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Business
Analysis of business models models
innovation – a multiple case study innovation
Moema Pereira Nunes
Instituto de Ciências Sociais Aplicadas, Universidade FEEVALE,
Novo Hamburgo, Brazil, and 17
Ana Paola Russo Received 28 February 2017
Accepted 25 October 2017
Pontifícia Universidade do Rio Grande do Sul (PUCRS), Porto Alegre, Brazil

Abstract
Purpose – This paper aims to analyze the business model innovation in medium and large Brazilian
manufacturing companies located in Rio do Sul State.
Design/methodology/approach – A holistic multiple case study in five companies was developed. Data
were collected through interviews and analyzed according to the content analysis technique.
Findings – The main motivation to business model innovation was the innovation in products and services,
while the difficulties were the factors relating to the cost. The most common practice among cases was
innovation in value proposition and the most widely used method was learning-by-searching. While part of
the theory was demonstrated in the case studies, new motivations and practices were identified. The
investigation of the learning process on business models’ innovation is pioneered in this study. Further
studies on this subject are required.
Originality/value – New business models are likely to provide new opportunities to better address
customer needs, generating differentiating itself from its competitors. It is a subject little investigated in the
international context, and there are no studies to investigate the experience of Brazilian companies.
Keywords Innovation, Motivations, Learning, Business models, Difficulties
Paper type Research paper

1. Introduction
Business model innovation (BMI) consists in one of the greatest challenges of this business
era. With globalization, the increased focus on the customer, high number of competitors,
economic changes, interconnectivity between markets and technological changes,
organizations are forced to rethink their traditional models and develop new business
formats to gain competitive advantage (Chesbrough, 2003; Johnson et al., 2008; Lindgardt
et al., 2009; Teece, 2010; Casadesus-Masanell and Ricart, 2011; Lee et al., 2012; Schneider and
Spieth, 2013).
A business model (BM) can be defined as a way for a company to deliver benefits for the
clients, the organization of the company to attend its needs and the way the company
captures value through those actions (Teece, 2010). BM is also defined as relationships and

© Moema Pereira Nunes and Ana Paola Russo. Published in Innovation & Management Review.
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2515-8961
Conflict of interest: The authors declare no conflicts of interest. DOI 10.1108/INMR-11-2018-0085
INMR aspects involving the companies’ approach to offer benefits that generate profits through
16,1 their target audience (Sinfield et al., 2012).
According to Giesen et al. (2010), the BMI is essential to the achievement of companies’
success in the complex and dynamic environment. To the cited authors, companies must
understand how and when to renew, re-think and adapt their BM so that they do not become
obsolete. Regarding the organizational performance, Zott et al. (2011) state that BMI is an
18 essential aspect to enhance the companies’ performance. Bonakdar (2015) states that
companies that innovated their BM are present in the current marketing environment ahead
of their competitors.
Understanding the process of BMI, according to Sinfield et al. (2012), can lead to
discover new market opportunities, to better attend the clients’ needs, putting the
company in a place ahead of their competitors. Focusing on results, Teece (2010) argues
that new or adapted models can result in cost reduction or enhance the value perception
from the customer’s perspective and, if not easily replicated, the model can generate high
results for the pioneers.
According to Chesbrough (2010), both the academic and business fields focus highly on
the innovation of products and services and technology and little on the challenges of the
topic of this study. For this author, the BMI will be as essential as the technological
innovation as a well-structured and constantly innovated model can overcome the
investments perspectives in technology. Thus, Zott et al. (2011) state that, besides
implementing technologies, companies must define a good BM to reach their market
potential.
Despite the recent academic interest on the topic, research in this field is limited
(Bonakdar, 2015). According to Teece (2010), the essence of BMI and their applications in
the organization and in society should be exploited to improve the understanding of BM
and their involvement in entrepreneurship and innovation. The effects of BMI should be
studied and deepened to improve the understanding of the results and the performance
that this type of innovation provides (Schneider and Spieth, 2013). Spieth et al. (2014)
consider that BMI is a recent and not yet fully defined topic, but it is becoming
increasingly important to the business environment, it is a promising and important field
for research.
Considering the need for more studies related to the field and the absence of studies that
investigated Brazilian companies, we argue that: How does BMI happen in Brazilian
companies? A delimitation was carried out in the study of manufacturing companies, from
medium to large-sized, located in the Rio Grande do Sul state. Companies were selected by
accessibility and convenience. The main objective of this article is to analyze how does BMI
happens in Brazilian manufacturing companies, from medium to large-sized, located in the
Rio Grande do Sul state. The specific objectives include the investigation of BMI practices
adopted by the companies, the difficulties faced to innovate and the organizational learning
acquired with this innovation process.

2. Innovation
The first studies on innovation start with Schumpeter (1934), to whom the innovation
consisted of new ways of organization, with new sources of materials and new markets.
Almost one decade later, when referring to the economic changes and replacing of products
and process of the market and the industry, Schumpeter (1942) stated that the process of
revolutionizing, destroying and creating a new economic structure, called “creative
destruction,” is a fundamental fact for the capitalism must be continuous. In the beginning
of the 1960s, Schumpeter (1961) describes innovation as major disruptions related to
products, services and processes, representing a break with previous paradigms to generate Business
wealth and differentiation. models
In the early 2000s, Chesbrough (2003) states that with the strong changes in the economy
and competitive market, the companies must be prepared for future changes using
innovation
innovation through the adoption of new practices, the development of new technologies and
the creation new products, services or processes that enable them to face this new market.
Similarly, Prahalad and Ramaswamy (2004) contribute to a new approach and define
innovation as the incorporation of new technologies aiming to increase the competitiveness
19
and added value of the organizations in the market. Tidd et al. (2008) present the innovation
as the development of something new that adds value, affecting positively the performance
and position of the companies. Innovation is the production of new products, services,
production and organization methods that are new to the company and to the market
(Johannessen and Olsen, 2011).
According to Norman and Verganti (2014), there are two degrees of innovation: radical
innovation and incremental innovation. These authors classify the radical innovation as
something completely new, never done before, which introduces new paradigms, creating
potential and opportunities for big and significant changes. The incremental innovation is
classified as making improvements on what already exists, making little changes to enhance
the performance and improve functionalities or applications. In addition, Christensen and
Raynor (2003) present the concept of “disruptive innovation,” characterized by the creation
of new markets or the transformation of existing markets. The types of innovation are
summarized in Table I.
To understand what makes the organizations to innovate, Simantob and Lippi (2003)
present two groups of reasons: technological and economic. The first involves:
 developing new products and services;
 improving production methods;
 copying innovative companies;
 adapting technologies from other sectors or industries to their context; and
 improving techniques.

The second one prioritizes:

 innovation of products, which include replacing products, increase the portfolio and
expand in new markets; and
 innovation of processes, which involves flexibilization of the manufacture and
reducing their costs, having better work conditions and reducing the pollution.

The approach of the Oslo Manual (EUROSTAT, 2015) presents some factors that stimulate
the innovation in corporations:
 economic factors, which involve high costs and demand deficiencies, and affect the
development and differentiation of products and process improvement, to increase
sales and market share and reduce costs and prices;
 specific factors to a company, such as lack of qualified personnel or knowledge,
which involve investment in human resources, staff training and degree of
adaptation of the workforce in the labor market structure; and
 legal factors, as laws, regulations or tax rules, which involve access to information,
property rights, tax and administrative charges and environmental standards.
INMR Authors Types Definition
16,1
Prado and Product or service innovation Technologically new or improved products or services
Mañas (2014) Process innovation Production methods and/or new or improved
distribution
Management model innovation Improvement of the existing management practices
Marketing innovation New approached in 4 P’s of marketing
20 Business model innovation Reformulation of the existent business model
Tidd et al. Product innovation Changes in the products or services
(2008) Process innovation Changes in the way products or services are created
and distributed
Position innovation Changes in the way products and services are
introduced to the market
Paradigm innovation Change in the mental models of work
Sawhney Offer innovation Create innovative products and services
et al. (2006) Platform innovation The use of the same platform to create offers deriving
from the first one
Solution innovation Create integrated offers to solve problems of the
clients
Innovation in clients Identification of the non-revealed needs of the client
and the non-target audience
Innovation in client experience Re-shaping the interaction with the client through all
contact points
Innovation in value capturing Re-define new means through which the company will
be paid
Process innovation Re-design the key operational processes
Organizational innovation Change the business or the company’s structure
Innovation in the supply chain Re-thing the way the products are supplied, delivered
and outsourced
Presence innovation Create new distribution channels or contact points
Relationship innovation Create relationship intelligence and integrated offers
Brand innovation Enhance the brand concept and its positioning
EUROSTAT Production innovation Introduce a new or improved product or services
(2005) Process innovation New or improved production and distribution
Marketing innovation New approaches in 4 P’s of marketing
Organizational innovation New practices and business methods
Table I. Source: Developed based on EUROSTAT (2005, p. 23), Sawhney et al. (2006, p. 78), Tidd et al. (2008, p. 30)
Types of innovation and Prado and Mañas (2014, p. 2)

As difficulties for innovation, Simantob and Lippi (2003) point out three main reasons:
 identifying innovation as a topic for academicians with no real market experience;
 not incorporating an innovation culture;
 surviving from a past innovation;
 not continuing the innovation processes;
 having excessive risk aversion;
 accommodating in closed systems and not seeking new formats; and
 being influenced by macroeconomic and political scenarios.

With a more specific approach, the Oslo Manual presents five factors that turn the
innovation in organizations difficult:
  factors related to cost, such as risks, high costs, and lack of internal and/or external Business
funding; models
 factors related to knowledge, such as low level of innovative potential, lack of innovation
qualified labor, limited information on technologies and markets and aversion to
organizational changes;
 market factors, such as uncertain demand and potential market established;
 institutional factors, like insufficient infra-structure, propriety rights, legislation and 21
regulation; and
 other reasons as surviving with past innovations and lack of demand (EUROSTAT,
2005) Zott and Amit (2001) show the attachment to traditional structures and
resistance to experimentation, while Chesbrough (2010) highlights the settings of
processes and the inability of managers to understand the potential value of a new
BM.

Antonello and Godoy (2010) identified and described five types of learning in the innovation
literature:
 learning-by-doing, which is internal to the company, focusing on the production
activities;
 learning-by-searching, which is mainly internal to the company, focusing on
commercial activities and on research and development;
 scientific learning, with both internal and external focus on the company and on
technological knowledge;
 learning-by-using, which is internal to the company, focusing on the use of products
and inputs; and
 spillover learning, which is external to the company, focusing on acquiring external
knowledge to copy already existent practices.

3. Business models
BM involves new ways of interaction that complement the studies on the innovation of
processes, innovation of products and organizational innovation (Zott et al., 2011). Timmers
(1998) defines BM as the description of the flow of products, services, information and
income sources, involved in the business and their activities as well as their potential
benefits. From a more comprehensive view of the ones involved and focused on the
outcomes, Dubosson-Torbay et al. (2002) define BM as the way the companies and their
stakeholders create and deliver value to their target market, to generate sustainable and
profitable income flows. With a concept towards the competitive advantage, Morris et al.
(2005) define BM as the roll of variables in strategy, organizational design, and economy to
create competitive advantage in organizations. Schneider and Spieth (2013) argue that BM
emerge as a new analysis unit and as a critical point to innovation.
To deepen the understanding of the topic and its applicability, Osterwalder and Pigneur
(2010) divide the BM into nine blocks. Complementing the concepts above, Lindgardt et al.
(2009) divide BM into two great dimensions comprehending six elements. The two
approaches are presented in Table II.
Considering the BM concepts and components presented in this section, we choose to
apply the Teece’s (2010) definition of BM as our conceptual base. According to him, a BM
INMR Authors Dimensions Elements Definition
16,1
Lindgardt et al. Value Market Customers that the company intends to attend
(2009) proposition segment
Product or Products or services offered by the company to
service offer satisfy the customer’s needs
Income model Model of how they will receive the proper offer
22 Operational Value chain How the company is organized to deliver the
model customer’s demand
Cost model How to structure the assets and costs to deliver
value to the client thus guaranteeing profitability
Organization How to make the collaborators deliver this value
and have competitive advantage
Osterwalder and Offer Value How to solve problems and satisfy the customer’s
Pigneur (2010) propositions needs
Clients Segment of Which segments of clients the company intends
clients to offer value
Channels How to deliver value to the customer
Relationship How the company interacts with each of their
with the client several targeted segments
Infrastructure Key resources Which resources to offer and deliver the value
proposition
Key activities Which are the main activities of the business
Key partners How to do the contracts with other companies to
perform the activities and raise funds for the
business
Financial Income model Result of the value proposition offered to the
Viability customers
Table II. Cost structure The monetary issues applied to the model
the Composition of
BM Source: Developed based on Lindgardt et al. (2009, p. 2) and Osterwalder and Pigneur (2010, p. 16)

represents the way a company delivers value to their customers, how it gets organized to
attend its own need and how it captures value doing these.

3.1 Business model innovation

Markides (2006) defines BMI as the discovery of a new and different model within an
existent business. On the other hand, Lindgardt et al. (2009) not only state that BMI includes
products, services, technologies or sales models but also point out that BMI is innovating
simultaneously between the business components, in a coherent, organized and planned
way. Lindgardt et al. (2009) mention that the BMI occurs when two or more elements of the
model are renewed to deliver value in a new and different way. According to Spieth et al.
(2014), BMI is defined as a new value proposition to the client and as the reconfiguration of
organizational structures. Casadesus-Masanell and Zhu (2013) classify BMI as new means
for the company to create and capture value for its stakeholders. Schneider and Spieth (2013)
define that BMI search to renew company’s business logic, instead of restricting the
innovation in products and services.
Johnson et al. (2008) pointed out four main success factors for BMI. Giesen et al. (2010)
consider three factors co-related to their definition of the types of BMI. These two concepts
are presented in Table III to a better understanding of the topic.
Teece (2010) says that innovative models can ensure strong differentiation and
competitive advantage in the market. However, they must identify and attend the
Authors Success factors Definition
Business
models
Johnson et al. Value proposition How to create value for the customers, helping them to solve an innovation
(2008) important problem or satisfy a need
Profit formula Description of how an organization creates value for itself while
it creates value to the customer. It includes:
income model (price vs volume);
cost structure (allocation of the main assets, direct costs, 23
indirect costs and scale economy);
margin model (transaction liquidity to achieve the expected
profit); and
resources speed (how fast the resources must be used to
support the targeted segment)
Key resources Interaction between:
staff:
technology;
products;
facilities;
equipment;
channels; and
brand
Key process Operational and managerial processes that allow to create and
raise the value, such as:
training, development, research, manufacture, budget;
planning, sales, IT and service;
rules and metrics (margins required for investment, credit,
contracts with suppliers); and
norms (determining the size of the investment opportunity and
the approach of consumers and company channels)
Giesen et al. Alignment Customer’s value
(2010) Internal alignment between industry, income and company’s
models
External alignment
Competencies and capacities
Analysis Business intelligence:
Strategic view
Financial model
Measures
Adaptation Leadership and change:
Visionary and innovative leadership
Support for decision of revolutionary innovations
Operational model:
Transparent processes
Scalable technology
Costs flexibility Table III.
Success factors for
Source: Developed based on Johnson et al. (2008, p. 62) and Giesen et al. (2010, p. 20) BM

consumer’s needs through an organization dedicated to carrying out actions to achieve this
goal. When studying the situations demanding BMI, Johnson et al. (2008) mention five
circumstances of opportunity:
 opportunity through disruptive innovation to meet the needs of consumers’ groups
that are excluded from a market due to the existing solutions being expensive and
complicated;
INMR  opportunity to capitalize on a new technology in a new BM or take a technology
16,1 already tested to a new market;
 opportunity to solve a problem and satisfy a consumer’s need not yet attended;
 need to distance from the disruptive innovations in the low market; and
 need to respond to a shift in the basis of competition.
24 Pohle and Chapman (2006) state that BMI is an optimal approach for the companies to face
the changes in creating value in instability times. Zott et al. (2011) reveal that BMI a key
factor for the good performance of companies and that their logic occurs through income
models and costs, value proposition and value capture. Bonakdar (2015) also considers that
BMI changes how the company organizes itself and works to generate value, thus
generating competitive advantage.
Considering that we previously decided to use Teece’s (2010) BMI concept to guide our
research, we had the same need regarding BMI. So, at this paper, we consider BMI as the
new configuration, due to changes in the forms of proposition, development and delivery
capacity of the company for its consumer.

4. Research method
Given the purpose of the study and the limited literature on the subject, it was chosen to
carry out an exploratory qualitative research through the development of multiple holistic
case studies. The case study, according to Yin (2010, p. 39), “[. . .] is an empirical
investigation that investigates a contemporary phenomenon in depth its context of real life,
especially when the boundaries between phenomenon and context are not clearly defined.”
[Freely translated from the original] Holistic multiple case study, according to Yin (2010), is
the study that contains more than one case, where each has its own context and the results
to be obtained must be similar or contrasting.
The cases investigated in this study were Brazilian manufactures companies, from
medium to large-sized, that have innovated in their BM. According to the Serviço Brasileiro
de Apoio às Micro e Pequenas Empresas [SEBRAE] (2015), following the criterion of the
number of employees, medium to large-sized companies are commercial and service
companies with more than 50 employees and manufactures with more than 100 employees.
The companies studied were selected considering accessibility and convenience. Table IV
presents the companies investigated in this research. To preserve the identity of the
companies, their names will not be disclosed in this article, once an identification by colors is
distinguishing them.
The description of the interviewees of the study is presented in Table V.
First, a documentary research was carried out related to each investigated company.
Company websites, scientific articles and reports were analyzed prior to the interviews to

Company Foundation Activity sector No. of collaborators

Blue 1980s Industrial automation 301-500

Yellow 1940s Chemistry, Plastics, and Equipment for Individual Protection 2,001-3,000
Red 1980s Fashion 1,001-2,000
Table IV. Green 2000s Electronics 200-300
Description of the White 1960s Building materials 500-700
investigated
companies Source: Developed by the authors
allow a better prior knowledge that qualified the interviews. The semi-structured interviews Business
were made based on a questionnaire developed with the support of the literature review. models
Table VI presents the data collection plan, with the identification of the objectives, research
categories and reference authors.
innovation
The interviews were held during the second semester of 2015. They were recorded with
the authorization of the interviewees. The transcriptions were analyzed according to the
content analysis technique following Bardin (2002) guides. The categories listed in Table V
were used to conduct the analysis. Successive readings of the interviews and the search for 25
categorizing allowed us to compare them, and the result of this analysis is presented below.

5. Motivations of the companies for business model innovation

The main motivating factor to BMI, as mentioned by the five interviewees, was the
innovation of products and services, related to the replacement of products, an increase of
the portfolio and expansion of the company in new markets. This is one of the motivations
reported by Simantob and Lippi (2003) in the group of economic reasons. Interviewee 2
states that operating in multiple markets is an essential and motivating factor because if the
Yellow Companies kept operating only in the footwear industry, the innovation would be
much more restricted. Interviewee 3 reveals that the increase in the portfolio and the
expansion of the market was a motivating factor for innovation to achieve new business
strategies. Interviewee 4 reveals that constantly investment in research and development to
produce updated products and differentiate themselves in the market is a motivating factor,
mainly for the Green Company, which is a technology company that must be constantly
renewed to stay competitive.
The second most common motivation was the legal factors, classified by the Oslo Manual
as laws, regulations or tax rules (EUROSTAT, 2005). This was mentioned by three of the five
interviewees, such as laws encouraging innovation and specific laws in some industries,
which influenced positively the management of innovation in companies. Interviewee 1
reports that the Law of Informatics and other complements played a key role in the success of
the Blue Company, due to grant funds for developing complex products such as those in its
segment. Interviewee 3 considers that the laws encouraging innovation often enable and
facilitate innovation, and motivate the implementation of an innovative solution more
quickly. Similarly, Interviewee 4 mentions that the tax benefits must be used to become more
competitive, as well as resources to develop new products to increase the portfolio.
One of the least-common factors, considered only by Interviewee 2, was the adaptation of
technologies from other manufacturers in your business, which Simantob and Lippi (2003)
present in the group of technological purposes as motivating factor. The interviewee states

Interviewee Company Position Education

1 Blue President Bachelor’s degree in Electrical Engineering

2 Yellow President Bachelor’s degree in Business Administration
Specialization in Marketing
3 Red Branding Director Bachelor’s degree in Financial Management
4 Green Executive President Bachelor’s degree in Business Administration
Specialization in Marketing
5 White Commercial Director Bachelor’s degree in Law
Specialization in Business Administration
Table V.
Source: Developed by the authors Interviewees
INMR Objectives Variables References
16,1
Identifying the Adapting technologies from other industries EUROSTAT (2005)
motivations of the Economic factors (high costs and demand Simantob and Lippi (2003)
companies to BMI deficiencies)
Specific factors (lack of specialized personnel or
lack of knowledge)
26 Legal factors (laws, regulation or tax rules)
Process innovation (flexibilization of
manufacture and costs reduction)
Products and services innovation (replacing
products, enhancing the portfolio and
expanding in new markets)
Presenting the Cost structure Giesen et al. (2010)
practices in BMI used Measures Johnson et al. (2008)
by the companies Income model Lindgardt et al. (2009)
Operational model
Key partners
Key process
Value proposition
Key resources
Strategic view
Identifying the Attachment to traditional structures EUROSTAT (2005)
difficulties to BMI Macroeconomic and political scenes Simantob and Lippi (2003)
Lack of an innovation culture Zott and Amit (2001)
Market factors (uncertain demand and potential
established market)
Institutional factors (infra-structure, propriety
rights, legislation, and regulations)
Cost-related factors (risks, high costs, and lack
of financial support)
Knowledge related factors (lack of qualified
labor, aversion to changes, and information)
Resistance to the experimentation
Surviving with past innovations
Revealing the Scientific learning Antonello and Godoy (2010)
learnings with BMI Acquisition, interpretation of information, and
implementation
Learning-by-doing
Learning-by-searching
Learning-by-using
Spillover learning
Table VI.
Data collection plan Source: Developed by the authors

that the innovation in the Yellow Company is considered as adaptive, using technologies
from other industries, by searching tendencies of innovation and technologies that were
never used in their markets.
Another factor mentioned only by Interviewee 3 was the innovation process, involving
flexibilization of manufacturing and cost reduction, a motive that was considered by
Simantob and Lippi (2003) among the economic reasons to innovate. Red company
innovated its manufacturing facility to obtain efficiency, machinery and processes gains, as
it enabled flexibility to attend the entire chain and increase of the agility in selling and
delivering products.
 Figure 1 presents the motivating factors identified by the interviewees for BMI according Business
to the literature studied. models
Economic and specific factors were not identified in the studies. However, the
interviewees pointed to other specific motivating factors of their business. Interviewee 2
innovation
shows that a motivating factor for the Yellow Company was a matter of defense because
with the onset of globalization a world without barriers and with free competition was being
predicted. They also understood that there was also an opportunity to enhance growth in 27
this new global BM. In contrast, Interviewee 3 states that the primary motivation was
achieving the view and the dream of the company, changing, influencing and leaving a
positive image on the market. Interviewee 5 points out that keeping on growing so that the
organization expands itself and can accommodate more projects, people and new challenges
is a motivating factor, thus being a desire of constant improvement.
The following motivations are presented as motivating factors that were not mentioned
in the literature: market pressure for innovation and differentiation, survival in a globalized
world, defense in face of the market changes, identification of growth opportunity with new
BM, improvement of processes, achievement of the dream and the company’s view and
positive image on the market. These motivations can be grouped as “Strategic Factors,” as
they are related with the planning and execution of the strategy of the companies.

6. Business model innovation’s practices used by the companies

The most frequent practice, used by all the investigated companies, is innovating in the
value proposition. It is considered by Osterwalder and Pigneur (2010), Lindgardt et al. (2009)
and Johnson et al. (2008) as one of the major dimensions of BMI.
The second most common practice, considered by four of the five respondents, was the
issue of key partnerships, defined by Osterwalder and Pigneur (2010) as the use of partners
that positively influence the business activities. The other most used practices, mentioned
by three interviewees, were the processes and key-resources of the companies, which
Johnson et al. (2008) consider as two of the four success factors to BMI.
The other two less common factors, mentioned only by two interviewees, was the
strategic view, defined by Giesen et al. (2010) in the analysis factors, and the operational

Cases
Factors
1 2 3 4 5
Products and services innovations (replacing products,
enhancing the portfolio, and expanding in new markets)
Legal factors (laws, regulation, or tax rules)
Adaptation of technologies from other manufacturers
Process innovation (flexibilization of manufacture and costs
reduction)
Economic factors (high costs and demand deficiencies)
Specific factors (lack of specialized personnel or lack of
knowledge)

Figure 1.
Motivating factors
Source: Developed by the authors
INMR model, considered by Giesen et al. (2010) as a group of adaptation factors, and by Lindgardt
16,1 et al. (2009) as the second group of factors composing the innovation in BM.
Interviewee 2 considers that the main point of the company’s innovation was the decision
to have three business areas divided by market segment and technologies, not focused on
just one sector. The interviewee says that the company opted for diversifying the business
in three simultaneous dimensions. The first dimension is geographical, from being a
28 company with a unique operating in Brazil to a company operating in all Latin America.
The second is the markets dimension, where 80 per cent of its operation was the footwear
industry, becoming a multi-market company. And the third, the business dimension, from
being a shoe components company to be a group of three companies that were in three
segments: individual protective equipment, chemical area focused on adhesives and sealants
and special plastics area of engineering and composites. Thus, the company made a
breakthrough in their BM through:
 value proposition, offering a broader portfolio and diversifying its customer
segment; and
 operating model, which involves the corporate design of the structure and value
chain enterprises and the strategic vision of dividing the company’s operations.

Moreover, it innovated in their key-resources through technology applied in each company

and brand consolidation, and in key-partnerships, through the formation of strategic
alliances, with cooperation with international companies, technological associations and
joint ventures, that enable a better and more consistent growth.
Interviewee 3 considers that one of their main innovations was the new value proposition
and strategic view of the business, both in market segment and range of products, leaving a
business that started only as men footwear, going to the market of women footwear, and then
going to the men’s clothing market, obtaining a broader view of the business. According to
the interviewee, the company has a continuous product innovation, both in visual and
technological, aiming at bringing new product categories, together with designers to brand
consolidation. Thus, the group innovated the resources and key-partnerships. The
interviewee comments that the group innovated in service because the company gave up a
sales model based on production per order, passing to make productions per demand to be
able to deliver faster, reduce disruption at the sales point and improve service to the client,
which is defined as an innovation in its key processes of sales and service.
Interviewee 4 reports that the company makes a sale besides the product, combined with a
business concept, through advice to the layout of projects and consulting. Thus, the company
innovated in its value proposition by offering quality products associated with a differentiated
service to the client, in a market where only selling the product predominates. The company
also has a high level of research and development, with a group of qualified professionals who
provide a vast capacity for fast development of products, with continuous production of high-
tech products, making innovation in their key processes of research and manufacturing.
Figure 2 lists the practices studied in the literature with those used by companies to
innovate in their BM. The data analysis shows that six of the nine BMI practices found in
literature are used by the investigated companies. The innovation practices in costs
structure, metrics and income model were not evidenced in the study. It is observed that new
dimensions of innovation practices in BMI are not presented in the cases studied.

7. Difficulties of the companies to business model innovation

The group of most common difficulties, mentioned by four of the five interviewees, was the
factors related to the cost. This is one of the five groups covered by the Oslo Manual
 Practices
Cases Business
1 2 3 4 5 models
Value proposition
innovation
Key-partners
Key-process
Key-resources
Operational model 29
Strategic view
Cost structure
Measures
Figure 2.
Income model Practices used by the
investigated
companies
Source: Developed by the authors

(EUROSTAT, 2005) that involve risks, costs, investments and financing. Interviewee 2
considers that the investment is a difficulty as it does not only represent the allocation of
financial resources but also of people and time. Similarly, Interviewee 3 comments that
resources are a constraint, as they require a financial investment capacity, risk assessment,
implementation time and people to manage innovation.
The second group of most common difficulties, as mentioned by three of the five
interviewees, is the institutional factors. Interview 1 states that the laws represent a large
difficulty to innovate in Brazil because they are very complicated and time-consuming
compared to other countries, with excess of changes in regulations. Interviewee 2 states that
some laws to encourage innovation have advanced, but they are still very bureaucratic, with
very complicated processes, which inhibit some companies to use the resources. Similarly,
Interviewee 5 comments that the environment for the innovative process in Brazil is very
unfriendly and considers that the risks of the initiatives become too high due to the
uncertainty degree caused by excessive changes in regulations.
Other common factor, also mentioned by three of the five interviewees, is the influence of
political and economic scenarios. Interviewee 2 says that the political and economic
instability make companies think in the short term and of survival, while innovation
requires effort to generate a satisfactory result. However, Interviewee 2 states that, in their
company, the team takes advantage of times like these to evaluate the innovation projects
that are being worked on to see which one of these is likely to come to the market faster, and
consequently get to grow with them to compensate the reduced purchases from the market.
Interviewee 3 considers that the political and economic scenario in the country generate
more fear in risk assessment and investment. Interviewee 4 mentions that the political
uncertainties directly affect their business because it makes the companies hold their
investments and stop receiving funding due to high interest rates.
The less common difficulty in the research, mentioned only by Interviewee 3, was the
aversion to organizational changes, conceptualized by the Oslo Manual (EUROSTAT, 2005)
among the factors concerning knowledge. The interviewee states that in cases of innovation
and changes, it is necessary to have people lined up with the strategy who can adapt
themselves. The interviewee understands that the innovation to be carried out must be
communicated clearly, so that the innovation process is no longer tiresome and time-
consuming due to the company failing in communicating the actions that will be taken.
INMR Figure 3 presents the difficulty factors identified by the interviewees for BMI, as it is
16,1 shown in the literature review.
In addition to the difficulties found in the literature, the interviewees mentioned other
limitations on their process of BMI. Interviewee 2 believes that incorporating innovation in
the organization’s BM is difficult. S/he believes that innovation must be top-down in the
structure, and if this is not an option, a corporate decision and is not part of the model
30 business, it will not succeed. The organization must deal with innovation in an organic and
systematic way, guiding everyone involved for this purpose. Interviewee 3 considers that
the main difficulty for the implementation of innovation is the cultural change. It is a
difficult, slow process that requires time to be understood, changed and adapted. With the
data analysis, it was possible to identify new difficulty factors reported by the interviewees:
the performance of companies in new markets, incorporation of the innovation into the BM,
cultural change of employees and transformation of ideas into something marketable,
generating outcomes.

8. Learnings acquired by the companies through business model innovation

The interviewees revealed their main acquired learning in the process of BMI as it is shown
in Table VII.
Regarding the influence of the learning in the company’s management, Interviewee 1
declares that the main influences were the change of mentality of the groups about the
constant search for generating value and the change of strategy of commercializing a
product. Interviewee 2 considers that the main influence when managing the organization is
acquiring professionals that fit the transformation profile, together with the training made
available through courses, training, lectures and technical visits.
In contrast, Interviewee 3 comments that the learning influenced the management model
by migrating from a more hierarchical process to a view of corporate governance, with the

Cases
Factors
1 2 3 4 5
Cost related factors (risks, high costs, and lack of financial
support)
Macro-economic and political scenes
Institutional factors (infra-structure, propriety rights,
legislation, and regulations)
Aversion to changes
Attachment to traditional structures
Lack of an innovation culture
Market factors (uncertain demand and potential established
market)
Knowledge related factors (lack of qualified labor and
information)
Resistance to the experimentation
Figure 3. Surviving with past innovations
Difficulties faced by
the investigated
companies
Source: Developed by the authors
Cases Learnings
Business
models
1 In the technology field, companies must relate to the world innovation
Everyone in the organization must be aligned with the challenge of being in constant renewal
and innovation to develop and commercialize high-quality products and technology, to create
market differentiation
2 The innovation is addictive when there are an innovation environment and transformation
motivating and uniting people. They get used to this environment of renewal and constant 31
change
Innovation must be sustainable: in the social aspect, it must make sense to the society, both in the
environmental and economic aspects
As the competence for innovation is built, it becomes very difficult to be copied because there is
the combination of innovation with a unique BM
The competitor cannot be seen any longer as a company with a similar product, but as a
competitor with a similar BMI
3 Staff and structural belonging to collaborate with innovation, culture change and evolution to
implement innovation and achieve results
Structured communication, because if an innovation has happened or if it will happen, this must
be communicated to all very efficiently, so that there are no alignment problems between the
company and the collaborators
4 Having elements to decide, analyzing where they want to reach and where the company is going
Having a structured planning of the innovation processes to obtain results consisting through
their products and services
5 Developing methodologies to use the tools of the field staff, of observation of users, training, and
knowledge, adding them to the projects, and then transforming this into a product. Creation of
tools to conciliate the conception and marketing understanding with the opportunities and risks
Table VII.
Source: Developed by the authors Acquired learnings

creation of a Council and committees and being more open and participatory for innovation
issues. Interviewee 4 states that the influence was due to the use of tools to monitor and
measure the performance of innovations and products developed in the company.
Interviewee 5 reports that the influence of these learnings was to reconcile the two majors
process of engineering and production to the marketing processes, sale and consumption,
made through adjustments in the structure and division of responsibilities, and political
power play of the organization, with the creation of tools, committees and accountability
groups.
Regarding the influence of learning in innovation processes, the Blue Company uses the
learning-by-doing method (Antonello and Godoy, 2010), which is internal to the company
and focuses on production activities. Interviewee 1 considers changing the company’s
strategy to gain access to the world market, to monitor trends and manufacture products
with increasing technology, to be able to compete on the level of international players,
improving its production. The Yellow Company used the spillover learning method
(Antonello and Godoy, 2010), which is external to the company and focusing on acquiring
knowledge from outside to reuse existing practices. Interviewee 2 states that the main
influence was the adaptive innovation, by searching tendencies of innovation and
technologies that were never used in their markets, aiming to fast the process and enhance
the dynamics of the creation of innovations. In the case of the Red Company, the innovation
learning method is learning-by-searching, defined by Antonello and Godoy (2010) as being
mainly internal to the company and focusing on commercial activities and research and
development. Interviewee 3 believes that the biggest influence was the creation of
INMR committees to present ideas, multidisciplinary innovations and new proposals of value for
16,1 the client. The Green Company uses the scientific learning method, that according to
Antonello and Godoy (2010) focus both internally and externally to the company and on
technological knowledge. Interviewee 4 states that the main influence was to establish a
process of hearing the needs and suggestions of the clients, evaluating these needs and to
where the market is going, debating with the responsible areas, doing research and
32 developing products that are more in line with the market expectations. Figure 4 presents
the methods of organizational learning related to innovation, according to the literature,
with methods used by the companies being investigated.
It is observed that four of the six learning methods addressed in the literature are used in
the companies investigated. The only method used by two companies is the learning-by-
searching. The other methods identified were scientific learning, learning-by-doing and
spillover learning. The methods learning-by-using and acquisition, interpretation of
information and implementation were not identified in the investigated cases. In addition,
they present a new learning reported by the interviewees regarding BMI that include new
market views, communication strengthening, cultural and structural change for innovation,
planning and decision-making tools and creation of different models to generate
competitiveness and positive feedback to the organization.

9. Final considerations
Considering the essential concept of BM developed by Teece (2010), which guided the
development of this research, and the BMI practices proposed by Osterwalder and Pigneur
(2010), it was possible to observe that BMI represent new ways of generating value through
changes that occur in different parts of the organization. Thus, it was realized that the BMI
represents not the sum, but the combination of innovations in several dimensions. Thus, the
new form of value generation stems from the way smaller changes combine within the
organizational context.
The BMI of the investigated companies occurs mainly boosted by the desire to expand
the markets, diversification and differentiation of products and services, to guarantee
competitiveness in the market. The processes occurred due to the identification of new
market opportunities and to the need to survive in the business environment.
It was noteworthy that innovative practices centered to products and markets are used,
such as the incorporation of services to the sale, widening of the existent portfolio and
expansion to other markets and target audiences, aiming at the growth and differentiation of

Cases
Learnings
1 2 3 4 5
Learning-by-searching
Scientific learning
Learning-by-doing
Spillover learning
Acquisition, interpretation of information, and
implementation
Learning-by-using

Figure 4.
Learning methods
Source: Developed by the authors
the company. Moreover, innovations in corporate and business structure are carried out, Business
such as the business division and operations by business segment and target audience, and models
creation of specialized departments that better organize and attend the organization’s value
innovation
chain. Practices related to research and development were seen, such as partnerships with
institutions and professionals that provide greater growth, quality and technology for the
company’s products and projects. BMI is also made possible by the learning methods related
to organizational changes, product manufacturing with technology, search for trends and 33
knowledge, study models and identification of needs and market opportunities for process
improvement and model redesign to generate more value to the client.
BMI occur through actions that involve creating and delivering value to the client with a
personalized and directed offer to different audiences, restructuring and organizing the
business and research, development and technology so that it generates value also for itself
with the outcome of these actions. Innovation happens also due to being addressed as a
business strategy and being incorporated into the culture of the organizations, with people
motivated and adapted to constant renovations and changes and with resources targeting
innovation.
Due to being a topic directly related to the business environment, some managerial
implications are proposed. The major one refers to the investigation of what the clients need
and what the company may do differently, through the value proposition, so that it
generates differentiation, recognition and competitiveness in the market, while the
companies also capture value for themselves. It is recommended that the organizations re-
think their business structure, their processes and resources to create value and evaluate
their markets segments and products offer to have a direction to where they intend to reach
and what they can do to achieve their objective. Moreover, it is suggested that the companies
address the innovation in their strategy and create an innovation culture within the
organization to focus all efforts to the same objective.
For future studies, it is recommended the investigation of measurable aspects, such as
the financial results gained by the companies through BMI, to understand what the
innovation will bring to them. Moreover, it is recommended to investigate companies
operating in the same sector, so that it is possible to have more comparison between the
answers and behavior of the companies related to BMI. A comparative study is also
proposed between the group of companies that did not innovate in their BM and a group of
companies that did innovate, to make a comparison of the differences and similarities in the
clients’ perception about the offered value, the financial results and the used practices.

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Corresponding author
Moema Pereira Nunes can be contacted at: moemanunes@hotmail.com
Associate editor: Felipe Mendes Borini

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