A Critique of Business Model Innovation

This chapter puts forward that while the imperative of business model innovation (BMI) is having a prominent foothold in literature, the review suggests that it also has a dark side—with negative consequences. First and foremost, the process of BMI is full of uncertainty, risks, and ambiguity, and thereby unsurprisingly, many attempts at BMI fail and becoming more so. Second, many firms pursuing the BMI could not reap the benefit as competitors/new entrants copy the new business model and commercialize it in a more successful way. Finally, a number of BMIs that have been hailed as a success from the firm’s perspective produce greater negative consequences for broader stakeholders or society as a whole. With this phenomenon at hand, it urges a balanced view toward BMI and suggests a contingency perspective that BMI may not be always a good option to pursue or under certain contextual factors should be ignored.