Journal of Business & Financial Affairs

An Approach Based On Problem Formulation and Problem Solving For Explaining Business Model Innovation Processes

Abstract

Masoud Karami*

This study illustrates how industrial enterprises innovate their business models. It proposes issues as a theoretical notion to explain business model innovation processes, drawing on three case studies of top business-to-business organisations transitioning from product-based to servicebased business models. We demonstrate how posing and resolving difficulties direct the hunt for a workable business model and explain why specific problem posing and resolving activities cause businesses to switch between backward- and forward-looking searches. While switching to a backward-looking search is motivated by the sense of significant alternative costs, switching to a forward-looking search is motivated by the perception of failure to continue with an established way of working. By conceptualising the procedure, we contribute to the literature on business model innovation and servitization.