The Fit Between Value Proposition Innovation and Technological Innovation in the Digital Environment: Implications for the Performance of Startups

In recent years, an emerging stream of research suggests that firms should use technological innovation and business model innovation harmoniously to maximize firm performance. In order to enrich the scholarly conversation on the fit between technological innovation and business model innovation, dr...

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Bibliographic Details
Published in:IEEE transactions on engineering management 2021-06, Vol.68 (3), p.797-809
Main Authors: Guo, Hai, Yang, Jun, Han, Jiaping
Format: Article
Language:English
Subjects:
Adaptation models
Business
Business models
Computational modeling
Digital startups
Digital technology
dynamic capabilities
exploitative innovation
explorative innovation
Impact analysis
Innovations
Pain
Sensors
Startups
Technological change
Technological innovation
Trajectory
value proposition innovation
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Summary:In recent years, an emerging stream of research suggests that firms should use technological innovation and business model innovation harmoniously to maximize firm performance. In order to enrich the scholarly conversation on the fit between technological innovation and business model innovation, drawing insights from the dynamic capabilities perspective, this paper examines the fit between value proposition innovation and technological innovation (exploitative versus explorative) for the performance of startups in the digital environment. Based on on-site survey data of 285 digital startups in one of the world's largest digital economies, we find that explorative innovation strengthens the positive impact of value proposition innovation on the performance of startups, whereas exploitative innovation weakens this positive effect. Furthermore, these moderating effects are magnified in a highly uncertain demand environment. These findings inject fresh insights into existing scholarly conversation on the fit between technological innovation and business model innovation by offering a dynamic capabilities perspective and by extending it to an increasingly digital business environment.
ISSN:0018-9391
1558-0040
DOI:10.1109/TEM.2019.2918931