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Business Model InnovationThe Organizational Dimension$
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Nicolai J Foss and Tina Saebi

Print publication date: 2015

Print ISBN-13: 9780198701873

Published to Oxford Scholarship Online: April 2015

DOI: 10.1093/acprof:oso/9780198701873.001.0001

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How Established Firms Exploit Disruptive Business Model Innovation

How Established Firms Exploit Disruptive Business Model Innovation

Strategic and Organizational Challenges

Chapter:
(p.123) 7 How Established Firms Exploit Disruptive Business Model Innovation
Source:
Business Model Innovation
Author(s):

Costas Markides

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198701873.003.0007

This chapter examines established firms that developed separate units to exploit the markets created by disruptive business model innovation and identifies the strategic and organizational challenges they face in doing so. The findings suggest that established players cannot succeed by simply adopting their disruptors’ (winning) business model in the new markets. Instead, they need to develop a business model which is different from the one they currently employ in the established market and also substantially different from the ones that disruptors use. Further, simply separating the new business model in a new unit is not enough; rather, while keeping it in a separate unit, the parent must also put in place organizational mechanisms that allow the unit to exploit synergies with the parent. To do so effectively, established firms must look at the new market as more than an extension of the established market.

Keywords:   business models, disrupt the disruptor, agility, defend and attack, entrepreneurial mindsets

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