Big Data-Driven Business Model Innovation (BMI) From the Perspective of Ambidexterity: Case Study of L. Vending Intelligence

Big Data-Driven Business Model Innovation (BMI) From the Perspective of Ambidexterity: Case Study of L. Vending Intelligence

Lixia Wang, Vigdis W. Boasson, Emil Boasson, Yan Liu, Ying Chen
Copyright: © 2023 |Pages: 21
DOI: 10.4018/JGIM.323205
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Abstract

This paper explores the dynamic path of business model innovation (BMI) driven by big data and builds a big data-driven BMI model based on ambidexterity perspective. Using the case study approach, this paper examines the ambidexterity theory and employs the structured-pragmatic-situational (SPS) research method to explore the BMI driven by big data. The findings are: 1) Companies could promote business innovation using big data from both exploratory and exploitative activities. 2) It is a dynamic process when the company promotes its BMI based on big data while balancing the ambidexterity activities. The paper illustrates the mechanism of ambidexterity for BMI driven by big data and sums up a theoretical model with general principles.
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Introduction

In the modern era, the competition among businesses is no longer centered on products or technology, but rather revolves around competing business models (Wang & Song, 2020). As suggested by management guru Drucker, a good business model is the core of enterprise competition, and a good business model means half success (Drucker, 1985; Wang, 2020). High-value Business Model Innovation (BMI) is the root cause of enterprise competitiveness (Zhang et al., 2021). BMI is a new form of innovation, supplemental to innovation on a traditional product, technology, process, and organization (Casadesus-Masanell & Zhu, 2013). Designing innovative business models is a primary means for companies to improve their performance and competitiveness in the short term and to achieve long-term development (Hong et al., 2018). BMI has become the key for organizations to achieve high performance. Short of this, companies cannot achieve value and maintain a competitive advantage (Amit & Zott, 2012).

Despite the voluminous literature on BMI, issues are still related to operationalizing business model innovations (Minatogawa, et al., 2020). Prior studies primarily examine BMI from a process perspective, focusing on a single external view of change while ignoring the full utilization of existing corporate resources. Furthermore, there is a lack of consensus on the path and method of BMI companies can take to achieve success. Gao and Guan (2006) suggest that the innovation path involves expanding and reorientating value chain activities, while other researchers propose that BMI involves multi-element interaction and integrating systemic innovation (Demil & Lecocq, 2010). In particular, the implementation and management approach to BMI require further exploration. Much of the extant literature focuses on business model design, while there is still room for contribution to its validation and testing.

To address the gap in our understanding of the operationalization and building of ambidextrous capabilities for BMI, we turn to the literature on ambidexterity theory. Ambidexterity theory suggests an inherent conflict involving BMI, the tension between innovating and taking risks to pursue future growth opportunities versus managing existing assets in place. Successfully managing this tension requires ambidexterity, the balance between exploration and exploitation. However, achieving this balance is still debatable (Alizadeh and Jetter, 2019). Meanwhile, there is still a gap in our understanding of the underlying mechanisms, architectures, and dynamics by which organizations can achieve exploration and exploitation (Turner and Lee-Kelley, 2012). Although there is a consensus that ambidexterity significantly impacts the firm’s success, the question of how to build ambidextrous capability is still a matter of debate, and the recommendations are controversial to date. Furthermore, there has been little success in resolving or explaining the contradictions of different practices and even fewer practical insights into how and when such practices should be employed (Alizadeh and Jetter, 2019).

To operationalize and build ambidextrous capabilities for BMI, we review the literature on BMI through Big Data. We posit that big-data technology can facilitate BMI to achieve ambidexterity. The emergence of “big data” offers organizations unprecedented opportunities to gain and maintain a competitive advantage. Chaudhary et al. (2015) argue that big data platforms promise improved operational efficiencies and the generation of greater revenues with enhanced business growth. With the rapid development and widespread popularization of information technologies such as cloud computing, big data, the internet of things, artificial intelligence, blockchain, and mobile internet, the fourth industrial revolution is deeply integrated into society with the characteristics of digitization, networking, and intelligence of information technology (Ma & Zhang, 2022).

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