Crafting digital business models: an ongoing process of innovation and imitation

This chapter explores how digital business models come into being and how they develop over time. A focus on how digital business models form is important for theory and practice because managers and entrepreneurs cannot stop at identifying a particular digital business model design but must inevitably deliver digital strategy by creating and constantly developing digital business models. The chapter opens with a review of the two principal ways to design digital business models identified in prior literature: business model innovation and imitation. Both business model innovation and imitation are viable ways to form business models in the digital economy, and they are not mutually exclusive. Rather, they may be conceived as two ends of a continuum along which real-world strategies to design digital business models lie. This chapter integrates emerging and established research to develop this notion and explores strategies along the spectrum. These include pioneer, architect, blender, adapter, and copycat. The chapter also discusses some basic principles and underlying mechanisms behind these strategies. Finally, an agenda for future research on strategies to design digital business models is proposed.