Strategic Agility, Business Model Innovation, and Firm Performance: An Empirical Investigation

Despite the robust literature on the nature of business models and their implications for firm performance, research on the organizational antecedents of business model innovations (BMIs) is still evolving. In this paper, we empirically examine the extent to which firm-level strategic agility predicts the adoption of three (value creation, value capture, and value proposition) types of BMIs. Furthermore, we propose that the relationship between firm-level strategic agility and BMI adoption is contingent on the degree of environmental turbulence. Finally, we explore the mediating role that BMI plays in the relationship between firm-level strategic agility and firm performance. Our analysis of data from 432 German firms in the electronics industry indicates that strategic agility is positively related to BMI and that this relationship is indeed strengthened by the degree of environmental turbulence. Additionally, our findings show that, while value proposition and value creation BMIs have positive relationships with firm performance, value capture innovation is negatively related to firm performance; these findings are contrary to our prediction. Finally, the results of our mediation tests indicate that BMI serves as an important intermediary mechanism through which firms’ strategic agility contributes to superior firm performance.