Introduction

Scholars and consultancies increasingly consider business model innovation (BMI) as a means towards profitable firm growth. Innosight, a global consultancy specialized in innovation, analyzed that from the twenty-six firms founded since 1984 that have entered the Fortune 500 between 1997 and 2007, more than half did so through innovative business models; among these are firms such as eBay, Starbucks, Qualcomm and Google. Moreover, Innosight found that introducing an innovative business model may restructure entire industries and redistribute significant shareholder value. In the airline industry, for example, a major part of the market value is now accounted for by those airlines that have adopted the low-cost business model, once introduced by Southwest Airlines in the U.S. and Ryanair in Europe. The same holds true for the retail industry, in which discounters such as Target, Walmart and Amazon meanwhile accumulate much more market value than traditional department stores. In terms of business model innovators, scholars note that new business models are mostly launched by new entrants as opposed to established industry players who, in the face of organizational rigidities, are said to be focused on executing their existing business model for too long.