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Capability perspective of business model innovation: analysis in the software industry

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  • Risto Rajala
  • Mika Westerlund

Abstract

Prior research suggests that competitive advantages in environmental flux rely on a firm's capacity for innovation and adaptation. Specialisation in core competencies has increased the importance of developing business model-specific capabilities in technology-intensive industries like the software business. In addition to developing required capabilities internally, capabilities increasingly are being obtained beyond company boundaries from a network of business partners. In this study, we analyse capabilities in conjunction with four basic types of business model, using two dimensions drawn from the prior literature. These two dimensions are (1) degree of involvement in customer relationships and (2) level of homogeneity in offerings. Our findings indicate that different types of business model vary significantly in their emphasis on internally-developed versus externally-obtained capabilities. These findings pinpoint the essential capability profiles for business model innovation.

Suggested Citation

  • Risto Rajala & Mika Westerlund, 2008. "Capability perspective of business model innovation: analysis in the software industry," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 2(1), pages 71-89.
    • Handle: RePEc:ids:ijbire:v:2:y:2008:i:1:p:71-89
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    Cited by:

    1. M. D. Rozaida* & Mahanum Daim, 2018. "The Role of Process Innovation between Organizational Capability and Software Project Success in Malaysian Public Sector," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 112-124:4.
    2. Gianita BLEOJU & Alexandru CAPATINA, 2014. "Collaborative Innovation Through Adjusting Strategic Intelligence Capabilities On The Software Market," Network Intelligence Studies, Romanian Foundation for Business Intelligence, Editorial Department, issue 4, pages 173-182, November.
    3. Yue Zhang & Shukuan Zhao & Xiaobo Xu, 2016. "Business model innovation: an integrated approach based on elements and functions," Information Technology and Management, Springer, vol. 17(3), pages 303-310, September.
    4. Leminen, Seppo & Rajahonka, Mervi & Wendelin, Robert & Westerlund, Mika & Nyström, Anna-Greta, 2022. "Autonomous vehicle solutions and their digital servitization business models," Technological Forecasting and Social Change, Elsevier, vol. 185(C).

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