Reshaping strategies for incumbents' business models when faced with subversive threats

Abstract

Abstract: This paper focuses on how incumbents reshape business models when faced with entrants' subversive threats. So we design a "gear" expression model for business models consisting of two components, namely the value proposition and implement system of value proposition, then by combining Casadesus-Masanel&Ricarta's two-period game model, we develop a general framework for constructing business model, which consists of five components: situation, value proposition, implement system of value proposition, strategy and tactics. Using this general framework, the paper deduces the process of incumbents constructing business models and playing game with entrants in the monopolistic market and duopolistic market by establishing the mathematics model, find out that the business model really affects enterprise's competitiveness, and the value proposition or its implement system should be innovated when the product quality of incumbent is lower than that of its competitors..

Key words: business model, incumbent, entrant, game

CLC Number:

F272.3

Li Yongfa, Li Dong. Reshaping strategies for incumbents' business models when faced with subversive threats[J]. Science Research Management, 2015, 36(4): 145-153.

References

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