Defining and identifying disruptive innovations

Three essential questions about innovations prevent academics from helping managers determine if a new technology is a disruptive innovation to their organization. First, what is a disruptive innovation? Second, how can a disruptive innovation be disruptive to some and yet sustaining to others? Third, how can disruptive innovations be identified before a disruption has occurred in an organization? This paper proposes answers to these three questions by redefining disruptive innovations through use of innovation adoption characteristics. Through the relative nature of innovation characteristics, a heuristic, or Baedeker, to better determine if an innovation could be disruptive to an organization is proposed. Illustration of the approach is presented to show how potentially disruptive innovations could be identified before an organizational disruption has occurred.     

Perception of value delivered in digital servitization

This paper intends to explore the perception of value delivered in digital servitization in a business-to-business context of incumbent manufacturing firms. We investigate how individual entrepreneurial orientation (IEO) influence and affect the adoption of such digital servitization strategies. The observations are made through a survey and empirical assessment across a couple of large industrial organizations interested in servitization and digitalization. Findings contribute to the existing literature on digital servitization and business model innovation by suggesting that IEO influence perceived value in delivering digital service offers, whereas functional affiliation does not. Further observations suggest that digital capabilities can become a crucial enabler for the perception of value delivered in digital business models by providing swift access to data for affected stakeholders.     

Networks for the commercialization of innovations: A review of how divergent network actors contribute

Successful commercialization is of great importance to innovative firms, and the recent literature has increasingly acknowledged that networks make a contribution not only to research and development but also to commercialization. However, research on networks facilitating the commercialization of innovations is scattered across divergent disciplines. A single company is rarely capable of generating successful diffusion in the commercialization of an innovation; success often requires cooperation between individual actors and organizations, and support from stakeholders. Consequently, the network aspect of commercialization is crucial. The aim of this study is thus to integrate the knowledge on how current research and business has employed the network approach in commercialization, and how contributors external to the innovator firm can facilitate the commercialization of innovations. On the basis of an extensive metatheoretical literature review and a qualitative and quantitative content analysis on articles linking networks explicitly to commercialization, this study produces a conceptual synthesis on network actors' contribution potential to commercialization. The analysis identified divergent network approaches to commercialization and gathered extant knowledge on “commercialization networks” from the multidisciplinary literature of innovation management, marketing, management, technology, entrepreneurship, and other relevant disciplines. Networks for commercialization have been linked to divergent network approaches, such as industrial networks, social networks, strategic networks, and entrepreneurship networks. According to the findings, customers and users, distributors, complementaries, suppliers, investors, associations, public organizations, and policy makers and regulators can support commercialization by performing practical commercialization tasks, facilitating innovation adoption/diffusion and creating markets. We also identified four modes of contribution. In terms of methods, qualitative research dominates current examinations on the topic while longitudinal research and investigations from multiple network actors' perspectives are almost absent. The results also indicate a need to develop coherent conceptualizations and accumulate knowledge that would strengthen the theoretical basis of the research. A pivotal contribution of this article is that it is the first to generate an integrative framework and a research agenda on networks for commercialization — a theme that is emergent, multifaceted, and crucial to innovative companies.     

Facilitating open innovation processes through network orchestration mechanisms

Participation in open innovation networks presents challenges, as firms must recognize value before being willing to openly collaborate, yet opportunities typically cannot be realized without active engagement. Innovation intermediaries can address these tensions through orchestration mechanisms which create value at different levels of innovation networks. This paper addresses an important research gap by identifying the role of intermediaries in delivering open innovation activities across different levels and describing how these activities form interrelated orchestration mechanisms. A longitudinal case study follows the development of an open innovation network from inception, based on interviews and observations with participants including start-ups and large firms. Findings highlight how intermediary activities and practices align with orchestration mechanisms used simultaneously at different levels and create value for members. A multi-level analysis contributes to the open innovation literature by describing the interdependent nature of value creation within the innovation intermediary model.     

Heading for new shores: Do service and hybrid innovations outperform product innovations in industrial companies?

This study investigates the financial outcomes of product, service, and hybrid innovations in industrial markets. To date, empirical research has focused on product innovations, yet industrial firms are increasingly competing with innovative services to maintain their competitive edge. This study assesses the financial impact of service and hybrid innovations compared with more traditional product innovations. We develop a unique data set that combines information on companies' innovation activities with objective financial data. From a sample of 348 German industrial firms, the analysis reveals that service innovations do not outperform product innovations in industrial markets. A focus on service innovations only pays off in highly price-conscious markets. In contrast, hybrid innovations, referring to the simultaneous market introduction of new products and services, have a positive effect on firm performance above and beyond pure product innovations. This effect is particularly pronounced in competitive markets and under conditions of high customer concentration. In sum, this study demonstrates that hybrid innovations outperform both, pure product and service innovations in industrial markets.     

The sites and practices of business models

This paper examines the concept of business models. Drawing on the business model literature, we first identify technology, market offering and network architecture as the three core elements of business models. The theoretical routes of each element are then examined through the associated literatures: technology and innovation studies, industrial marketing, operations strategy, and evolutionary economics. Multiple dimensions of each element are identified and the resultant framework is used to explore developments within the recorded music market across three centuries.Through changes in the recorded music market since the 1870s, we explore how business models emerged, took on multiple sites and evolved through their practice over time. We look at how interlinking business models become spread out across the business network as different network actors play their part. The recorded music market generates important insights into how business models are created, developed and practiced. We suggest that firms, business networks and markets form embedded systems within which multiple overlapping business models can be considered as constituent parts. In this way, the business model is understood as having agency to shape action; but in turn actions (of others in the business network as well as within the firms themselves) also shape the business model.     

Design-driven laboratories: organization and strategy of laboratories specialized in the development of radical design-driven innovations

Nowadays, consumers are paying increasing attention towards the socio-cultural aspects of products. For this reason firms must consider the need for linguistic and semantic innovations as well as technological and functional innovations. Historically, the knowledge needed for each kind of innovation has been separately developed and interpreted: while technological knowledge is developed by industrial R&D centers, the knowledge about socio-cultural trends is often tacit and developed by design studios and marketing agencies. The paper analyzes nine in-depth case studies about companies that develop radical design-driven innovations for the household environment. It aims to identify the principal characteristics of the companies' R&D organizations [their design-driven laboratories (DDL)]. It introduces a classification of DDL that reveals how specific organizational characteristics might facilitate different innovation strategies.     

Countervailing effects of value and risk perceptions in manufacturers' adoption of expensive,discontinuous innovations

Both value and risk perceptions are germane to industrial firms' adoption decisions involving discontinuous innovations. Yet a surprisingly limited number of studies examine how these two considerations jointly influence the innovation adoption phenomenon. We intend to fill this gap by studying the countervailing and context-dependent effects of value and risk perceptions on industrial firms' intention to adopt discontinuous innovations.A conceptual model is proposed and tested with data collected from influential decision makers in pharmaceutical manufacturers on their decision to adopt the modular facility technology, a costly, discontinuous facility construction innovation. The findings confirm the offsetting roles of value and risk in affecting adoption and reveal the moderating effects of external market pressure in that both value and risk assume greater roles in affecting adoption as external market pressure increases. Furthermore, our results show a positive effect of external market pressure on value, and negative effects of external market pressure and internal adoption readiness on risk.Our study contributes to the innovation diffusion and industrial marketing literatures by: (1) studying the joint and countervailing effects of value and risk perceptions on adoption decisions by manufacturers, (2) considering the contextual influences on industrial adopters' value and risk perceptions, and (3) gathering data from influential decision makers for a major capital investment decision.     

An activities-based approach to network management: An explorative study

Over the last few decades, the industrial marketing literature and the business network literature have promoted a holistic approach to marketing and provided a framework for understanding interorganizational networks. However, our understanding of how interorganizational networks govern themselves when developing innovations is still limited. Most network management literature does not focus on the activities employed by network actors and/or does not recognize that there may be different modes of network management. This study explores how, why and in which combination network management activities are employed in a network and in doing so proposes a new conceptualization of network management. Using primary and secondary data pertaining to eleven innovation projects, this study reveals how network management consists of combinations of (rather than individual) management activities undertaken to manage a network. This study identifies three distinct modes of network management: basically coordinated, control-oriented and reward-oriented. Moreover, this study proposes that network actors try to match the management mode to their prevailing mental model as well as the type of network (e.g. in terms of project innovativeness).     

Copycats among underdogs - echoing the sharing economy business model

The sharing economy has gained traction in several industry sectors by establishing ever-new platforms, with digital intermediation and peer-to-peer exchanges at the heart of the business model. Most research on the sharing economy concerns the phenomenon level or focuses on the operations of single platforms. This paper connects various sharing economy platforms by asking: How has the sharing economy spread to new platforms? The purpose of the paper is to explain the pattern of spread of the sharing economy business model. Findings point out a seamless, unobtrusive pattern echoing characteristics of the sharing economy business model across distant sectors to avoid competition while reproducing activities in ever-new resource settings. The paper continues the exploration of the sharing economy related to industrial marketing through moving from the individual platforms to the way they lead to new ones while acknowledging how the innovative model for new platforms is highly based on mandates created through acknowledging oneself as a role model successor. Such a spread mechanism redefines innovation newness, adaptation and diffusion, and raises new insights to understand how current business landscapes would be under the possible transition into a new logic of operations.     

Drivers of Outsourced Innovation: An Exploratory Study*

The outsourcing of innovation has been on the rise for years, but research in this area lags behind industry practice. Interviews with managers and a theory base grounded in transaction cost analysis are used to guide the development of an exploratory model that details potential drivers of the outsourcing of innovation activities. Using industry‐level data, the proposed model is partially tested using two distinct regression analyses that reveal significant effects both contemporaneously and persisting over time. Several of the proposed drivers of outsourced innovation are shown to be significant, including exploratory research performed and profit margin. The finding that exploratory research performed is significantly related to the outsourcing of innovation activities represents a significant contribution to the innovation and organizational learning literatures. As well, finding a relationship between margins and organizational sourcing fills a gap in the business to business marketing literature. Managerial implications are drawn for both managers of the innovation process in traditional firms and those in firms wishing to garner outsourced innovation contracts. The drivers found to be significant in this study should allow for better resource planning from innovation managers in traditional firms as well as better targeting of perspective clients from firms seeking contract innovation business.     

An institutional analysis of supply chain innovations in global marketing channels

The adoption of sophisticated supply chain innovations by trading partners in global channels of distribution is often limited by the institutional context of the international transaction. In particular, the regulatory, normative, and cultural-cognitive elements of institutional environments around the world can enhance or inhibit the ability of trading partners to craft the contractual, ownership, and social elements of institutional arrangements required by an innovation. Because supply chain innovations often require costly, new investments and activity sets, firms may be reluctant to participate in an innovation unless a new institutional arrangement can be crafted to provide adequate safeguards and guarantees. A conceptual model is developed to explain the role of institutions in the successful deployment of supply chain innovations in global marketing channels.     

The Role of Marketing Resources in Radical Innovation Activity: Antecedents and Payoffs

While radical product innovations represent significant engines of firm growth, questions remain over whether marketing helps or hurts (1) a firm's radical product innovation activity and (2) its rewards from radical product innovation activity. By attaching an attention‐based view of the firm to a market‐based assets view of marketing, this paper examines the role of three marketing resources—market knowledge, reputation, and relational resources—on radical innovation activity. Our conceptual framework posits differentiated effects among marketing resources as antecedents of radical innovation activity and as moderators of its impact on firms' financial performance. Using a survey of a broad set of high‐tech business‐to‐business (B2B) firms to test hypotheses, it is found that firms with strong relational resources enjoy a higher propensity for, and stronger financial rewards from, radical innovation activity. Reputational resources come with a trade‐off as they hurt the incidence of radical innovation but enhance its financial rewards. However, market knowledge resources appear to hurt both radical innovation activity and its financial rewards. Our results point to the multifaceted role of marketing in radical innovation activity, which is unlikely to come with a single benefit or liability as prior work often posits. Rather, our research heightens the alertness of managers to assess their firms' marketing strength as a bundle of stocks of several marketing resources. Managers must understand the distinct benefits and drawbacks of each resource in developing and launching radical innovations. Our research underscores the differentiated value of marketing in radical innovation activity in B2B high‐tech contrary to the entrenched idea of a limited or even stifling role of marketing in this context.     

Technological and non-technological innovations,performance and propensity to innovate across industries: The case of an emerging economy

Innovation in a firm may be non-technological, such as organizational and marketing innovation, and technological, such as product and process innovation. The aim of this article is to explore how different types of innovation affect the innovation development of the firm across industries. We chose Chile as an emerging market context. Our results show that only product innovations affect significantly innovation performance across industries. However, different types of propensities to innovate are affected differently by technological and non-technological innovations. We discuss implications for managers and policy makers in emerging economies, in which data tends to be scarce to develop new policy models and increase the effect of non-technological innovation on innovative performance.     

Value champions in business markets: Four role configurations

Customer value management has become a key priority in business markets, but many firms struggle to implement it. While the prior literature has considered this primarily as sales responsibility, emerging research suggests that best practice firms employ dedicated value champions to implement customer value management. However, at present, we know little about the characteristics, and the tradeoffs between different value championing approaches in business markets. Based on a discovery-oriented field research and interviews with 59 managers in 11 firms, this study illustrates four alternative role configurations firms use to employ value champions, and unpacks the characteristics and implications of each approach. Collectively, this study advances industrial marketing theory by shedding light on an emergent and contemporary management practice, and offering practical insights into how firms can employ value champions in business markets.     

Leveraging External Sources of Innovation: A Review of Research on Open Innovation

This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations. Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation. This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.     

A network perspective on idea and innovation crowdsourcing in industrial firms

Crowdsourcing has been attracting the attention of both academics and practitioners over recent years. The aim of this article is to contribute to the current body of knowledge on innovation in networked contexts by systematically analyzing various crowdsourcing configurations available to industrial firms. We first develop a categorization of crowdsourcing in industrial firms comprising four distinct configurations: internal crowdsourcing; community crowdsourcing; open crowdsourcing; and crowdsourcing via a broker. We then proceed to draw from the literature on industry networks to further deepen our understanding of how these four distinct configurations can contribute to business and innovation activities of a focal industrial firm. Specifically, we focus on the structural properties, nature of collaboration, and governance of crowdsourcing networks. This novel combination of crowdsourcing and network research delivers new insights that enrich current understanding on various options available to industrial firms operating in networked contexts to facilitate their innovation processes.     

Role of big data and social media analytics for business to business sustainability: A participatory web context

The digital transformation is an accumulation of various digital advancements, such as the transformation of the web phenomenon. The participatory web that allows for active user engagement and gather intelligence has been widely recognised as a value add tool by organisations of all shapes and sizes to improve business productivity and efficiency. However, its ability to facilitate sustainable business-to-business (B2B) activities has lacked focus in the business and management literature to date. This qualitative research is exploratory in nature and fills this gap through findings arising from interviews of managers and by developing taxonomies that highlight the capability of participatory web over passive web to enable different firms to engage in business operations. For this purpose, two important interrelated functions of business i.e. operations and marketing have been mapped against three dimensions of sustainability. Consequently, this research demonstrates the ability of big data and social media analytics within a participatory web environment to enable B2B organisations to become profitable and remain sustainable through strategic operations and marketing related business activities. The research findings will be useful for both academics and managers who are interested in understanding and further developing the business use of participatory web tools to achieve business sustainability. Hence, this may be considered as a distinct way of attaining sustainability.     

Value in business and industrial marketing: Past,present, and future

This article offers an overview of research on the ‘value’ that businesses and industrial marketers analyze, create, and deliver. First, value literature (up to and around 2005 and post 2005) is discussed. This review highlights the changes in our notions of value and helps to identify seven areas for consideration that should drive future research: value proposition, relationship form, capabilities management, value metrics, temporal horizon, innovation imperative, and tactical focus. Following this depiction of value analysis, value creation, and value delivery, we present a process model for value orchestration in business and industrial marketing. Three activities collectively form the basis of value orchestration, namely structuring activities, bundling activities, and leveraging of resources.     

Complementing open innovation in multi-business firms: practices for promoting knowledge flows across internal units

Over the past decades open innovation (OI) practices have gained prominence among both scholars and practitioners as a mean to accelerate time-to-market and reduce development costs of innovations. Thereby scholars have nearly exclusively focused on cross-boundary knowledge flows between the focal firm and (its) external collaborators. This paper argues that such a focus limits our understanding of how multi-business firms with a diverse knowledge base profit from internally applied open innovation practices that in turn provide complementary benefits to OI. We build on the current literature by investigating and describing OI activities that are conducted within the boundaries of the multi-business firm. Based on a multiple case study of 23 collaboration practices conducted across 14 firms, our findings reveal 5 archetypal forms of internally applied open innovation activities. We draw on the literature of cross-divisional innovation and crowdsourcing to highlight how these archetypes differ in terms of their purpose and underlying managerial processes. Multi-business firms regularly rely on internal practices due to lower transaction costs and for stimulating a collaborative culture. We conclude that internally applied OI practices are effectively stimulated by a combination of non-monetary reward systems and purposive integration mechanisms.