Professor Henk Volberda, Rotterdam School of Management, Erasmus University
Despite the rise in research on business models, there is little systematic evidence on how environmental dynamism influences the performance effects of two types of business model innovation, i.e. business model replication and business model renewal. In this paper, we introduce a conceptual distinction between these two types of business model innovation. Furthermore, we conceptualise how both types are related to firm performance, and how environmental dynamism moderates those relationships. Based on a large-scale cross-industry survey we find that environmental dynamism weakens the positive effect of business model replication on firm performance. Business model renewal contributes stronger to firm performance in environments characterised by intermediate and high levels of dynamism compared to relative stable settings, i.e. low levels of environmental dynamism. These findings indicate that environmental dynamism is a key contextual variable in the relationship between business model innovation and firm performance.