Simulation-based business model innovation process for business-to-business contexts

Abstract

Innovating service-oriented business models in industrial business-to-business (B2B) contexts presents a complex and risky endeavor. Recently, System Dynamics (SD) modelling and simulation has been suggested as a tool for prototyping and experimentation in business model innovation (BMI). However, knowledge of how to best utilise SD in BMI is scarce. Therefore, our research objective was to develop a new simulation-based approach for BMI, particularly for B2B contexts. We conducted a two-and-a-half-year action design research study with two industrial firms, Alpha (start-up) and Beta (incumbent firm). We developed and simulated new service-oriented business models as part of the two BMI teams. Our study resulted in the simulation-based BMI process containing phases, tools/techniques, and goals. Our findings demonstrate that SD, as a dynamic and visual modelling language, facilitates collaborative and cognitive activities during BMI, such as communication, design, evaluation, and decision-making.