Applying strategic business modeling to understand disruptive innovation

ABSTRACT

The Internet and related technologies have created enormous potential for disruptive innovations. Businesses engaging in e-commerce must constantly be examining opportunities and threats arising from disruptive change. Modeling techniques have been introduced to help visualize and reason about business models and strategies. This paper offers a modeling approach which characterizes a business model not in terms of flows or exchanges, but the strategic dependencies among various players. The business model is then analyzed in relation to the high-level strategy of the business. When a change arises, competitive scenarios are analyzed in terms of the strategic choices for the incumbent and new entrants. A historical case study from the telecom sector is used to illustrate.

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INDEX TERMS

Primary Classification:
  J. Computer Applications
  J.1 ADMINISTRATIVE DATA PROCESSING
      Subjects: Business

Additional Classification:
  H. Information Systems
  H.4 INFORMATION SYSTEMS APPLICATIONS
      H.4.2 Types of Systems
          Subjects: Decision support (e.g., MIS)

General Terms:
Design, Management

Keywords:
business modeling, disruptive innovation, strategic modeling