Innovating to survive in competitive markets: business model innovation of Chinese digital businesses

Abstract

Purpose Business model innovation (BMI) has been posited as essential for both new and existing digital business, as they commonly operate in competitive and fast-moving markets with limited entry barriers. However, it is highlighted within the literature that the understanding of how BMI contributes to business success and how new digital ventures develop competitive advantage is still unclear. This study aims to address this lacuna by exploring how young Chinese digital businesses develop and innovate their business models to survive in fast-moving and competitive markets. Design/methodology/approach This research adopted a multiple case study design, with qualitative data being collected from the founders of five Chinese digital businesses, to develop an understanding of the evolution of their business models and BMI from their inception. Findings The findings add support for the contention that BMI can play an important role and is beneficial in the success of such new digital ventures in highly competitive environments. The founders attribute their success to a willingness for continued BMI, an openness to new opportunities, developing customer relationships and continuous iteration. Originality/value This research addresses calls to further the authors’ understanding of how BMI contributes to business success and how new digital ventures develop competitive advantage by exploring the BMI of five highly successful digital businesses from their inception.