More can be better: operating multiple business models in a corporate portfolio

Abstract

Purpose

Established firms are increasingly under pressure to develop new business models (BM) in a continuous manner to cope with competitive constraints and changing market requirements. Business model innovation (BMI) is widely accepted as a viable means to stay ahead of competition. Yet, firms struggle with successful BMI. The barriers to BMI is a widely discussed topic in academia and practice but with little reference to the barriers a firm is confronted with when operating multiple BMs in a corporate portfolio.

Design/methodology/approach

This paper investigates the implications for a firm operating a multitude of BMs concurrently. By combining the results of a literature analysis and 15 expert interviews from the fields of corporate strategy, business modelling and consulting, this paper presents and discusses the opportunities and challenges related to BM diversification.

Findings

The findings show that a strategic BM portfolio can be installed for enhanced value creation. However, managing multiple BMs and finding the right balance between existing and new business pose a major challenge for many established firms. With these results, the paper contributes to the existing literature in the fields of BMI and BM portfolio management. The findings clearly show the emerging importance of a strategic corporate BM portfolio for both research and practice and may provide an impetus for management discussions involving strategic BM portfolio decisions.

Originality/value

By building on and adding to existing literature and discussing existing works, this paper aims to giving a structured and comprehensive overview of enhancing and impeding factors on value creation when operating multiple BMs in a corporate portfolio.

Citation

Bosbach, K.E., Brillinger, A.-S. and Schäfer, B. (2020), "More can be better: operating multiple business models in a corporate portfolio", Journal of Business Strategy, Vol. 41 No. 4, pp. 47-54. https://doi.org/10.1108/JBS-04-2019-0083