How to Settle the Tussle between Business Model Innovation Approaches : Exploring the Automotive industry using a dual case study of Fiat and Tata Motors

Abstract: This study investigates the drivers and forms of business model innovation. It is built on the business model innovation typology proposed by Koen et al. (2011), we have developed its dimensions into Hurdle rate, technology, partners value network and customer value network. The study used these dimensions as a base to differentiate between the two approaches of the business model innovation which were identified as innovating the existing business model approach and multiple business model approach. The study used qualitative analysis, through a dual case study approach in the automotive industry, consequently Fiat and Tata Motors were selected as case studies. Furthermore, the study foundation is secondary data supported by primary data (i.e. interviews) to investigate how each of these two organizations has implemented business model innovation in each case study, by highlighting and contrasting their different approaches of business model innovation. The results of the study showed that each of the two approaches of business model innovation implies open innovation and expands the organization’s value network. However, innovating the existing business model focuses on improving the organizations’ performance, and sustaining innovation. On the other hand, the multiple business model approach aims to disrupt the industry or a competitor (i.e. New entrant), through disruptive innovation. Moreover, the study proposed a process based framework and a checklist on business model innovation, to assist the decision makers in organizations while choosing between innovating their existing business model or designing a new one.