2. Literature Review and Research Hypotheses Development
Business model innovation has been a popular topic for some time. The increased research interest in BMI is represented by the dynamically increasing number of scientific publications touching on this subject. Although much attention has been paid to BMI, there is no consensus on a universal definition of the concept [4
]. As stated by [7
], BMI defines how a company creates and delivers value to customers and how it captures value. On the other hand, according to [8
], BMI refers to how: “organizations transform new ideas into improved business models in order to advance, compete and differentiate themselves successfully in their marketplace”. Both definitions suggest that BMI influences a company’s competitive advantage. The more radical character of transformation and change, the more competitive a BMI is [2
Additionally, some authors point out that BMI is defined as: “designed, novel, nontrivial changes to the key elements of a firm’s business model and/or the architecture linking these elements” [9
]. Such a definition underlines two aspects. Firstly, BMI is “designed” which means that it is a conscious and deliberate action undertaken by a company. It means that companies try to implement BMI with hope to influence a company’s competitive advantage and outperform competitors. Although in the literature on innovation [10
] a conscious and deliberate manner of creating innovation is believed to bring fruitful results again it has to be pointed out that successful implementation of BMI is difficult [2
]. Secondly, the definition points out “elements” that need to be subjected to change. In the literature these “elements” can be seen from different perspectives, e.g., [4
]. However, many researchers [13
] point out that resources possessed by a company have a special place among different BMI elements.
When it comes to resources possessed by a company some authors [2
] point out that technology can be used in order to deliver BMI. In this context it should be noted that not all researchers believe that technology plays a crucial role in creating BMI. One of the most famous (when it comes to number of citations—2006 already) publications on BMI is titled: “Business model innovation: it’s not just about technology anymore” [17
]. Therefore research which touches both on resources and BMI is divided into two streams. The first stream includes research which neglects the role of technology, concentrating on other, softer types of resources such as capabilities [18
], knowledge [20
] or intellectual capital [21
]. However, the second stream contains research which proves that technology is an inseparable element of BMI and, as stated by [22
], BMI and technology are interconnected. Authors associated with this stream believe that technology can not only help a company to deliver BMI [24
], but that BMI can also result in technology creation [25
]. The second stream of research is becoming increasingly important, because of the dynamic growth of what is called “new technologies”. According to [3
]: “new technologies are responsible for enabling new business models”.
New technologies are defined as “any set of productive techniques which offers a significant improvement (whether measured in terms of increased output or savings in costs) over the established technology for a given process in a specific historical context. Defined thus, what is seen as ‘new’ is obviously subject to continual redefinition, as successive changes in technology are undertaken” [27
]. With that in mind, it should be noted that even though new technologies are used by companies more often than ever before, it is difficult to find a classification of technologies which are supposed to be considered as “new”. In this context, information provided by BCG [28
] can be useful, which indicates that new technologies include: autonomous robots, simulation, integration of horizontal and vertical systems, Internet of Things, cyber security, cloud, additive production, augmented reality and Big Data. This classification was used by [29
] who researched BMI based on new technologies. However, in a result of conducted qualitative study [29
], enriched the classification provided by [28
] and suggested to add artificial intelligence (AI), drones, electric vehicles and blockchain to the existing list of new technologies.
This present study, which concentrates on BMI based on new technologies, uses the classification suggested by [29
]. There are three reasons for that. Firstly, the classification provided by [29
] was published more recently than [28
] which means that it offers a more up-to-date perspective. Secondly, it does not deny information suggested by [28
] which is one of the most respected consulting companies in the world. On the contrary—it builds on BCG’s classification. Thirdly, classification provided by [29
] identifies thirteen instead of nine new technologies which enable adoption of broader research perspectives. Therefore, whenever the term “BMI based on new technologies” is mentioned in the paper, it refers to BMI which utilizes at least one of the technologies listed by [29
In order to examine the phenomenon of competitive advantage of companies characterized with BMI based on new technologies, the present authors performed a critical analysis of literature. When reviewing the literature both EBSCO and ProQuest databases were searched for information. The reason for choosing these specific databases was the number of full text publications. Additionally, publications of globally respected consulting companies (such as BCG, Gartner, Forrester, EY, PWC and Deloitte) were taken into consideration. In order to be included in the literature review process a publication needed to meet three criteria: (1) touch on BMI, (2) touch on at least one of the new technologies from adopted classification, namely: autonomous robots, simulation, integration of horizontal and vertical systems, Internet of Things, cyber security, cloud, additive production, augmented reality and Big Data, drones, AI, electric vehicles and blockchain, (3) refer to competitive advantage. Results of performed literature review are presented from perspective of different types of new technologies.
Concerning autonomous robots, they can modify the way a company operates in the market and enable BMI. According to Deloitte’s report [30
], there are certain advantages of autonomous robots, especially in reference to supply chain management that include among others reduction of costs, error rate and frequency of inventory checks, increased productivity as well as optimizing picking, sorting, and storing times. All these advantages strongly affect companies competitive advantages. Such a statement is supported by another consulting company Ernst&Young [31
], according to which robots are affecting the efficiency of companies operations in many areas from finance, human resources, and IT to customer care.
When it comes to simulation, analysts of Gartner believe that companies can use them in order to innovate the existing business model by enhancing the decision making process [32
]. Companies representing different industries are using it to simulate real-time working conditions and perform intelligent decision-making and implement cost-effective solutions [33
]. In this context, it is worthy to mention a special type of simulation called digital twin (DT). They can simulate any aspect of companies operations. For example DTs can simulate the operation of a process or device (group of devices) on the basis of documentation which is aimed at eliminating any errors before implementing or building a physical device. According to Deloitte [34
], DTs can increase efficiency in manufacturing, optimize supply chains, transform predictive field maintenance, and aid in traffic congestion remediation. Apart from digital twins, another use of simulationworth mentioning in reference to BMI is process replay in process mining. Process mining is analyzing current state of business process performance as well as identification of areas for improvement [35
]. In this context, simulation can be used in order to represent possible improvements by replaying processes in different scenarios to identify ways of enhancing them.
When it comes to the integration of horizontal and vertical systems in the context of BMI and competitive advantage one should acknowledge that it refers both to upstream and downstream industry chains. It can serve as an effective way of gaining access to many types of resources which a company cannot possess when acting alone [36
]. A BMI based on integration of horizontal and vertical systems often takes the form of a platform. Such a solution comes with specific advantages, e.g., sustainability or reduction of operational costs [37
According to [4
], BMI in the 21st century has to utilize such technologies as the Internet of Things (IoT) which enables companies to acquire information and communicate with physical products. Additionally, IoT allows the collection of real-time information from the physical world [38
]. Real-time data in combination with historical data can be used to create the business models of tomorrow [39
]. Thus, IoT equips companies with new tools motivating them to migrate from conventional product-centric approaches to digitally-based service-oriented approaches which results in BMI creation [40
]. BMI based on IoT can reshape whole industries, e.g., the results of a study conducted by [41
] suggest that IoT is an important factor causing retailers to innovate their business models. Moreover, Reference [42
] points out that a dynamic increase in the implementation of BMI based on IoT is expected in the case of large manufacturing companies in the future.
When it comes to cyber security, BMI and competitive advantage, a few aspects should be pointed out. The first one is the rapid development of 5G, which has a great potential for companies willing to deliver BMI, and cyber security that helps to exploit it [43
]. The second aspect refers to the fact that cyber security ensures the proper implementation and use of BMI. This fact finds confirmation in the proved negative impact of cyber security breaches on innovative companies’ business models. According to [44
], cyber security breaches could decrease both a company’s spending on R&D and number of patents. Last but not least, cyber security helps to perform BMI and build competitive advantage by differentiating a company in a novel way [45
When it comes to the cloud, it seems to be the type of new technology receiving the most research attention, as reflected in a high number of publications, e.g., [46
]. According to [50
], thanks to the cloud, companies can sense and seize opportunities in order to realign their business models and gain competitive advantage. In other words the cloud may set off a company’s transformation process. It has to be pointed out, however, that innovating a business model is driven by a company’s dynamic capabilities [48
]. Where a company lacks dynamic capabilities, it might minimize the potential to use the cloud in order to create BMI and strengthen competitive advantage [50
In the case of additive manufacturing, BMI and competitive advantage, it is believed that 3D printing technologies influence the way BMI is delivered. Three-dimensional (3D) printing supports the speed of prototype creation [51
]. Therefore a company can act faster, test more solutions and better serve the needs of the market. BMI which uses 3D printing technologies are believed to result in a company’s success as well as increase the firm’s ability to survive in the market [52
]. Furthermore, the scope of influence of BMI based on additive manufacturing is not just limited to single companies, but to many business entities. According to [53
], it also affects entities engaged within supply chains.
When it comes to augmented reality (AR), Forrester’s analysts [54
] point out that it should be examined collectively with mixed reality (MR) and virtual reality (VR). AR is an interactive experience of a real-world environment where the objects are enhanced by computer-generated perceptual information [55
]. MR, a related term, is the merging of real and virtual worlds to produce new environments, where physical and digital objects co-exist and interact in real time [56
]. VR on the other hand is a computer-generated simulation (although VR is a type of simulation it was decided to discuss it in the context of AR; the reason for which is the similar nature of AR and VR, while both technologies refer to real-and-virtual combined environments called extended reality (XR)) in which a person can interact within an artificial environment [57
]. According to [58
], augmented technology will affect the manner of how companies do business by enabling BMI. It cannot only prolong product’s life cycles but also increase companies competitiveness. Additionally, they fundamentally provide new methods of communication, learning and specialist training for companies which operate in specific industries [57
The other technology which has been studied from the perspective of BMI and competitive advantage is Big Data. There are certain advantages for companies to implement Big Data. Firstly, it can be used to gather information regarding the market and customer behavior. Additionally, it enables a company to use real-time information and improve the decision-making process. Utilization of Big Data enhances the course of action involving strategic algorithms and procedures rather than simple use of managers’ intuition [3
]. Thus the company has a better understating of the market and greater ability to find market niches which can be targeted with BMI [59
According to [7
], the use of artificial intelligence (AI) has become a primary issue for business leaders considering BMI. The existing research on BMI, competitive advantage and AI concentrates on two forms of AI: machine learning and neural networks (deep learning). Results of the studies suggest that both forms of AI are speeding up BMI processes. The influence of AI on BMI is visible in three different aspects of interactions: between humans, humans and machines as well as between machines [60
]. The last aspect seems to be of utmost importance while it suggests that BMI can be developed solely by machines, not engaging humans. Another interesting aspect is that AI can help to deliver green and sustainable BMI [61
]. However, [7
] points out that firms are struggling to make sense of the influence of AI and to come up with an appropriate AI strategy.
When it comes to drones, [62
] states that they have become affordable enough to complement different types of businesses. Although drones are often considered as a new method of delivery, in the case of logistic solutions [63
] they can also be used for different purposes such as collecting information [64
]. According to the report by PwC [65
], the usage of drones is becoming more and more popular in many industries. Additionally, drones can not only help to generate internal efficiencies of operations, but also create new revenue streams from a wide range of drone-related services. While these two aspects are important elements of companies business model, implementing drones can enable BMI.
In the case of electric vehicles (EV), BMI and competitive advantage, the existing research points out the necessity to implement BMI. EV themselves are so innovative that they require new models of optimizing advertising, marketing and big data analysis to be provided in order to provide the most efficient way for companies to operate in the market [66
]. Additionally, EV have the potential to challenge the existing business models of the automotive market and provide sustainability of not only the transportation system [67
], but to make entire cities green [68
]. When it comes to blockchain (BC), BMI and competitive advantage, it is believed to influence the manner in which companies manage value. According to [6
], it has an impact on all three aspects of a company’s value management, namely: value creation, delivery as well as capture, which results in BMI. Other authors [69
], tend to share this point of view and state that blockchain could be a source of BMI. They also point out that it can result in delivering a sustainable BMI. In the case of hard data, BMI based on BC can reduce costs, help to deliver customized products and offer additional services [6
A summary of existing research on BMI, new technologies and competitive advantage is presented in Table 1
Two observations can be deduced from the information in Table 1
. Firstly, research results presented in the literature tend to concentrate on identifying different effects of BMI based on new technologies which in turn influence competitive advantage. However, the existing studies neglect measuring competitive advantage gained through the effects of BMI based on new technologies. Secondly, most of the existing studies concentrate only on specific, single technologies applied for the purpose of performing BMI. However, with a few humble exceptions, e.g., [6
], they do not acknowledge that companies can use multiple technologies at the same time. An example of such a situation is hyper automation, which combines technological advances of robotic process automation, enterprise application integration and artificial intelligence. The two observations deduced from the information in Table 1
represent an uncharted territory of BMI, new technologies and competitive advantage, and should be considered as a research gap.
The research gap is even more significant when one tries to correlate BMI based on new technologies to competitive advantage seen from the perspective of different performance indicators. The literature review revealed that the existing research focuses on the way BMI and new technologies influence competitive advantage, but little is known of the effects of such influence. Additionally, in the literature there is no consensus among researchers on the manner of BMI’s influence on different company performance indicators [70
]. Some authors [71
] believe that BMI favors companies, but there are also those who state that BMI is not always beneficial [73
]. Furthermore, according to [5
] “few studies in the literature have addressed business model innovation, technological innovation, and their interplay towards a company’s business performance, especially with empirical evidence”. Even though some research exploring the influence of BMI based on specific technologies exist, they are too limited to make any general conclusions. For example, when taking into consideration the cloud, which has been characterized as a relatively well-studied aspect of BMI, in the literature it is still underlined that: “current research offers very limited insights on the /…/ use of cloud sourcing might trigger and push the development of business model innovation and affect the competitive advantage of a firm” [48
]. This example is not the only one. The same situation occurs also in the case of the other relatively well-studied aspects of BMI, e.g., Big Data. As stated by [3
] BMI, Big Data and competitive advantage are still poorly explored. The current state of knowledge in the area of BMI, new technologies and competitive advantage was well summed up by [5
], who state that despite the significant potential, far too little attention has been devoted to these aspects.
Taking into consideration the significant research gap existing in the literature, the aim of the paper is to determine the influence of BMI based on new technologies on a company’s competitive advantage.
In order to achieve the aim of the paper two research hypotheses have been formulated.
The first hypothesis (H1) states that: BMI based on new technologies positively influences a company’s competitive advantage.
There are at least three reasons for supporting such a hypothesis. Firstly, although there are contradictory research results in the literature [73
] on the general role of BMI for competitive advantage, there are many authors, e.g., [75
] who believe that BMI has a positive impact on a company. If so, BMI based on new technologies could also have a potential to positively influence competitive advantage. Secondly, the performed literature review (Table 1
) identified many positive effects of different new technologies. According to the existing literature these positive effects should be reflected in company’s competitive advantage. Thirdly, BMI helps companies to utilize technology [78
]. Companies performing BMI or solely introducing “new technologies” may fail, whereas doing these simultaneously could bring fruitful results. This is because synergetic effects between BMI and “new technologies” are expected to occur, which in turn would positively influence the company’s competitive advantage.
The second hypothesis (H2) states that: the more new technologies that are used for BMI, the greater a company’s competitive advantage.
There are at least two reasons for supporting such a hypothesis. Firstly, as was already mentioned, the conducted literature review (Table 1
) identified many positive effects of each of the discussed types of new technologies. With the introduction of each new type of technology, these effects should be collected and summarized. Therefore the more technologies a company characterized by BMI uses, the more positive effects and the greater impact on competitive advantage.
Secondly, the new technologies include 13 technologies [29
] that differ greatly from each other. According to Gartner’s report [79
], it is more and more popular to combine different new technologies together. The more new technologies that companies characterized by BMI adopt, the more radical the character of innovation and greater impact on competitive advantage [24
Taking into consideration the existing literature, a few boundary conditions for the two formulated research hypothesis can be identified. Some of them refer both to H1 and H2 (general boundary conditions) while others refer either to H1 or H2 (specific boundary conditions). One of the general boundary conditions refers to risk [80
]. Because many BMI initiatives fail [81
], both H1 and H2 assume that companies under investigation have reasons (e.g., BMI’s market potential or company’s differentiated fields of activity, etc.) to accept this risk. Another general boundary condition refers to market knowledge. While BMI is about a company creating and delivering new value to customers [7
], it requires market knowledge [82
]. Therefore, both H1 and H2 assume that market knowledge of companies under investigation is sufficient to create and deliver new value and perform BMI based on new technologies. When it comes to specific boundary conditions, they refer either to H1 or H2.
A specific boundary condition for H1 refers to companies internal absorption capabilities. Companies with well-developed internal absorption capabilities tend to do better than companies with underdeveloped internal absorption capabilities in terms of competitive advantage [83
]. H1 assumes that companies under investigation have well developed internal absorption capabilities, otherwise they would neither implement BMI nor adapt new technologies.
A specific boundary condition for H2 refers to an interplay between BMI and technology. According to [84
], “technology’s value comes from doing business differently because technology makes it possible”. Such a statement points out a two-way relationship between BMI and technology. On one hand, BMI exploits the value of technology and helps companies deliver value, but on the other hand technology can be seen as a trigger for BMI. H2 assumes that the described interplay takes place in the case of companies characterized with BMI based on new technologies.
Achieving the aim of the paper and verifying the formulated research hypotheses will help to answer the question stated in the literature by [85
]: “when does the combination of a novel technology and a novel business model lead to competitive advantages?”.
The aim of the paper was to determine the influence of BMI based on new technologies on a company’s competitive advantage. The aim was achieved thanks to extensive (483 companies) empirical investigation carried out in the form of CATI. There are two main outcomes of the conducted research. Firstly, BMI based on new technologies has a positive influence on company’s competitive advantage. Both financial and non-financial competitive advantage indicators (profit, sales, ROI and market share) were taken into account, and they all proved to be favorable in comparison to competitors for companies characterized by BMI based on new technologies. Secondly, it was proven that the greater the use of new technologies for BMI the greater the company’s competitive advantage. Companies characterized by BMI based on new technologies were divided into three groups based on the number of technologies they utilize. Companies from the first group use the smallest number of technologies, companies from the second group use a slightly higher number of technologies, while companies from third group use the highest number of technologies. The observed tendency was very clear—competitive advantage indicators of companies from the third group were better compared to companies from both the first and second group, and the indicators of companies from the second group were better compared to companies from the first group.
The present results contribute significantly to the development of the current state of knowledge. This study is one of a few which examines the role of BMI based on new technologies on competitive advantage in a comprehensive manner. Existing studies (see Table 1
) used to concentrate only on selected aspects of the research phenomenon referring to specific technologies. Additionally, as stated by [5
], “despite its [technology and BMI] significance, only a limited set of research considered this when clarifying the relationships between innovation and a company’s business success”. The present study accurately fills the existing research gap by providing reliable (based on a relatively big research sample) results.
When acknowledging the present results, it should be noted that they significantly contribute to the development of at least two theories—theory of innovation as well theory of competitive advantage. When it comes to the theory of innovation, BMI based on new technologies should be seen as a new, unique form of innovation. It is a combination of two innovation types, namely an organizational and technological one. Being a mix of two types of innovation, BMI based on new technologies has a radical character. Therefore, when considering innovation, it takes the understanding of the scope of change, necessary to deliver a novel solution (innovation) into a new, unseen before level.
When it comes to the theory of competitive advantage, the results helped to identify a new method for companies that can be used in order to gain favorable (better than competitors) results. Mere adoption of BMI based on new technologies guarantees a competitive advantage for companies, but what is equally important is that developing BMI based on new technologies by implementing a higher number of new technologies further increases a company’s competitive advantage. Therefore BMI based on new technologies seems to be a method with high potential among other methods mentioned by the theory of competitive advantage.
A few recommendations for business practice can be formulated from the results of the present study. Firstly, small and medium-sized companies (SMEs) should not feel constrained to perform BMI based on new technologies. The study revealed that this form of innovation is not reserved solely for big companies. On the contrary—even micro companies can adopt BMI based on new technologies. Secondly, companies utilizing four or fewer new technologies for the purpose of BMI should not stop there. Although the use of four innovative technologies may seem a lot, increasing the number of utilized technologies would further improve competitive advantage. Therefore, in order to maximize the positive effects of BMI based on new technologies for competitive advantage it is recommended to use at least five technologies. Thirdly, companies which are either characterized by BMI but do not use any new technologies or companies using new technologies which cannot be characterized as BMI companies and that obtain unsatisfactory results should consider converting into companies characterized by BMI based on new technologies. The results of the conducted research have revealed that these specific types of companies tend to obtain favorable performance indicators in comparison with market rivals.
Taking into consideration the results of the present study, a few recommendations for policy makers can also be formulated. Firstly, policy makers should promote BMI based on new technologies as a favorable development path for companies. While such a strategy leads to competitive advantage, policy makers should try to convince representatives of business practice to implement it. Promotion could take form of seminars and workshops for top managers who are the ones responsible for BMI’s introduction in companies. Secondly, policy makers should award grants for companies to implement more new technologies for BMI purposes. Such grants should be targeted at two groups of companies (using 1–2 technologies and using 3–4 technologies) and aimed at using at least five new technologies (identified as the threshold of the most favorable number of technologies) for BMI purposes. Investments in use of more new technologies would result in better performance indicators of companies obtaining financial support.
Although the present authors made every possible effort to avoid potential research traps, the present study has certain limitations. One of these lies in the adopted classification of new technologies [29
]. Although thirteen different types of new technologies were taken into consideration in the present study, one could argue that more types of new technologies exist. It means that results should be treated with some caution as they refer only to the selected new technologies. Additionally, one should consider results presented in the paper specifically from the perspective of the thirteen mentioned types of new technologies. The second limitation refers to the set of indicators used to assess competitive advantage. Although profit, sales, ROI and market share were used by other authors, e.g., [5
] analyzing different performance indicators could have influenced the results. The third limitation refers to the division of companies into clusters. Although the division was statistically significant, it should be noted that the third cluster refers to a wide spectrum of technologies (5–12). In the case of the other clusters (first and second) the spectrum of utilized technologies was much narrower. Therefore competitive advantage indicators of the clusters need to be compared with some caution. The fourth limitation refers to defining the boundary conditions necessary for the truth of the hypothesis. In the paper authors proved statistical significance of H1 and H2. It means that incase of majority of companies BMI based on new technologies positively influence competitive advantage as well as in the case of majority of BMI companies with higher number of technologies the competitive advantage is greater compared to companies with lower number of technologies. It has to be however pointed out that these are just two general tendencies which are not true for every single company. In order for them to be true a set of conditions needs to be met. Although these conditions were not part of the research problem under investigation in the paper, the authors fully acknowledge their importance. It is more than probable that these conditions, at least to some extent, determined the results presented in the paper. The fifth limitation refers to the research method which was a quantitative analysis. This limitation was well visible in an attempt to compare performance indicators of companies characterized with the same size, form of ownership and operating in the same industry within the three identified clusters because the delivered results were statistically insignificant. Using a different (e.g., qualitative method) could deliver more fruitful results.
There are still many unknowns when discussing BMI based on new technologies and a company’s competitive advantage. An interesting direction for future research could be to identify the conditions under which BMI based on new technologies succeed and fail. This recommendation for future research goes along with defining the boundary conditions which was identified as one of paper’s limitations. Another possibility would be to compare performance indicators of companies characterized by BMI based on new technologies and which are divided into clusters in a different manner. Instead of taking into account the number of utilized technologies, one could try to identify clusters of companies characterized by BMI based on new technologies, having in mind their true occurrence in business practice. Additionally, while quantitative analysis could omit some nuances of the research phenomenon, in the future it is recommended to perform a qualitative analysis in order to examine the influence of companies size, form of ownership and industry on competitive advantage of companies characterized with BMI based on new technologies. Performing a qualitative analysis could also help to identify other determinants of competitive advantage of companies characterized with BMI based on new technologies. Following the suggested directions for future research would help to better understand the influence of BMI based on new technologies on competitive advantage.