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The Role of Business Model Innovation on the Disruptive Potential of PWLAN in the Western European Hotspot Markets
Abstract
In this chapter, the authors describe and analyze the impact of Wireless Local Area Network (WLAN) technologies on mobile data communications in the Western European hotspot markets. To do this, they use the disruptive innovation theory and the business model perspective as a basis. The main proposition to be analyzed is whether or not WLAN has developed disruptive potential for the incumbents in this market so far. The results imply that incumbents and new entrants have taken advantage of the opportunity provided by WLAN technologies and the public hotspot market in Western Europe. Although the market success of both types of players varies amongst the countries analyzed, in most Western European countries the incumbents dominate the public hotspot market. This result suggests a predominantly sustaining impact of public WLAN on the incumbents. However, the sustaining impact of public WLAN is weaker if alternative business models such as free or community network hotspots are taken into account. These findings support the view that incumbents frame new technological opportunities or threats in their established business model. In contrast, new entrants tend to use a more flexible approach and innovate the business model around the new technology as well. However, if the underlying technology lacks disruptiveness, the effect remains sustaining for the industry structure. After all, business model innovation is no panacea in disrupting the incumbents if the underlying technology lacks sufficient intrinsic disruptive potential and the established business model fits with the new technological opportunities or threats.
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