Survival Through Digital Innovation: How Digitization Accelerates Business Model Evolution

In this article we integrate insights from the business model and digital artifacts literature to explore the role of digital innovation in business model evolution. Despite significant interest in how digital technologies facilitate the emergence of new ventures and new business models, limited research examines the interplay between digital innovations and the dynamic process of shaping and renewing business models, and the implications of digital innovations for the performance of entrepreneurial companies. A longitudinal case study of twelve Chinese Online Group Buying (OGB) companies shows compressed patterns of digital and nondigital innovations, where the scope, range, and incidence of innovation is intensive. Digital innovation involves continuous “morphing” that creates complex interdependencies between business design elements, which leads to long-term performance and survival.