Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance
The emergent business model literature, revolving mainly around the mechanisms through which new business models create and deliver value, has left the value capture challenge under-explored. This paper examines how an incumbent firm profits from business model innovation through the study of Pay-As-You-Drive auto insurance. Although business models do not warrant formal intellectual property (IP) protection, their constituent components (e.g. business methods and brands) often do. Drawing on the profiting-from-innovation framework, we find that formal and strategic IP protection methods play complementary roles. Initially, formal IP rights are used primarily as a defensive strategy, as vehicles for packaging and trading know-how, and most importantly as a means of “buying time” to build specialised complementary assets. Long-term competitiveness, however, depends on whether the innovator builds a strong position in specialised complementary assets and is capable of reconfiguring them over time in line with changes in the market environment. Thus, we explicate the complex mechanism and dynamic capability for capturing value from business model innovation.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Denis, David J., 1994. "Organizational form and the consequences of highly leveraged transactions: Kroger's recapitalization and Safeway's LBO," Journal of Financial Economics, Elsevier, vol. 36(2), pages 193-224, October.
- Doganova, Liliana & Eyquem-Renault, Marie, 2009. "What do business models do?: Innovation devices in technology entrepreneurship," Research Policy, Elsevier, vol. 38(10), pages 1559-1570, December.
- Stefan Wagner, 2008.
"Business Method Patents In Europe And Their Strategic Use—Evidence From Franking Device Manufacturers,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 17(3), pages 173-194.
- Stefan Wagner, 2004. "Business Method Patents in Europe and their Strategic Use – Evidence from Franking Device Manufacturers," Law and Economics 0410003, EconWPA.
- Wagner, Stefan, 2006. "Business Method Patents in Europe and their Strategic Use - Evidence from Franking Device Manufacturers," Discussion Papers in Business Administration 1265, University of Munich, Munich School of Management.
- Teece, David J., 1993.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 22(2), pages 112-113, April.
- Teece, David J., 1986. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 15(6), pages 285-305, December.
- Bronwyn H. Hall & Megan MacGarvie, 2006.
"The Private Value of Software Patents,"
NBER Working Papers
12195, National Bureau of Economic Research, Inc.
- Bronwyn H. Hall, 2009.
"Business And Financial Method Patents, Innovation, And Policy,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 56(s1), pages 443-473, 09.
- Hall, Bronwyn H., 2010. "Business and financial method patents, innovation, and policy," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Bronwyn H. Hall, 2009. "Business and Financial Method Patents, Innovation, and Policy," NBER Working Papers 14868, National Bureau of Economic Research, Inc.
- S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
- David J. Teece, 1980. "The Diffusion of an Administrative Innovation," Management Science, INFORMS, vol. 26(5), pages 464-470, May.
- McGahan, Anita M. & Silverman, Brian S., 2006. "Profiting from technological innovation by others: The effect of competitor patenting on firm value," Research Policy, Elsevier, vol. 35(8), pages 1222-1242, October.
- Arora, Ashish & Fosfuri, Andrea & Gambardella, Alfonso, 2001. "Markets for Technology and Their Implications for Corporate Strategy," Industrial and Corporate Change, Oxford University Press, vol. 10(2), pages 419-51, June.
- Henry Chesbrough & Richard S. Rosenbloom, 2002. "The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 529-555, June.
- Rod Coombs & Mark Harvey & Bruce S. Tether, 2003. "Analysing distributed processes of provision and innovation," Industrial and Corporate Change, Oxford University Press, vol. 12(6), pages 1125-1155, December.
- Bruce Tether, 2005. "Do Services Innovate (Differently)? Insights from the European Innobarometer Survey," Industry and Innovation, Taylor & Francis Journals, vol. 12(2), pages 153-184.
- Josh Lerner, 2002. "Where Does "State Street" Lead? A First Look at Finance Patents, 1971 to 2000," Journal of Finance, American Finance Association, vol. 57(2), pages 901-930, 04.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- Gillan, Stuart L. & Kensinger, John W. & Martin, John D., 2000. "Value creation and corporate diversification: the case of Sears, Roebuck & Co," Journal of Financial Economics, Elsevier, vol. 55(1), pages 103-137, January.
- Wesley M Cohen & Richard R Nelson & John P Walsh, 2003.
"Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (Or Not),"
Levine's Working Paper Archive
618897000000000624, David K. Levine.
- Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
- Teece, David J., 2006. "Reflections on "Profiting from Innovation"," Research Policy, Elsevier, vol. 35(8), pages 1131-1146, October.
- Amara, Nabil & Landry, Réjean & Traoré, Namatié, 2008. "Managing the protection of innovations in knowledge-intensive business services," Research Policy, Elsevier, vol. 37(9), pages 1530-1547, October.
- Ashish Arora & Marco Ceccagnoli, 2006. "Patent Protection, Complementary Assets, and Firms' Incentives for Technology Licensing," Management Science, INFORMS, vol. 52(2), pages 293-308, February.
- Jacobides, Michael G. & Knudsen, Thorbjorn & Augier, Mie, 2006. "Benefiting from innovation: Value creation, value appropriation and the role of industry architectures," Research Policy, Elsevier, vol. 35(8), pages 1200-1221, October.
- Austin, David H, 1993. "An Event-Study Approach to Measuring Innovative Output: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 83(2), pages 253-58, May.
- Pisano, Gary, 2006. "Profiting from innovation and the intellectual property revolution," Research Policy, Elsevier, vol. 35(8), pages 1122-1130, October.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:42:y:2013:i:1:p:101-116. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.