Continuous and Divergent Changes in Business Models

<p>This paper sheds light on a continuous change process of business models, which leads to a divergent change in business models. Prior studies on business model changes have assumed business models’ inertia and focused on episodic and divergent change. Although a few studies reported cases in which deviant models have arisen through continuous change, the whole picture of the process has yet to be obtained. To have a better understanding, we conducted a longitudinal case study.<br>We selected Secoma’s business model change as a critical case. Secoma, running a convenience store chain, has been making local changes cumulatively and deviating from the existing business model. We traced this process.<br>The analysis reveals dynamics that induce, spread and amplify divergent local changes over time. These findings also imply that the dynamics are driven by two organizational forces that have been assumed as sources of inertia—the organizational cognitive process affected by the existing business model and the organizational tendency to keep the current configuration.<br>The results indicate that business model experimentation, which prior studies have presented as a prescription for business model innovation, may have side effects: eliminating drivers of continuous changes, which could lead to divergent changes.</p>