structural range restriction based on the crowd of interviewers.Originality/valueThis study proposed the model of dynamic business model innovation. The model analyzes business model innovation in three stages: sensing and shaping opportunities, seizing opportunities, and reconfiguration. And it distinguishes the micro-foundations of each stage into four fields:the service, technology, organization and finance. Nevertheless, the business model innovation is reviewed in Chinese telematics industry.