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Business model innovation and competitive imitation: The case of sponsor‐based business models

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  • Ramon Casadesus‐Masanell
  • Feng Zhu

Abstract

This paper provides the first formal model of business model innovation. Our analysis focuses on sponsor‐based business model innovations where a firm monetizes its product through sponsors rather than setting prices to its customer base. We analyze strategic interactions between an innovative entrant and an incumbent where the incumbent may imitate the entrant's business model innovation once it is revealed. The results suggest that an entrant needs to strategically choose whether to reveal its innovation by competing through the new business model, or conceal it by adopting a traditional business model. We also show that the value of business model innovation may be so substantial that an incumbent may prefer to compete in a duopoly rather than to remain a monopolist. Copyright © 2012 John Wiley & Sons, Ltd.

Suggested Citation

  • Ramon Casadesus‐Masanell & Feng Zhu, 2013. "Business model innovation and competitive imitation: The case of sponsor‐based business models," Strategic Management Journal, Wiley Blackwell, vol. 34(4), pages 464-482, April.
    • Handle: RePEc:bla:stratm:v:34:y:2013:i:4:p:464-482
    DOI: 10.1002/smj.2022
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    1. Janusz Bąk & Grzegorz Baran, 2025. "Słabe sygnały innowacji zakłócających tradycyjne modele biznesowe edukacji akademickiej," Nowoczesne Systemy Zarządzania. Modern Management Systems, Military University of Technology, Faculty of Security, Logistics and Management, Institute of Organization and Management, issue 1, pages 33-58.
    2. Rachael L Lewis & Gillian McAllister & David A Brown & Olivia Rawlings-Way & Nicole C Sutton & Celina McEwen & Deborah Parker & Nelson Ma, 2026. "Set up to fail: Explaining systemic problems in the business model of in-home aged care," Australian Journal of Management, Australian School of Business, vol. 51(1), pages 117-146, February.
    3. Nan Wang & Zihan Tang & Xiaoyan Zhang & Zimeng Wu, 2026. "Leading or Following? How Boundary-Spanning Search Affects Business Model Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 1178-1212, February.
    4. Xiu‐e Zhang & Yijing Li & Xinyu Teng, 2025. "How does green entrepreneurial orientation improve enterprises' sustainable performance? Evidence from agricultural sector in China," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 34(4), pages 1255-1277, October.
    5. Salmerón, Jose Piñera & Valle, Raquel Sánz & Molina-Castillo, Francisco-Jose, 2025. "Beyond borders: Unraveling the tapestry of export performance through business model innovation, open innovation, and organisational agility," Technovation, Elsevier, vol. 144(C).
    6. Mark Loon & Xiaohong Iris Quan, 2021. "Theorising business model innovation: An integrated literature review," Australian Journal of Management, Australian School of Business, vol. 46(3), pages 548-577, August.
    7. Camilla Aarøen & Marcus Selart, 2025. "Opportunities, Threats, and Strategic Choice: The Modifying Role of Emotion," Administrative Sciences, MDPI, vol. 15(9), pages 1-17, August.
    8. Valentina Butmalai & Nicoleta Cristache & Alina-Florentina Saracu & Irina-Olimpia Susanu & Cosmin Matis & Tiberius-Iustinian Stanciu, 2025. "Implementation of Imitation Strategies in the Innovative Behavior of Companies: Bibliometric Analysis," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 18-24.
    9. Yang Li, 2025. "Literature Review on Business Model Innovation: Digital Technology Perspective and Suggestions for Future Research," SAGE Open, , vol. 15(2), pages 21582440251, June.
    10. Prakash Kumar Gautam & Dhruba Kumar Gautam & Prem Prasad Silwal, 2025. "Business Model Innovation and Firm Performance of SMEs During the COVID-19 Pandemic: Test of Serial Mediation Model," SAGE Open, , vol. 15(2), pages 21582440251, May.
    11. Vincent Lefrere & Logan Warberg & Cristobal Cheyre & Veronica Marotta & Alessandro Acquisti, 2026. "Does Privacy Regulation Harm Content Providers? A Longitudinal Analysis of the Impact of the GDPR," Management Science, INFORMS, vol. 72(3), pages 1727-1747, March.
    12. Zhou, William C. & Sun, Sunny Li & Jia, Peiyi, 2025. "The subscription business model and new venture viability during a crisis," Journal of Business Research, Elsevier, vol. 200(C).
    13. Ramesh Krishnan & Phi Yen Phan & S. Navaneetha Krishnan & Renu Agarwal & Amrik Sohal, 2025. "Industry 4.0‐driven business model innovation for supply chain sustainability: An exploratory case study," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 276-295, January.
    14. Dimitris Manolopoulos & Michail S. Xenakis, 2025. "The Business Model Conundrum: A Systematic Theme-Centric Literature Review and Future Research Directions," SAGE Open, , vol. 15(2), pages 21582440251, May.

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