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Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance

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  • Desyllas, Panos
  • Sako, Mari

Abstract

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.

Suggested Citation

  • Desyllas, Panos & Sako, Mari, 2013. "Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance," Research Policy, Elsevier, vol. 42(1), pages 101-116.
  • Handle: RePEc:eee:respol:v:42:y:2013:i:1:p:101-116
    DOI: 10.1016/j.respol.2012.05.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Miozzo, Marcela & Desyllas, Panos & Lee, Hsing-fen & Miles, Ian, 2016. "Innovation collaboration and appropriability by knowledge-intensive business services firms," Research Policy, Elsevier, vol. 45(7), pages 1337-1351.
    2. Patrick Spieth & Sabrina Schneider, 2016. "Business model innovativeness: designing a formative measure for business model innovation," Journal of Business Economics, Springer, vol. 86(6), pages 671-696, August.
    3. repec:wsi:ijimxx:v:21:y:2017:i:05:n:s1363919617400023 is not listed on IDEAS
    4. Helms, Thorsten, 2016. "Asset transformation and the challenges to servitize a utility business model," Energy Policy, Elsevier, vol. 91(C), pages 98-112.
    5. repec:eee:respol:v:47:y:2018:i:8:p:1367-1387 is not listed on IDEAS
    6. Charlotte Krychowski & Bertrand Quelin & Bulat Sanditov, 2017. "Experimenting business models with network effects : a real options perspective," Post-Print hal-01582498, HAL.
    7. Charlotte Krychowski & Bertrand Quelin & Bulat Sanditov, 2017. "Experimenting business models with network effects : a real options perspective," Grenoble Ecole de Management (Post-Print) hal-01582498, HAL.
    8. repec:spr:scient:v:113:y:2017:i:2:d:10.1007_s11192-017-2514-8 is not listed on IDEAS
    9. repec:spr:binfse:v:60:y:2018:i:3:d:10.1007_s12599-018-0532-6 is not listed on IDEAS
    10. Arash Najmaei, 2016. "Revisiting The Modularity-Performance Nexus: Business Model Innovation As A Missing Mechanism," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-41, October.
    11. repec:eee:techno:v:72-73:y:2018:i::p:46-59 is not listed on IDEAS
    12. repec:eee:transa:v:113:y:2018:i:c:p:243-258 is not listed on IDEAS
    13. Bilal Bourkha & Adam Dewitte & Jeremy Tantely Ranjatoelina, 2015. "Organiser l'imitation d'un business model innovant : quatre propositions pour les entreprises," Working Papers hal-01202625, HAL.
    14. repec:eee:transa:v:107:y:2018:i:c:p:20-34 is not listed on IDEAS
    15. Rayna, Thierry & Striukova, Ludmila, 2016. "From rapid prototyping to home fabrication: How 3D printing is changing business model innovation," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 214-224.

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