Business Model Innovation in Established Firm?

Summary The concept of Business Model Innovation (BMI) has become more and more influential in strategic management research over the last fifteen years and introduces the additional notion of innovation to Business Model (BM). BM is defined as “the design or architecture of the value creation, delivery and capture mechanisms” of a firm. It hereby raises a number of crucial theoretical and empirical questions: what are the drivers and facilitators of BMI? Whereas drivers of BMI remains in current investigation within academic research, organizational practices such as Corporate Entrepreneurship (CE) as increasingly been recognized as a legitimate path to level organizational performance. Indeed more and more companies rely on CE practices to remedy the shortcomings in their existing innovation processes. The aim of this paper is to investigate under which conditions do CE practices foster BMI in an established firm. Based on the CE and BMI literatures, we analyze the empirical case of a French airline Constellation using a qualitative single embedded case study design. The case of Constellation is an interesting example to use because the airline started to encourage practices such like CE to foster BMI. We highlighted several tensions conditions under which BMI is enabled thanks to CE practices with a specific focus on the conflicts between the revenue streams of the existing firm and the BMI ones.