Business Model Innovation – the Solution for EV Producers
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Business Model Innovation – the solution for EV producers A qualitative study on Business Model Innovation in the context of Electric Vehicles in the Nordics MASTER THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30 ECTS PROGRAMME OF STUDY: Strategic Entrepreneurship AUTHORS: Jakubas Buchtojarovas, Velislav Malchev JÖNKÖPING May, 2018 1 Master Thesis in Business Administration Title: Business Model Innovation – the solution for EV producers A qualitative study on Business Model Innovation in the context of Electric Vehicles in the Nordics Authors: Jakubas Buchtojarovas and Velislav Malchev Tutor: Naveed Akhter Date: 2018-05-21 Key terms: Business Model, Business Model Innovation, Electric Vehicles, Nordics, Electric Mobility, Case study Abstract Electric Vehicles are a growing trend globally and are currently disrupting the conventional automotive industry, therefore firms in the sector need new business models around their new value propositions. The concept of business model innovation presents an interesting point of view towards the challenges those firms face and provide possible solutions for them. Literature on this relatively new topic is scarce and needs more cumulative empirical research. We engage in a multiple-case study and explore how entrepreneurial and incumbent electric vehicle companies in the Nordics use BMI to overcome their biggest challenges and advance the development of the sector. With our findings, we provide an insight of some of the newest advancements in the EV technology, investigate what are the key antecedents, moderators and outcomes of the BMI process for the researched companies and build on the existing literature on the topic. Finally, practitioners can gain better understanding of the concepts of BM and BMI process and their importance for surviving in the dynamic electric vehicle market. I Acknowledgements This thesis would not have been possible without the valuable help, support and feedback from others. Accordingly, we would like to thank everyone who helped us while working on this Master thesis. First and foremost, we would like to thank our thesis supervisor – Naveed Akhter, who has provided us with many useful advices for our research, as well as thorough guidance and support throughout the whole course of this work. Also, we would like to thank our colleagues - Filip Projic and Paul Mansberger, that have provided us with beneficial feedback and suggestions of how to improve our thesis. We are grateful to the companies and the managers who we interviewed for expressing their interest and participating with us in this research, as it is in favor of building up the knowledge and awareness about electric vehicle industry, thus contributing to its growth. We would like to thank them for devoting their time and sharing their experience and knowledge with us. Finally, we appreciate the support from our family and friends throughout writing of this thesis. II Table of Contents ABSTRACT ................................................................................................................................................. I ACKNOWLEDGEMENTS ...................................................................................................................... II LIST OF FIGURES ................................................................................................................................... V LIST OF TABLES ..................................................................................................................................... V LIST OF ABBREVIATIONS ................................................................................................................... V 1. INTRODUCTION .................................................................................................................................. 1 2. PROBLEM .............................................................................................................................................. 4 2.1 RESEARCH QUESTION AND PURPOSE. .................................................................................................. 5 3. THEORETICAL BACKGROUND....................................................................................................... 6 3.1 BUSINESS MODEL (BM) ...................................................................................................................... 6 3.2 BUSINESS MODEL INNOVATION .......................................................................................................... 8 3.2.1 BMI as a process ......................................................................................................................... 9 3.2.2 Effects from BMI ...................................................................................................................... 10 3.2.3 BMI as an outcome ................................................................................................................... 10 3.3 BMI FOR EV INDUSTRY .................................................................................................................... 11 3.3.1 Challenges and Barriers for the Electric Vehicle Industry ........................................................ 12 3.3.2 Opportunities for Electric Vehicle Industry .............................................................................. 14 3.3.3 Difference in BMI between incumbents and entrepreneurial firms .......................................... 15 3.4 BMI IN NORDIC EV INDUSTRY ......................................................................................................... 16 3.5 SUGGESTIONS FOR RESEARCH APPROACH OF BMI ........................................................................... 17 4. RESEARCH METHODS ..................................................................................................................... 18 4.1 RESEARCH PHILOSOPHY ................................................................................................................... 18 4.2 RESEARCH APPROACH ...................................................................................................................... 18 4.3 RESEARCH STRATEGY....................................................................................................................... 19 4.3.1 Review of the Literature ............................................................................................................ 19 4.3.2 Research design ......................................................................................................................... 19 4.4 CASE SELECTION ............................................................................................................................... 20 4.5 DATA COLLECTION ........................................................................................................................... 21 4.6 DATA ANALYSIS ............................................................................................................................... 22 4.7 CREDIBILITY AND TRUSTWORTHINESS ............................................................................................. 23 5. EMPIRICAL FINDINGS ..................................................................................................................... 26 5.1 PAXSTER AS ..................................................................................................................................... 26 5.2 VIRTA ................................................................................................................................................ 29 5.3 UNITI ................................................................................................................................................. 33 5.4 SCANIA .............................................................................................................................................. 36 5.5 BUDDY ELECTRIC ............................................................................................................................. 39 5.6 CLEAN MOTION ................................................................................................................................ 43 6. ANALYSIS ............................................................................................................................................ 46 III 6.1 ANTECEDENTS OF THE BMI PROCESS ............................................................................................... 47 6.1.1 Innovation Approach ................................................................................................................. 49 6.1.2 BMI for Industry challenges...................................................................................................... 50 6.2 DIMENSIONS OF BMI ........................................................................................................................ 51 6.3 INTERNAL AND EXTERNAL FACTORS AFFECTING THE BMI .............................................................. 53 6.3.1 Internal factors........................................................................................................................... 53 6.3.2 External factors ......................................................................................................................... 54 6.4 OUTCOMES FROM BMI ..................................................................................................................... 58 6.5 SUMMARY OF ANALYSIS ..................................................................................................................