Understanding business model innovation

Abstract

In Research and Development (R&D) projects, Business Model Innovation (BMI) is a challenging issue given the high degrees of uncertainty regarding technologies, products and markets. The purpose of this research is to investigate how business model exploration is facilitated with the use of business model tooling and what are the gaps in the current business model repository in supporting business model exploration as part of the BMI process. These gaps can be addressed in the design of future business model tooling. We do so by supporting the business model exploration within a specific complex setting, introducing changes in the business models, and evaluating their effects. For 12 months we actively participated in an R&D project funded by European Union focused on building a digital service that will improve mobility safety. We observed that business model exploration is an indispensable process when the value offering is not clearly defined, or when there are new business opportunities. Based on the observations, our recommendations regarding business model exploration are: (a) to start with an initial business model even if the final offering is not clear, (b) to create alternative business models and explore their potentials, and (c) use tools or practices that can contribute on the decision making regarding BMI.