Disruptive Business Model Innovation: Incumbent's perspectives and approaches to competitive advantage generation

Abstract: Today's rate and speed of disruption are more significant than ever, compelling firms to find innovative ways to meet ever-changing market demands. Aside from innovation in products and services, incumbent firms have been urged to create and offer new values by innovating their business models to meet these demands. Since minor changes to business models have proven insufficient for generating competitive advantage, it has been suggested that firms adopt Disruptive Business Model Innovation (DBMI). Due to the fact that prior research has been focused on dynamic capabilities to explain the nature of DMBI, this paper focuses on understanding the phenomenon of DBMI in relation to organisational capabilities. The study seeks to determine how DBMI unfolds in incumbent multinational firms, their strengths, struggles and key organisational capabilities (OCs). Through the triangulation of data obtained through ten in-depth interviews and examining internal and external documents, the study conducted a thematic analysis to draw empirical conclusions. The research shows how incumbent firms are open to find alternatives and explore new approaches to their Business Model (BM)s despite the barriers and organisational structures that resist disruptive changes. By being aware of their strengths and actively working on improving their weaknesses, firms are implementing DBMI continuously to maintain a competitive advantage. In light of these research findings, the study contributes to the development of theoretical knowledge on DBMI and OCs, as well as practical insights into how DBMI can be implemented in incumbent firms.