Applying strategic business modeling to understand disruptive innovation

The Internet and related technologies have created enormous potential for disruptive innovations. Businesses engaging in e-commerce must constantly be examining opportunities and threats arising from disruptive change. Modeling techniques have been introduced to help visualize and reason about business models and strategies. This paper offers a modeling approach which characterizes a business model not in terms of flows or exchanges, but the strategic dependencies among various players. The business model is then analyzed in relation to the high-level strategy of the business. When a change arises, competitive scenarios are analyzed in terms of the strategic choices for the incumbent and new entrants. A historical case study from the telecom sector is used to illustrate.