Business Model Innovation: The Role of Experimentation

Abstract

This paper aims to explore how mature firms in the media industry adapt their business models when faced with disruptive external change. This is particularly challenging as it often involves questioning and renewing the mental models that have guided the management of the firm in earlier successful times. A case study approach was chosen to explore the adaptation process with a high level of richness. As focal market we have chosen the Danish newspaper market since this gives us the opportunity to observe in detail two media groups, which control 50% of the national newspaper market.

By working with archival data and interviews with key employees we succeed in tracing key developments between 2000 and 2011. Our findings show that mature firms use conscious strategic planning with regards to the value creation elements of the business model, but experimentation and random managerial responses for changing value proposition and value delivery elements. Overall, our empirical investigation leads us to propose guidelines on how to promote business model innovation.

Keywords: Business Model Innovation, Strategic Change, Media Industry, Industrial Change

JEL Classification: M1, L90, L82