Solving the Three ‘S’ Dilemma of Business Model Innovation

This study explores the role of Cross-Industry Innovation (CII) in addressing paradoxes and tensions emerging from new entrants’ Business Model Innovation (BMI) process within industries in their early lifecycle stages. This is particularly evident in the context of the energy transition, where intensifying competition and evolving market dynamics are compelling companies to innovate and adapt their business models (BMs). Through an in-depth case study of a new entrant in the energy sector, we explore how paradoxes arising from BMI are influenced by innovative strategies, such as CII, and boundary conditions, such as market dynamics. The findings of the study demonstrate that while CII serves as a mechanism for overcoming paradoxes in terms of speed – scale – scope, it concomitantly introduces additional complexities in BM management. Furthermore, the study offers practical recommendations for managers on identifying and navigating these tensions spurring from paradoxical conditions. By extending paradox theory, the study maps the related managerial tensions, explores their impact on BMI outcomes, and demonstrates how CII could facilitate the BMI process.