The Concept Of BMI (Business Model Innovation)

The concept of BMI is defined within the literature as, searching new ways of creating value for various stakeholders and simultaneously generating profit for the company. Foss and Saebi (2017) define BMI as “designed, novel, and nontrivial changes to the key elements of a firm’s business model and/or the architecture linking these elements”. The literature evidences that enterprises are more willing to create value and new ideas through their current business models, however they often are not satisfied with the results unless they decide to change their business models. It should be noted that within the literature, product innovation is interpreted differently from BMI. BMI can result in emergence of innovative products but these two innovation types are not the same; in addition, BMI “does affect the organization more than product innovation”. BMI is related to the business model transformation in order to pursue the opportunities in the market as well as achieve competitive advantages and high performance. Besides, BMI can contribute to the change in only one component (block) of the business model (mostly value proposition) or more radically leads to change across all nine blocks of the business model.

Moreover, BMI has been defined not only through transformation processes from an existing business model to another, but also as creation of a “new business model” which mostly can be noticed across start-ups. Business transformation is then defined as moving from status quo to future situation in accordance with corporate strategic goals. These transformation processes demand for finding new ways in value creation. Especially through entrepreneurship studies, the BMI concept concentrates on change within business models and conducting innovative activities as well as processes within current existing business models.

To pursue the concept of change in business model, Cavalcante et al. (2011) have focused on the core repeated standard processes of the business model, which are referring to a set of related activities performing regularly to achieve key strategic goals. When entrepreneurs or founders of a new established corporate attempt to configure the business idea and the vision, they should think about the core repeated standard processes though which the business can be organized as well as risks and obstacles in early stages. It is argued that all changes in organization are not necessarily resulting in change in business models; only changes in core repeated standard processes address change in business models.

Cavalcante et al. (2011) have specified four types of change in business models: “business model creation” which means conceptualization of a new business model not existed before, “business model extension” refers to expanding the business as well as keeping the key processes of the existing business model, “business model revision” which is applied to change with replacing the business model with a new one and “business model termination” refers to relinquishing existing business model. According to the resource-based view, companies develop their BMIs based on the knowledge which is developed within them.

On the other hand, Zott and Amit (2010) assert that the business model encompasses “interdependent” activities which should be considered beyond company’s boundaries, which means that the influences of external forces and various stakeholders should be taken into account. Moreover, taking a cognitive approach Martins et al. (2015) argue that not only internal and external forces, but also founders and entrepreneurs’ perceptions can drive the change and innovation in business models. Sustainability and BMIs Recently, research on BMI has shown interest to pursue sustainability, for example investigation into the business model designs and factors, which can result in capturing sustainability. Entrepreneurial thinking is potentially important in relation to the creation of solutions in order to overcome environmental and social challenges within the constraints of the specific ecosystem where organizations operate. The sustainable business model concept is based upon integration of the concepts of “sustainable value creation”, “stakeholder management” and “long term perspective” into the concept of business model. Thus, research within this area argues that, the prerequisite of contribution to sustainable development is, reconsidering companies’ existing business models.

BMI can be viewed as a tool through which sustainability can be integrated into the business. As stated by Boon et al. (2013), “sustainable business models have the potential to bridge the gap between radical and systemic sustainable innovation and firm strategies, including the issue of economic performance at several levels”. Based on a literature review about the sustainable business model archetypes by Bocken et al. (2014), “sustainable business models can serve as a vehicle to coordinate technological and social innovations with system-level sustainability.”

Based on a recent research on proposing a process design for sustainable BMI by Baldassarre et al. (2017), sustainable BMI is explained as “developing value propositions that create value for multiple stakeholders at the same time, including customers, shareholders, suppliers and partners as well as the environment and society”. “Conceptualizing a sustainable value proposition is a critical task in sustainable business model innovation”. Sustainable value proposition, which is regarded as a core within a sustainable BMI, is obtained through integrating three pillars as, value proposition for all the stakeholders within the network value, defining a sustainability related problem and suggesting a solution to this problem through a new product or service. Sustainability concerns within business environment make companies confront risks, but also provide them with opportunities to involve within sustainability related innovations. Moreover, Joyce and Paquin (2016) propose a new framework to describe sustainable BMIs in which triple-bottom line approach is added to the famous canvas framework. Sustainability is claimed to be one of the key drivers when it comes to the change and innovation within company’s current business model.

More specifically, within nature tourism as highlighted within a recently literature review on sustainable business models in nature tourism, institutional innovations are introduced through sustainable BMIs as well as through BMIs with no specific sustainability concern. The literature suggest that most of the business models being explored within nature tourism pursue a more static perspective, rather than a dynamic perspective underlying the transformation of business models when it comes to sustainability. However, due to the lack of research in this context, it is not clear how firms can benefit and earn money from the creation of social and environmental values. On the other hand, it is poorly understood what really provoke change in business models as well as embedding sustainability into business activity. Even through, research regarding business models and BMIs which toward sustainability has been increasing among nature tourism scholars, still the innovation processes of business models remain somehow unexplored.