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Managing business model exploration in incumbent firms: A case study of innovation labs in European banks

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  • Sund, Kristian J.
  • Bogers, Marcel L.A.M.
  • Sahramaa, Meri

Abstract

Digital transformation provides opportunities for business model innovation (BMI). Yet, incumbents may face organizational barriers when exploring radically new business models. The management of these barriers therefore becomes of strategic importance to incumbent BMI. In order to identify key barriers and their management, we investigate challenges encountered by innovation labs in the retail banking industry. Based on the case of four major European banks, we find that innovation labs are constrained not only by existing resources and capabilities, but also by the need to satisfy both top management and managers in the core business units. They seek to do this by using integration mechanisms and by balancing incremental and radical innovation. With this study, we expand our understanding of barriers to radical BMI for incumbents, which has general implications for how managers can develop innovation processes to help their organization to engage effectively in BMI.

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  • Sund, Kristian J. & Bogers, Marcel L.A.M. & Sahramaa, Meri, 2021. "Managing business model exploration in incumbent firms: A case study of innovation labs in European banks," Journal of Business Research, Elsevier, vol. 128(C), pages 11-19.
    • Handle: RePEc:eee:jbrese:v:128:y:2021:i:c:p:11-19
    DOI: 10.1016/j.jbusres.2021.01.059
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    Cited by:

    1. Reuschl, Andreas J. & Deist, Maximilian K. & Maalaoui, Adnane, 2022. "Digital transformation during a pandemic: Stretching the organizational elasticity," Journal of Business Research, Elsevier, vol. 144(C), pages 1320-1332.
    2. Deist, Maximilian K. & McDowell, William C. & Bouncken, Ricarda B., 2023. "Digital units and digital innovation: Balancing fluidity and stability for the Creation, Conversion, and Dissemination of sticky knowledge," Journal of Business Research, Elsevier, vol. 161(C).
    3. Chamindika Weerakoon & Sarath S. Kodithuwakku, 2023. "Configurations of Business Model Innovation: Unpacking the Practice Adopted by Firms in an Emerging Market Context," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 32(1), pages 218-259, March.
    4. Ancillai, Chiara & Sabatini, Andrea & Gatti, Marco & Perna, Andrea, 2023. "Digital technology and business model innovation: A systematic literature review and future research agenda," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    5. Şimşek, Tolga & Öner, M Atilla & Kunday, Özlem & Olcay, Gökçen Arkalı, 2022. "A journey towards a digital platform business model: A case study in a global tech-company," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    6. Schubert, Torben & Ashouri, Sajad & Deschryvere, Matthias & Jäger, Angela & Visentin, Fabiana & Cunningham, Scott & Hajikhani, Arash & Pukelis, Lukas & Suominen, Arho, 2023. "The role of product digitization for productivity," MERIT Working Papers 2023-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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