Simulation of business model innovation based on business model rigidity: Comparison between traditional and internet firms

Under the background of "Internet Plus" booming, traditional and internet firms are both faced with growing urgency of business model innovation. But at the same time, the innovation process often manifests a kind of rigidity which preserves the stability of existing structure. In this paper, the simulation models of business model innovation for traditional and internet firms are established and compared through experiments based on business model rigidity. Under the impacts of environment, cognition and resources, the evolutionary trends of traditional and internet firms' business model rigidities are different, which have a systemic impact on business model innovation. The results show that traditional and internet firms are external labels, thus there is no gene obstacle for business model innovation, which provides general implications: traditional firms need to clearly understand the dynamics of market boundaries and optimize the structure of organizational slack to manage business model rigidity; internet firms need to "slow down" when necessary in order to avoid the strengthening of business model rigidity due to unnecessary consumption of unabsorbed slack. © 2018, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.