Business model innovation has received substantial attention by both practitioners and researchers during the last fifteen years. While many companies have good processes and a shared sense of how to innovate technology, they are less capable when it comes to how they should innovate business models. This lack of practical skills is mirrored by the shortage of scholarly understanding, in which business model innovation as a phenomenon is poorly explained in comparison to e.g. product or process innovations.

Although previous research has contributed greatly to the advancements of business model innovation, our conceptual understanding of business model innovation is still rather confused. Behind this study, lies two related assumptions; (i) not all business model innovations are the same, and, (ii) different types of business model innovation will challenge firms in different ways. To this background, the purpose of this study is to develop a framework that will allow for a conceptual differentiation between different types of business model innovation.

The paper draws on previous studies in the field of technology and innovation management and develops a framework – “The Business Model Innovation Map” – that distinguishes between different types of business model innovation according to their degree of novelty. The framework is illustrated by several real-life examples of business model innovation.

The paper adds to our understanding of innovation management as it allows for a better understanding of business model innovation as a distinct type of innovation. More specifically, it helps differentiating transformative business model innovations from mere incremental ones, and, as such, it presents a novel approach to categorize different types of business model innovation. The framework can serve as a basis for future in-depth empirical investigations of different types of business model innovation that can help firms to better understand how to manage such innovations. Copyright © 2015 by Halmstad University and Einsights Pte. Ltd.