Understanding the impact of technology on firms’ business models

Abstract

PurposeThe purpose of this paper is to identify the impact of a new global positioning technology on firms’ business models.Design/methodology/approachThe empirical setting was a consortium of Danish organizations, established to develop a positioning‐based technology platform as a basis for innovative commercial products and/or services. Three of the consortium companies were selected for case‐study research.FindingsThe main findings were that companies will use the new technology to extend their existing business models, and that the technology platform potentially represents the creation of a new business model for the partner companies in the consortium.Practical implicationsThis paper is important in that it will help companies understand technological impact from a business model perspective, thereby enabling them to manage innovation better by distinguishing between the creation, extension, revision or termination of business models.Originality/valueThe main contribution of this study is its use of the business model perspective to analyse the impact of an emergent technology on companies’ innovation activities. This perspective makes it easier to develop strategic initiatives while managing innovation, and underlines the importance of purposive human action in adopting a proactive behaviour, reducing deterministic views on technological impact.