Business Model Innovation in the Context of Sustainable Development - A case study of how a business model is modified when a corporation commits to bringing a sustainability innovation to market.

Abstract: Sustainable development is a driving force of innovation and innovation has long been seen as a success factor for sustained competitive advantage. Further, the successful diffusion of innovations with environmental and social benefits holds the promise of transformational change which could lead to self-reinforcing feedback loops of sustainable development and innovation. Business models are subjects of innovation and are also regarded as necessary mediators between sustainability innovations and a business case for sustainability. Through a case study of an incumbent firm within the asphalt industry, I aim to understand the process of business model innovation and to outline sustainability driving forces that affect the process. Further, I aim to outline the challenges which face an organization that attempts to appropriate value from a sustainability innovation. The theoretical notions of sustainable development, sustainability innovation, business model and business model innovation are explored and the business model innovation process of a sustainability innovation within AkzoNobel Asphalt Applications is explained. The driving forces behind the development of the sustainability innovation as well as the challenges for it to gain market success are elaborated upon. The main findings of this thesis are:  The business model innovation process at AkzoNobel Asphalt Applications has occurred through an evolutionary process triggered by external forces. The evolution occurred due to product development of a sustainability innovation.  There are three main challenges facing market diffusion and value appropriation of the sustainability innovation explored in this thesis.