Business Model Adaptation and Technological Change: Incumbents’ Response to Digital Transformation

This study explores how incumbent business models adapt to technological discontinuities–impacting both core knowledge and complementary assets–necessitating innovative approaches to value creation while preserving the significance of pre-existing activities. To address this increasingly common but relatively overlooked phenomenon, we conducted a Qualitative Comparative Analysis on 24 Italian public museums that were granted strategic and financial autonomy, studying their adaptations to technological discontinuities from 2014 to 2022. Our contribution reveals four levels of adaptation, which include adoption along the existing value chain, local upstream integration, convergence, and exploiting connections. We found that the adaptation of the business model has an impact on value creation, but this impact is observed only in the presence of high and multiple types of complementarities between core knowledge and the new technology. One necessary, though not sufficient, condition for this impact is the level of vertical integration that museums had before the technological discontinuity. Theoretical and managerial implications of these findings for the innovation process and the business model are discussed.