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.
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.:
- 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.
- David J. TEECE, 2008.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87
World Scientific Publishing Co. Pte. Ltd..
- 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.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- David J. Teece, 2003. "Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy," World Scientific Book Chapters,in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 2, pages 11-46 World Scientific Publishing Co. Pte. Ltd..
- 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.
- 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.
- 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.
- Hall, Bronwyn H. & MacGarvie, Megan, 2010. "The private value of software patents," Research Policy, Elsevier, vol. 39(7), pages 994-1009, September.
- Bronwyn H. Hall & Megan MacGarvie, 2006. "The Private Value of Software Patents," NBER Working Papers 12195, National Bureau of Economic Research, Inc.
- 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, April.
- 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.
- 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.
- 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.
- Pisano, Gary, 2006. "Profiting from innovation and the intellectual property revolution," Research Policy, Elsevier, vol. 35(8), pages 1122-1130, October.
- 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.
- B. Demil & X. Lecocq, 2010. "Business model evolution : in search of dynamic consistency," Post-Print hal-00572915, HAL.
- 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 419-451, 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.
- 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 253-258, May.
- 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.
- 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.
- 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.
- 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, September.
- Bronwyn H. Hall, 2009. "Business and Financial Method Patents, Innovation, and Policy," NBER Working Papers 14868, National Bureau of Economic Research, Inc.
- 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).
- Teece, David J., 2006. "Reflections on "Profiting from Innovation"," Research Policy, Elsevier, vol. 35(8), pages 1131-1146, October.
- 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.
- David J. Teece, 1980. "The Diffusion of an Administrative Innovation," Management Science, INFORMS, vol. 26(5), pages 464-470, May.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- 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.
- 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. Full references (including those not matched with items on IDEAS)
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: (Dana Niculescu)
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.