What Drives Business Model Adaptation? The Impact of Opportunities, Threats and Strategic Orientation

Tina Saebi, Lasse B. Lien, Nicolai Juul Foss

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    Abstract

    Business models change as managers not only innovate business models, but also engage in more mundane adaptation in response to external changes, such as changes in the level or composition of demand. However, little is known about what causes such business model adaptation. We employ threat-rigidity as well as prospect theory to examine business model adaptation in response to external threats and opportunities. Additionally, drawing on the behavioural theory of the firm, we argue that the past strategic orientation of a firm creates path dependencies that influence the propensity of the firm to adapt its business model. We test our hypotheses on a sample of 1196 Norwegian companies, and find that firms are more likely to adapt their business model under conditions of perceived threats than opportunities, and that strategic orientation geared towards market development is more conducive to business model adaptation than an orientation geared towards defending an existing market position.
    Original languageEnglish
    JournalLong Range Planning
    Volume50
    Issue number5
    Pages (from-to)567-581
    Number of pages15
    ISSN0024-6301
    DOIs
    Publication statusPublished - Oct 2017

    Bibliographical note

    Published online: 5 July 2016.

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