Business Model Portfolio Management in Incumbent Firms

This paper attempts a fresh look at the business model concept in the context of incumbent firms. Incumbent firms – different to startups – usually operate several business models at the same time, which are typically centered on strategic business model components such as resources or activities. These strategic components are leveraged across business models in order to increase the probability for profitable growth. The paper shows the importance of a change in perspective for corporate managers in viewing their corporation as a structured selection of business models that operate under a corporate strategic logic, i.e. a business model portfolio. We elaborate on the different dimensions and aspects of managing business model portfolios: (1) the nature of business model interrelations (independency, hierarchy and co-dependency), (2) business model portfolioeffects (super- and sub-additive effects), and (3) management tasks for business model portfolio management (reconfiguration, innovation, elimination andcoordination).