Measuring Business Model Innovation: Conceptualization, Scale Development, and Proof of Performance

Business model innovation is a topic that has received much attention from academia as well as from business practice. After extensive research on the definition and conceptualization of the concept and publication of many case-based results, recently scholars have been calling for more generalizable results, large-scale investigations and greater empirical sophistication. Despite the great importance of measuring business model innovation for various purposes, a validated measurement scale is still not available. I fill this gap by systematically developing a new scale for business model innovation. I follow a rigorous scale development approach to ensure validity and reliability. Specifically, I collected two large-scale samples of 126 and 232 firms to specify and assess the scale. As a result, I provide a hierarchical three-level scale for measuring business model innovation. At the first level, 41 reflective items are provided to measure ten subconstructs of business model innovation. These can be used as formative measures of three dimensions of business model innovation at the second level, namely value creation innovation, value proposition innovation and value capture innovation. At the third level, these three dimensions form the metaconstruct of business model innovation.

[1]  R. Sanchez.  Strategic flexibility in product competition , 1995 .

[2]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[3]  Frans van den Bosch,et al.  How does business model innovation influence firm performance: the effect of environmental dynamism , 2014 .

[4]  Detmar W. Straub,et al.  Common Beliefs and Reality About PLS , 2014 .

[5]  Christian Homburg,et al.  The loss of the marketing department’s influence: is it really happening? And why worry? , 2015 .

[6]  Gaby Odekerken-Schröder,et al.  Using PLS path modeling for assessing hierarchial construct models: guidelines and impirical illustration , 2009 .

[7]  H. J. Smith,et al.  The power of business models , 2005 .

[8]  W. Bearden,et al.  Consumer Self‐Confidence: Refinements in Conceptualization and Measurement , 2001 .

[9]  Vincent Mangematin,et al.  Business models: A challenging agenda , 2013 .

[10]  D. Gann,et al.  The Effects of Culture and Structure on Strategic Flexibility During Business Model Innovation , 2012 .

[11]  D. Teece.  Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance , 2007 .

[12]  Catherine L. Wang,et al.  The development and validation of the organisational innovativeness construct using confirmatory factor analysis , 2004 .

[13]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[14]  Ramon Casadesus-Masanell,et al.  From Strategy to Business Models and onto Tactics , 2010 .

[15]  S. Winter,et al.  Replication as Strategy , 2001 .

[16]  John Hulland,et al.  Use of partial least squares (PLS) in strategic management research: a review of four recent studies , 1999 .

[17]  Biao Sun,et al.  The Fit between Technological Innovation and Business Model Design for Firm Growth: Evidence from China , 2014 .

[18]  Wayne D. Hoyer,et al.  The Customer Relationship Management Process: Its Measurement and Impact on Performance , 2004 .

[19]  Patrick Spieth,et al.  BUSINESS MODEL INNOVATION: TOWARDS AN INTEGRATED FUTURE RESEARCH AGENDA , 2013 .

[20]  Uli Eisert,et al.  Towards Systematic Business Model Innovation: Lessons from Product Innovation Management , 2012 .

[21]  Charlotta Windahl,et al.  Solution business models : transformation along four continua , 2013 .

[22]  Yves Pigneur,et al.  Clarifying Business Models: Origins, Present, and Future of the Concept , 2005, Commun. Assoc. Inf. Syst..

[23]  C. Baden‐Fuller,et al.  Business Models and Technological Innovation , 2013 .

[24]  A. Bock,et al.  The Business Model in Practice and its Implications for Entrepreneurship Research , 2011 .

[25]  Gilbert A. Churchill.  A Paradigm for Developing Better Measures of Marketing Constructs , 1979 .

[26]  Y. Doz,et al.  Embedding Strategic Agility A Leadership Agenda for Accelerating Business Model Renewal , 2010 .

[27]  R. Amit,et al.  The fit between product market strategy and business model: implications for firm performance , 2008 .

[28]  R. Schroeder,et al.  The impact of human resource management practices on operational performance: recognizing country and industry differences , 2003 .

[29]  Henk W. Volberda,et al.  Exploratory Innovation, Exploitative Innovation and Peformance: Effects of Organizational Antecedents and Environmental Moderators , 2006, Manag. Sci..

[30]  Kun-Huang Huarng,et al.  A two-tier business model and its realization for entrepreneurship , 2013 .

[31]  Dodo zu Knyphausen‐Aufseß,et al.  Top Management Teams, Business Models, and Performance of Biotechnology Ventures: An Upper Echelon Perspective , 2008 .

[32]  Cheryl Burke Jarvis,et al.  A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research , 2003 .

[33]  Michael H. Morris,et al.  The entrepreneur's business model: toward a unified perspective , 2005 .

[34]  Sven M. Laudien,et al.  Service-dominant logic and the business model concept: toward a conceptual integration , 2014 .

[35]  A. Parasuraman,et al.  The Behavioral Consequences of Service Quality , 1996 .

[36]  Susan Meyer Goldstein,et al.  Linking publicness to operations management practices: A study of quality management practices in hospitals , 2005 .

[37]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[38]  P. Trkman,et al.  Business Model: What it is and What it is Not , 2014 .

[39]  H. Chesbrough,et al.  The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin-Off Companies , 2002 .

[40]  R. Amit,et al.  The Business Model: Recent Developments and Future Research , 2011 .

[41]  Thomas Clauss,et al.  Business model innovation in the aviation industry , 2013 .

[42]  M. Sosna,et al.  Business Model Innovation through Trial-and-Error Learning , 2010 .

[43]  Martin Wetzels,et al.  Hierarchical latent variable models in PLS-SEM: guidelines for using reflective-formative type models , 2012 .

[44]  Dirk Schneckenberg,et al.  Business Model Innovation – State of the Art and Future Challenges for the Field , 2014 .

[45]  Patrick Spieth,et al.  BUSINESS MODEL INNOVATION AND STRATEGIC FLEXIBILITY: INSIGHTS FROM AN EXPERIMENTAL RESEARCH DESIGN , 2014 .

[46]  R. Amit,et al.  Value creation in E‐business , 2001 .

[47]  R. Bagozzi,et al.  On the evaluation of structural equation models , 1988 .

[48]  Scott Gallagher,et al.  Explaining Alliance Partner Selection: Fit, Trust and Strategic Expediency , 2007 .

[49]  R. Casadesus-Masanell,et al.  Business Model Innovation and Competitive Imitation: The Case of Sponsor-Based Business Models , 2013 .

[50]  R. Cooper,et al.  New Products: What Separates Winners from Losers? , 1987 .

[51]  Xavier Lecocq,et al.  Business Model Evolution: In Search of Dynamic Consistency , 2010 .

[52]  Robert McMurrian,et al.  Development and validation of work–family conflict and family–work conflict scales. , 1996 .

[53]  Kurt Matzler,et al.  Business model innovation : Coffee triumphs for Nespresso , 2013 .

[54]  Arun Rai,et al.  Interfirm Strategic Information Flows in Logistics Supply Chain Relationships , 2009, MIS Q..

[55]  Marko Sarstedt,et al.  PLS-SEM: Indeed a Silver Bullet , 2011 .

[56]  Marko Sarstedt,et al.  Do We Fully Understand the Critical Success Factors of Customer Satisfaction with Industrial Goods? - Extending Festge and Schwaiger’s Model to Account for Unobserved Heterogeneity , 2009 .

[57]  Youjae Yi,et al.  Customer value co-creation behavior: scale development and validation , 2013 .

[58]  Juha-Antti Lamberg,et al.  Corporate Business Model Transformation and Inter-Organizational Cognition : The Case of Nokia , 2013 .

[59]  R. Amit,et al.  The business model: A theoretically anchored robust construct for strategic analysis , 2013 .

[60]  James D. Westphal,et al.  Surveying the Corporate Elite: Theoretical and Practical Guidance on Improving Response Rates and Response Quality in Top Management Survey Questionnaires , 2006 .

[61]  S. Voelpel ‡,et al.  The wheel of business model reinvention: how to reshape your business model to leapfrog competitors , 2004 .

[62]  L. Melin,et al.  Dynamics of business models - strategizing, critical capabilities and activities for sustained value creation , 2013 .

[63]  D. Teece.  Business Models, Business Strategy and Innovation , 2010 .

[64]  W. D. Perreault,et al.  Reliability of Nominal Data Based on Qualitative Judgments , 1989 .

[65]  Heidi M. J. Bertels,et al.  The Three Faces of Business Model Innovation: Challenges for Established Firms , 2011 .

[66]  George Pohle,et al.  IBM's global CEO report 2006: business model innovation matters , 2006 .

[67]  Raphael Amit,et al.  Business Model Design: An Activity System Perspective , 2010 .

[68]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[69]  Marko Sarstedt,et al.  Editorial - Partial Least Squares Structural Equation Modeling: Rigorous Applications, Better Results and Higher Acceptance , 2013 .

[70]  Ramon Casadesus-Masanell,et al.  Business Model Evaluation: Quantifying Walmart's Sources of Advantage , 2015 .

[71]  Donald O. Neubaum,et al.  The Effect of Virtuous and Entrepreneurial Orientations on Microfinance Lending and Repayment: A Signaling Theory Perspective , 2015 .

[72]  H. Chesbrough.  Business Model Innovation: Opportunities and Barriers , 2010 .