Business Model Innovation after Disruptions: A Process Study of an Incumbent Media Organization

Business model innovation is one possible avenue that incumbents can pursue in order to adapt to disruptive forces. Although we know much about the necessity and importance of incumbent adaptation to disruptions, we know much less about the process and direction of such transformations. We investigate herein the process through which incumbents respond to disruptions by opening up their closed business models. We conducted an in-depth and longitudinal study over a 20-year time period (1995-2016) of the process by which a major Italian news media publishers responded to the disruption by the Internet. By opening their business model, we find that incumbents can increase the access to and exploitation of external knowledge sources in order to seize new opportunities, lower costs, and fend off low-end disruptors. We further highlight the tensions that incumbents experience when opening up a relatively closed business model.