Why Intended Business Model Innovation Fails to Deliver: Insights from a Longitudinal Study in the German Smart Energy Market

Abstract

This paper aims to explore whether intended business model innovation (BMI) activities enhance exploration capabilities of incumbent firms. We report findings from a longitudinal study that spans from 2010 to 2014. We find that even though incumbent firms generated 21 generic business models in 2010, only one has been successfully implemented by incumbents by February 2014. The majority has been pioneered by new entrants. These findings suggest that intended BMI activities can only partly contribute to overcoming the challenges associated with exploration. While evidence suggests that they are effective in overcoming some cognitive challenges, a second set of cognitive challenges and all action-level challenges remain.

Keywords: Intended business model innovation, new market exploration, longitudinal data, collaborative business modeling (CBM), smart energy