Achieving agility using business model stress testing
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RESEARCH PAPER
Achieving agility using business model stress testing Harry Bouwman 1,2 & Jukka Heikkilä 3 & Marikka Heikkilä 3 & Carlo Leopold 1 & Timber Haaker 1
Received: 31 January 2016 / Accepted: 22 December 2016 # The Author(s) 2017. This article is published with open access at Springerlink.com
Abstract Business Model (BM) Innovations aim at making systemic changes in the business logic of companies when they are bringing innovative products and services to the market. Companies should be sensitive to changes in their business environment and able to modify their BMs in an agile way. To assess the agility of BMI during specific market entry situations, this paper uses a method that stress tests the value proposition and the components of a BM against contingent uncertainties. We present three qualitative case studies of companies that differ in their market entry approach. Starting from their strategic orientation, these case companies’ stress test their Business models and BM components, using a scenario-based identification of uncertainties. The BM Stress Test method contributes to a quick understanding of the Responsible Editor: Hans-Dieter Zimmermann * Jukka Heikkilä [email protected] Harry Bouwman [email protected] Marikka Heikkilä [email protected] Carlo Leopold [email protected] Timber Haaker [email protected] 1
Delft University of Technology, Delft, The Netherlands
2
Åbo Akademi University, Turku, Finland
3
University of Turku, Turku, Finland
components their BM needs to monitor, reconsider, or improve. Such stress testing helps enhance business agility. The research contributes to market strategy and business modelling research by introducing BM Stress Testing as a new method that can achieve and maintain agility regarding BM uncertainties. Keywords Business model . Business model innovation . Business modelling . Market entry . Agility . Stress testing JEL Classification L10 . L11 . M11 . M13 . M15 . M31 . O31
Introduction Business Models (BMs) are acknowledged as effective instruments for strategy execution (Casadesus-Masanell and Ricart 2010; Cortimiglia et al. 2016; DaSilva and Trkman 2013; Teece 2010; Zott and Amit 2010). They are combined with the designing, analyzing and implementing of new innovative concepts that can enhance the competitiveness of companies or business networks (Bock & George 2014). New BM innovations (BMIs) can, for instance, be extensions of new technological inventions, new usages of existing technologies, or making the shift from a product to a service- oriented logistics. We thus define BMIs as systemic changes in the business logic of companies when creating and capturing value for both customers and companies. In essence, business logic describes how a single firm, or a network of firms, by collaborating on a strategic (eco-system) and operational (process) level, can bring innovative products and services (or bundles of products) to the marketplace successfully (e.g. Cortimiglia et al. 2016). Even though it is acknowledged that comp
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