What Drives Business Model Dynamics? A Case Survey Mark de Reuver, Delft University of Technology The Netherlands g.a.dereuver@tudelft.nl Harry Bouwman Delft University of Technology The Netherlands w.a.g.a.bouwman@tudelft.nl Ian MacInnes Syracuse University United States imacinne@syr.edu Abstract In the turbulent world of e-business, companies can only survive by continuously reinventing their business models. However, as most literature studies business models as snapshots in time, it is ill-understood how changing market, technology and regulation conditions generally drive revisions in business models. This paper studies which type of external drivers are strongest in forcing business models to change throughout their life cycle. To do so, we survey 45 longitudinal case descriptions on business model dynamics of (networks of) organizations in various industries. According to our results, technology and market forces are most important drivers of business model dynamics, while regulation plays only a minor role. Especially for startups, the effect of technology and market drivers is strongest during the early stages of a new business model, while for established, large companies the effects are moderate over time. 1. Introduction Business models are not static, but have to be revised over time to fit changing technology, market and regulatory conditions. The design choices once made while conceptualizing initial service and underlying technology are typically altered during subsequent stages of market rollout and commercial exploitation. Although part of these business model dynamics may be attributed to endogenous forces, they are also triggered by external events, such as entry of new players on the market, standardization of new technologies, and shifting regulatory regimes. Understanding these dynamics is highly relevant for practitioners to help them maintain the flexibility to adapt their business models to changing conditions over time. In addition, insight in business model dynamics would help in developing and refining design methodologies for business models (e.g. [4]). From a research point of view, much attention has been given to studying snapshots of business models at a certain moment in time, i.e. using a static approach. Although recent research has given some clues about business model dynamics [3, 16, 22], the exact relation between external forces and business model design choices remains an unexplored area. The objective of this paper is to study which external drivers are most relevant in the subsequent phases of business model life cycles. In order to do so, we conduct a case survey [15, 24], studying a large number of existing case descriptions of business models of specific service offerings. The present analysis can be considered a logical next step in the ongoing validation and refinement of a previously developed dynamic business model framework [5, 6]. Section 2 will provide a concise overview of existing literature on business models, followed by our research model in section 3. Section 4 details the methodology, including reliability measures of the data. Then, section 5 reports the results. Section 6 discusses limitations of the approach and section 7 concludes with main implications of our findings for our research model and practice. 2. Theoretical background The business model concept originates from various fields, including e-business, strategy, supply chain management and information systems [12, 21]. They are mainly a response to the urge to explicate the value of information and communication technology driven innovations for organizations and users. Studying business models serves various purposes, such as understanding the elements and their relationships in a specific business domain; communicating and sharing this understanding to the outside world; using them as a foundation for change; measuring the performance of