THE THREE FACES OF BUSINESS MODEL INNOVATION: CHALLENGES FOR ESTABLISHED FIRMS

Business model innovation represents a significant opportunity for established firms, as demonstrated by the considerable success of Apple's iPod/iTunes franchise. However, it also represents a challenge, as evidenced by Kodak's failed attempt to dominate the digital photography market and Microsoft's difficulty gaining share in the gaming market, despite both companies huge financial investments. We developed a business model innovation typology to better explain the complex set of factors that distinguishes three types of business model innovations and their associated challenges.