• A Grounded-Theory Study on the Process of Business Model Innovation Based on Activity-based Interdependence Perspective: Illustration by Google 1996–2008

Abstract

Purpose – The objective of this research is to propose an adjusted grounded theory regarding business model innovation research that is appropriate for an activity-based interdependence perspective.

Design/methodology/approach – Choosing the era spanning 1996 to 2008, in which the various companies in emerging industries are vying for supremacy and trying to devise winning business models, we focus our attention on Google’s activities. This was also a period when hegemons began to emerge during the e-commerce development process, and we have used this phenomenon to illustrate our analysis.

Findings – Using the adjusted grounded theory research methods that we have proposed, we identified the process of evolution regarding the four phases of Google’s path dependent development, and for each phase, we used leverage factors to balance two types of innovation activities—exploitation and exploration. As Google’s business model evolved, these leverage factors gradually formed the core of Google’s business model.

Research limitations/implications – Our research findings can help to stimulate the business model design thinking of new industry businesses, and also provide operational value to the findings of business model innovation research so that they can be applied to business fields as sources of inspiration or for actual implementation.

Practical implications/Social implications – In regard to business managers or entrepreneurs, the review of past activities and the necessary recombination of activity linkages are important sources of business model innovation.

Originality/value – Our method and approach aims to enable academia and industry to gain an understanding of the business secrets of a specific company by analyzing the said company’s business model. Companies can also use this method to develop innovative business models of their own or to conduct cross-industry learning.

Keywords – Business model innovation, Activity-based, Interdependence, Grounded theory, Operability