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Temporary business model
innovation –­SMEs’ innovation
response to the Covid-­19 crisis
Thomas Clauss1,2,* , Matthias Breier3,
Sascha Kraus4 , Susanne Durst5 and Raj V. Mahto6
1
Department of Management and Entrepreneurship, Witten/Herdecke University, Alfred-­Herrhausen-­Str.
50, Witten, 58455, Germany.
2
Department of Technology and Innovation, University of Southern Denmark, Odense, Denmark.
Thomas.clauss@uni-wh.de
3
Lappeenranta University of Technology, Lappeenranta, 53850, Finland
4
Faculty of Economics & Management, Free University of Bozen-­Bolzano, Bolzano, 39100, Italy
5
Department of Business Administration, Tallinn University of Technology, Tallinn, 12616, Estonia
6
Anderson School of Management, The University of New Mexico, Albuquerque, New Mexico 87131,
USA

The Covid-­19 crisis has hit SMEs particularly hard. Numerous business models (BM) have
been limited or rendered downright impossible due to decreased social contact. SMEs can
respond to this exogenous crisis via temporary business model innovation (BMI). This
empirical study investigates these temporary BMs using a multiple case study approach
based on five SMEs in Austria, Germany, and Liechtenstein who within a short period of
time applied their core competencies and networks to integrate new BMs, which were in
some cases very different from existing ones. These had a positive effect on strategic flexibil-
ity, and if desired can also be incorporated into the firm long-­term. The paper contributes
to SME crisis management during the Covid-­19 pandemic by pointing out and developing
a successful management mechanism that allows to survive a crisis or even improve during
this time. Moreover, we contribute to BMI literature by explaining temporary BMI as a new
form of BMI. It also makes clear to managers that temporary BMs add value to firms and
create new revenue streams.

1. Introduction comparison to previous crises, the Covid-­19 pan-

demic has caused a simultaneous demand and sup-

T he Covid-­19 pandemic has disrupted social life

and economic activity across the globe (Clark
et al., 2020). The economic impact has been unprece-
ply shock (del Rio-­Chanona et al., 2020). For many
firms, lockdowns and strict regulations have chal-
lenged existing business models (BMs) (Ritter and
dented, with most countries experiencing large-­scale Pedersen, 2020; Breier et al., 2021), while some
job losses and economic contraction (e.g., in Q1 of firms have not been able to pursue their established
2020, China’s GDP shrunk by 6.8%, while the euro business operations at all. This situation has called
area saw GDP drop by 3.8% [Chen et al., 2020]). In for a drastic, rapid crisis management response.

294 © 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd.
This is an open access article under the terms of the Creat​ive Commo​ns Attri​bution License, which permits use,
distribution and reproduction in any medium, provided the original work is properly cited.
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Temporary business model innovation

Small and medium-­ sized firms (SMEs) are temporary BMI in response to Covid-­19 and what
particularly vulnerable to crises (Shepherd, 2003; effects this has. This question aims to achieve a
Kraus et al., 2013). Resource scarcity and lack of deeper understanding of SMEs’ crisis management
preparedness have restricted their strategic choices mechanisms.
in managing the Covid-­19 crisis (Eggers, 2020). By analyzing the case data of five firms who had
SMEs are usually not diversified, but instead a temporary BMI early in the Covid-­19 crisis, we
rely on only one specific BM (Pal et al., 2012). make two important contributions to the literature.
Furthermore, banks associate SMEs with higher First, we add to the SME crisis management litera-
risks, thus limiting their options for debt financing ture (e.g., Eggers, 2020) and the growing stream of
during crises (Piette and Zachary, 2015). On the studies proposing innovation and temporary BMI as
other hand, SMEs are flexible, entrepreneurial, and potential strategies to cope with the Covid-­19 cri-
embedded in communities, and have been shown to sis (Chesbrough, 2020; Kraus et al., 2020a; Wenzel
possess unique capabilities to mount an effective et al., 2020). Especially, SMEs due to their liabilities
response to a crisis and ultimately emerge stron- (Eggers, 2020) have to engage in innovative strate-
ger (Ter Wengel and Rodriguez, 2006; Dahles and gies to survive in the long run. Second, we contribute
Susilowati, 2015). Crisis management studies have to the literature on BMI by showing that temporary
primarily explored which characteristics and strat- BMI which relies on existing core competencies and
egies have helped SMEs survive (Eggers, 2020). is positioned in nascent industries (Zook and Allen,
Factors such as young firm age (Simón-­ Moya 2003) is a viable way to change an organization as
et al., 2016), management expertise (Giannacourou a response to changing external conditions. In con-
et al., 2015), and market orientation (Petzold et al., trast to existing research (e.g., Clauss et al., 2021),
2019) have been shown to be positively related to we demonstrate that BMI as a response to chang-
SMEs’ crisis performance. Studies have also con- ing external circumstances must not necessarily be
cluded that SMEs’ innovative stances and entrepre- radical and irreversible but can be a more tactical
neurial orientation are helpful for surviving a crisis approach to temporary adapting the organization
(e.g., Eggers and Kraus, 2011; Vargo and Seville, e.g., if a crisis is to be faced.
2011). Beliaeva et al. (2020) relate this effect to
their ability to identify opportunities during crises.
But despite these initial findings, surprisingly lit- 2. Theoretical foundation
tle is known about how SMEs can best cope with
severe crises. 2.1. Firms’ response to a crisis
We add to this research discourse by analyzing
the reactions of SMEs to the Covid-­19 crisis. This According to Pearson and Clair (1998), an organi-
pandemic provides a unique context for studying zational crisis is defined as ‘…a low probability,
how firms can cope with a crisis if their existing high-­impact event that threatens the viability of
BM suddenly becomes infeasible. Wenzel et al. the organization’ (p. 60). The Institute for Crisis
(2020) proposed four different strategies for firms Management (ICM) (2004) divides crises into two
to respond to a crisis: retrenchment, persevering, primary types: sudden and smoldering. Sudden
innovating, and exit. In line with the arguments crises are the unexpected external events in which
above, we focus our study on the opportunity for the organization has virtually no control and lim-
SMEs to overcome a crisis through innovation ited fault or responsibility. The Covid-­ 19 pan-
and temporary business model innovation (BMI). demic can be viewed as an example of this type
We argue that as the unique characteristics of this of crisis. Smoldering crises are those events that
crisis have seriously affected the BMs of many start out as small, internal problems within a firm,
SMEs, these firms have had to come up with new become public at some point, and over time esca-
BMs at least for the duration of the crisis. In con- late as a result of inattention and/or poor decisions
trast to previous research that suggests that dual or by management.
multiple BMs can help firm diversification (e.g., Although no two crises are alike, research sug-
Markides and Charitou, 2004; Aversa et al., 2017; gests that they all have three common elements:
Winterhalter et al., 2016), this context has cre- surprise, threat, and short response time (Williams
ated a situation in which a new BM is temporarily et al., 2017). Scholars argue (e.g., Smith and
required to survive the crisis while the established Riley, 2012) that regardless of the type of crisis,
BM is significantly reduced or even placed on it requires immediate and decisive action by an
hold. Against this background, the research objec- organization. Hence, crisis management has been
tive of this study is to explore how SMEs pursue defined as ‘the systematic way in which members

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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

of an organization, in conjunction with exter- three interrelated key elements of value proposition,
nal stakeholders, work to avoid potential crises value creation, and value capture (Clauss, 2017; Foss
and to minimize and resolve those that do occur’ and Saebi, 2017). These elements are configured
(Brumfield, 2012, p. 45). The available normative as mutually enforcing systems that together define
guidance on managing a crisis suggests that man- the gestalt of the organization (Martins et al., 2015;
agers should be prepared to make available more Kulins et al., 2016). BMI is then defined as ‘designed,
time and resources to expand the required operat- nontrivial changes to the key elements of a firm’s BM
ing space (Bowers et al., 2017). The need for con- and/or the architecture linking these elements’ (Foss
tinued internal and external communication has and Saebi, 2017, p. 207). BMI extends the scope of
been frequently highlighted here as well (Gilstrap product and process innovation as key elements of
et al., 2016; Bowers et al., 2017). firms’ organization, along with when their configu-
Wenzel et al. (2020) proposed four strategic rations are changed (Foss and Saebi, 2017; Clauss
responses to a crisis: retrenchment, persevering, et al., 2020). As a result, it provides firms with the
innovating, and exit. These strategies were shown as opportunity to create novel activities that go beyond
effectively capturing the early responses of family product and process innovation (Osiyevskyy and
firms to the Covid-­19 pandemic (Kraus et al., 2020a). Dewald, 2015). Studies show that competitive advan-
Retrenchment involves cost-­ cutting measures that tages can be achieved either by innovating compo-
may reduce the scope of a firms’ business activities. nents of the BM or the entire BM (Berends et al.,
This strategy appears to support firms in surviving a 2016; Clauss et al., 2020). BMI therefore not only
crisis in the short run. Persevering is about preserv- exists if radical changes are implemented, but can
ing the status quo of a firms’ business activities. This also be the result of their more incremental recon-
may be achieved through debt financing, and seems figurations (Velu and Jacob, 2016; Foss and Saebi,
suitable in response to a crisis in the medium run, 2017; Kraus et al., 2020b). Foss and Saebi (2017) dif-
even though it may threaten the long-­term survival of ferentiate BMI in terms of their newness and scope.1
the firm. Exit means the discontinuation of a firm’s The first dimension captures the ‘degree of novelty
business activities; it is a strategy which is not limited of the BMI.’ It differentiates whether a BMI is only
to a crisis, and can be selected at any time. Finally, new for the firm (Johnson et al., 2008; Bock et al.,
innovating means that the firm engages in strategic 2012), or if it is completely new to the whole industry
renewal in response to a crisis. (Santos et al., 2009). The second dimension captures
In contrast to the other mechanisms, an innova- the BMI’s scope, defining how much of the existing
tion strategy to crisis management is the most future-­ BM is affected by the innovation. In line with the
oriented because it may provide solutions on how to above-­mentioned ideas, the scope is the number of
use opportunities that emerge from a crisis. It has been BM elements (i.e., value creation, value proposition,
shown that firms pursuing more explorative strate- and value capture) that are changed by the BMI. If
gies toward new product and market developments only one or a few elements of the BM are changed,
are those that cope better with crises (Archibugi the scope of the BMI would be modular, whereas the
et al., 2013). In line with this, studies have shown orchestrated reconfiguration of all elements of the
that SMEs’ innovative stances and entrepreneurial BM would be termed architectural BMI (Foss and
orientations are helpful for surviving a crisis (e.g., Saebi, 2017). The more components that are changed
Eggers and Kraus, 2011; Vargo and Seville, 2011). and the greater the novelty of the changes outside of
Considering how the Covid-­19 crisis created a situ- the firm, the more radical the BMI is. On the other
ation in which the existing BMs of many firms were hand, incremental BMIs are based on only modular
suddenly placed on hold, managers should assess the improvements of a firm’s existing BM.
impact of the crisis on their firms’ BM (Ritter and Because complex BMIs require fundamen-
Pedersen, 2020) and may potentially seek out BMI as tal changes in the organizational system (Berends
an effective opportunity (Kraus et al., 2020a). et al., 2016), involve substantial redeployment of
resources (Doz and Kosonen, 2010), and are usu-
ally the consequence of a long-­term strategy defined
2.2. Temporary BMI by the firm (Casadesus-­Masanell and Ricart, 2010),
The BM concept has received considerable theoret- previous literature predominantly considered BMI
ical (Massa et al., 2017) and practical (Pohle and as a firm’s enduring reconfiguration. Paradoxically,
Chapman, 2006) interest because it provides a use- another stream of literature suggests that BMI may
ful perspective for understanding a firm’s business be achieved by temporarily experimenting with new
and competitive logic. Scholars recently agreed that BMs (Sosna et al., 2010; Andries et al., 2013) or by
BMs are conceptualized as configurations of the creating temporary spin-­off BMs (Chesbrough and

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Temporary business model innovation

Rosenbloom, 2002; Clausen and Rasmussen, 2013; value chain linkages and technologies (Aversa et al.,
Markides, 2013) that may be reintegrated into the 2017).
parent firm at a later date. Furthermore, it has often We propose that temporary BMI are a poten-
been proposed in start-­ups that new BMs may require tial mechanism for firms in responding to dramatic
regular pivots in which their elements are adjusted changes (i.e., demand and supply shocks). If they are
based on market feedback (Felin et al., 2019). With the result of the Covid-­19 pandemic, they are a kind
these studies in mind, we propose that BMI does not of ‘extended environment.’ Initial evidence by Kraus
inevitably lead to an enduring reconfiguration of the et al. (2020a) indicate that European family firms
organization, but that temporary BMIs are often pos- utilized temporary changes in their BM as a direct
sible or necessary for a period of time. We regard a response to the Covid-­19 crisis. Furthermore, Ritter
temporary business model innovation as one which and Pedersen (2020) have recommended that in
is, at least at the time of its origination, not intended response to the crisis, firms should consider changes
as permanent. These temporary BMIs are assumed to in a few core dimensions of the BMs. Gutierrez-­
be particularly appropriate if firms’ operating con- Gutierrez et al. (2020) called for rapid responsible
ditions significantly change, and more modular and innovation as a sustainable response strategy to the
less novel changes in the elements of the BM can Covid-­19 pandemic. Following these initial ideas,
recreate or improve the competitive position. together with the theoretical background of tempo-
In contrast to more radical BMI, temporary BMI rary BMI, we examined five firms that engaged in
should be closely related to the strategy and core temporary BMI as a direct response to the Covid-­19
competencies (Prahalad and Hamel, 1990) of the crisis.
firm. In line with Zook and Allen (2003), BMIs take
place in adjacent spaces where firms can reuse exist-
ing capabilities. Casadesus-­Masanell (2010) shows 3. Methodology
how BMs form as a consequence of strategic deci-
sions, and as rather rigid configurations of the orga- This study explores temporary BMIs in SMEs during
nizational activity system. These structures however crises. Kraus et al. (2020a) researched how firms
leave some residual freedom for changes as a direct adapt their BMs as a short-­term response to cope
response to changing external conditions, and as long with crises. Although they reflected their findings
as these changes are in line with the core competen- into extant literature, that of Casadeus and Ricart
cies and strategic orientation of the firm. Zott and (2010), the understanding of temporary BMIs in
Amit (2008) in a similar vein show that the alignment SMEs is underdeveloped. This argued in favor of
of the BM and the established product-­market strat- an exploratory multiple case study approach. A case
egy is important for sustained competitive perfor- study ‘attempts to examine: (a) a contemporary phe-
mance. In turn, if BMIs are consistent with the firm’s nomenon in its real-­life context, especially when (b)
core competencies, their limited strategic complexity the boundaries between phenomenon and context are
may make these more reversible, and they may be not clearly evident’ (Yin, 1981, p. 59). This approach
partially or fully undone if the external conditions can be used to find answers to ‘how’ or ‘why’ ques-
return to the previous state. Whatever the case, tem- tions and addresses real-­life problems (Yin, 2009).
porary BMIs can still represent an optimal-­use case Furthermore, a case study design enables the investi-
or prototype for long-­term BM changes. gation of complex relationships and provides a basis
Temporary BMI may not necessarily substitute for for the development of theories (Flyvbjerg, 2006).
the existing BM. In situations where the established The use of multiple cases was considered effective
BM cannot be pursued due to external conditions for theory development, and the underlying replica-
(e.g., regulations), new BMs will exist in parallel with tion logic increases the likelihood of producing more
the established BM. Previous research has empha- robust and generalizable theory (Eisenhardt and
sized that tensions between two parallel BMs may Graebner, 2007).
arise when they follow competing institutional log-
ics (e.g., low cost vs premium) (Winterhalter et al.,
3.1. Selection of cases
2016) or if they are competing for limited resources
(Markides and Charitou, 2004). Studies have shown The sample in this study included SMEs from
that to overcome these potential issues, new (tempo- Austria, Germany, and Liechtenstein. The search for
rary) parallel BMs should be able to share resources and selection of suitable SMEs was based on theoret-
and activities (Snihur and Tarzijan, 2018), and should ical sampling (Eisenhardt and Graebner, 2007). We
furthermore be compatible and synergistic regarding identified companies that were negatively affected

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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

by the crisis and were thus in a need to strategically slowly reopen following their Covid-­19 lockdowns.
deal with the situation. Therefore, all our cases come Due to the still-­active social distancing measures and
from low-­tech industries which were more severely restricted border access, the interviews were con-
affected by the crisis. Here we identified SMEs that ducted via the digital tool LoopUp, recorded with
responded to the crisis via an innovation strategy the consent of the participants, and later transcribed.
(Wenzel et al., 2020) and operated with a tempo- The interviewees also enabled access to further mate-
rary BMI (Kraus et al., 2020a). With help from the rial including firm reports, sales lists, and marketing
local Chambers of Commerce, we identified firms material. The interviewees furthermore agreed to be
who at the time of the study were already known to contacted at a later date for any follow-­up questions.
have innovated their existing BMs as a response to The data analysis primarily followed inductive rea-
Covid-­19. A total of twelve possible firms were iden- soning (Creswell and Poth, 2016). It also took advan-
tified based on this. After double-­checking whether tage of the underlying ideas of thematic analysis.
these firms were really engaged in temporary BMIs, This approach to data analysis searches for topics that
all of them were approached and asked whether they appear important for the understanding of the phenom-
would participate in our study, with five of them enon in focus (Fereday and Muir-­Cochrane, 2006).
agreeing to do so. Data reduction is here supported through segment-
ing, categorizing, and summarizing relevant concepts
within the data set being examined (Ayres, 2008).
3.2. Data collection and analysis The data analysis began by a research team
The data for the present study were collected from member transcribing the recorded interviews. This
various sources, i.e., through semi-­structured inter- researcher took notes during this process, which
views; follow up calls; archive data such as e-mails, supported not only the recording of why certain
internal reports, and presentations; and the firms’ data chunks were assigned to particular topics, but
websites and social media activity on Instagram and the initial data interpretation as well. Once all tran-
Facebook as well as on-­sight visits and observation scripts were generated, the first step was to identify
of the new BMs. In doing this, we used multiple all data related to a list of predetermined topics cov-
sources of evidence as recommended by Yin (2009) ering three areas: (1) variance between the existing
to increase the overall quality of the case study and and the temporary BM, (2) changes in BM elements,
triangulated the results of the interviews wherever and (3) time perspective of the BM. Additional codes
possible. were assigned to the portions of data that represented
An interview guide was created for the semi-­ new topics (Saunders, 2012), further underlining the
structured interviews. Accordingly, a number of focal selected inductive approach. This was done for each
topics were specified at the outset of the interviews. case. New topics emerged as a result: branding and
Very specific questions had to be asked to develop reputation issues, use of core competencies, effects
the necessary in-­depth information about the new on the existing BMs, and effects on the strategic flex-
BMs, their basis and initial effects, and to explore ibility of a firm. To reduce the danger of misinterpre-
the underdeveloped BMI phenomenon (Guest et al., tation, all of the authors read through the transcripts
2006). More precisely, the content of the interview and discussed the findings. Even though data from
guide focused on how the participating SMEs had other sources was gathered and additionally included
dealt with the crisis to date; which measures were in the above-­mentioned process, priority was given
chosen and why; what the temporary BM looked to the semi-­ structured interviews. Once this pro-
like; how the process of implementation worked; cess was completed, individual case reports were
and whether the firms had already been exposed to prepared for each firm involved, which also formed
significant consequences and changes resulting from the basis for a within-­case analysis to be followed
their temporary BMI. Given the exploratory charac- (Eisenhardt, 1989). The cross-­case analysis aimed at
ter of the present study, it was not possible to rely on highlighting the differences and similarities between
existing questionnaires, requiring new questions to the cases involved (Eisenhardt and Graebner, 2007),
be formulated. The use of semi-­structured interviews which was supported by the topics identified in the
allowed the analysis of a complex situation and the previous step. Moreover, comparison tables were
inclusion of the experiences and views of the partic- produced to enable the cross-­case analysis. This also
ipants involved in it (Graebner et al., 2012). A total helped the researchers discuss the findings and agree
of eight interviews were conducted between April on the relevant topics needed to address the research
30th and May 6th of 2020. This was during a time aim. The detailed case descriptions can be found in
when the countries in the study had just started to the Supplementary Information.

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Temporary business model innovation

4. Findings and is prepared for the future. Furthermore, it opened

up new contacts and a new target group for the firm,
4.1. Within-­case analysis which in the future will be reached via the current
BM. So the experiences and new contacts obtained
In the following section we are providing an over-
shortly after the introduction of the temporary BM
view of the main BM changes that were conducted
led to positive effects on the core activities. Although
by each of our case companies. Table 1 provides a
the BM is currently generating good sales, there are
comprehensive overview on the changes in value
no plans to pursue it long-­term.
proposition, value creation and value capture of the
old and the new BM. Each case description high- 4.1.2. Case B –­creating digital value for
lights the new BM, the evaluation of the BMI based conference sponsors
on Foss and Saebi (2017), and some general data This firm developed a specific online event as a
about the case. response to the Covid-­19 crisis, addressing the needs
of its customers and sponsors. This BMI can be
4.1.1. Case A –­distillery and beverage producer
described as evolutionary (modular and new to the
turns to disinfectants
firm), as no architectural changes were necessary
Case A started to produce, bottle, and sell disinfec-
tants as a business response to Covid-­19. This BM, and the BM of online events is used by others in
although new to the industry (production of disin- the industry too. The variance to the existing BM is
fectants is a state regulated BM in Austria and only small, as most of the processes are still the same with
specialized companies were allowed to produce them the exception of room booking and catering. Within
until the crisis started, which opened this BM to the the scope of this temporary innovation, value creation
industry), was not structural, and therefore can be has not changed, as it continues to focus on the net-
seen as a focused BMI (modular and new industry). working of market participants. There were however
The variation to the existing BM is vast, requiring changes in the value proposition. An event with per-
several processes to be altered to be able to imple- sonal character was brought into the digital space. The
ment the new BM. However, the core competen- element of value capture has also changed: Through
cies in production and filling remained unchanged. exclusive access to customers, sponsors are willing
With its value creation, the firm has changed from to pay more money per person reached. This firm
the production of alcoholic drinks to a disinfectant. approached a consulting firm with the concern that it
The value proposition has also changed, as new cus- would not be able to carry out their planned events.
tomers are targeted with a different product; only the ‘We listened to the firm’s concerns that it would have
value capture element remained unchanged. to repay the money it had already received from the
Although one of the firm’s employees developed sponsors and developed a new concept based on the
the idea for the firm, it was decided not to make any client’s skills and the characteristics of the event.’
changes when this person informed management. The sponsoring contracts for the events had in most
But management changed their mind a few days later, cases already been signed. During the crisis, it was
followed by the firm switching over to the produc- noticed by all sides that affinity toward digital com-
tion of disinfectant. The common goal made clear to munication tools had increased significantly, which
everyone what they had to work on/change and how is why the firm decided to reproduce the conference
to implement the new BM. The firm’s flat hierarchy within the framework of a digital meeting. A small
supported this process. As one of the employees group of the conference participants had up to this
responsible for the process said, ‘We all knew what point been meeting on a regular basis for some time
we had to work on to get the product on the market. to exchange ideas over dinner. Over the course of the
All departments were involved and you could see new BM, a handwritten invitation was sent out to par-
how motivated the employees were to implement this ticipants who were to be networked together to cre-
as quickly as possible.’ The implementation was sup- ate a similar personal environment over a drink. The
ported through public authorities and partners who participants are invited to digital conference rooms
contributed their expertize to the processes. During where the sponsors briefly present themselves. An
the process, the firm was concerned that the existing opportunity that arose through the crisis was identi-
brand and its high-­quality beverages would suffer fied here, with extensive time invested to be able to
from a negative image as a result of the change. But hold the first run of the new event as quickly as pos-
contrary to expectations, the interviewees noted that sible. In the context of the crisis, innovation was of
the firm’s rapid action has significantly increased great importance, most notably in how it helped the
awareness of its own strategic flexibility. It projected firm avoid repayment to the sponsors. The interview
the notion that it can handle complex situations well, partners pointed out that they can act more flexibly

© 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd. R&D Management 52, 2, 2022 299
 300
Table 1. Description of old and new BM based on the three BMI dimensions

R&D Management 52, 2, 2022

Case Value proposition Value creation Value capture
Case A Old Production of a consumer good Production of alcoholic beverages from basic Sell the produced spirits primarily to businesses
ingredients including bottling for customers and partly to retail customers via an online
shop
New Produce disinfectant Production of disinfectant to tackle health crisis Sell the disinfectant to businesses
and fill the increased demand during the crisis
Case B Old Network people in a specialized business Host local events and network the sponsors with Sponsors pay to be invited to the dinners that
environment. the people they want to meet take place around the event
New Network people in a specialized business Host online events with limited space for spon- Sponsors pay to be allowed in the online meet-
environment. sors to charge higher prices while networking ing and further to get a slot to present their
the two core groups products
Case C Old Provide place, food and service for a good time. Create, cook and serve meals for customers in Get paid for every meal served
the restaurant
New Provide meals to eat at home. Cook and deliver meals. Get paid for every meal served
Case D Old Consult SMEs in strategic issues Meetings, workshops and strategic development Charge for time used to consult the customer
with customers
New Sell hygiene products to business customers Sell disinfectant to other businesses Earn commission for every successful sale
Case E Old Produce and sell meat Sell meat to restaurants only Direct sales to business partners
Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

New Produce and sell meat Sell meat to customers and further retail organic Sales to customers through webpage, WhatsApp
products and on the farm

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Temporary business model innovation

now, and see different new possibilities for creating changes in their systems and approaches were neces-
revenue based on the new BM. A long-­term imple- sary. Although the entry into trade is atypical for clas-
mentation is not planned at the moment, but was in sical consulting firms, this firm has a long history in
fact discussed in light of the positive participant feed- trade and numerous contacts. The owner stated how
back received from the events. the decision was obvious for him, and the new BM is
in line with his firm’s existing competencies and per-
4.1.3. Case C –­from pure cooking to selling toilet
sonal network. The new BM resulted in changes to
paper, masks, and delivery service
all three elements, with the firm expanding value cre-
This firm responded to the crisis by starting a new
delivery service, transforming into a retail store for ation from advising customers to providing disinfec-
consumer goods selling toilet paper and masks. The tants. The sale of disinfectants represented a change
BMI can be described as adaptive (new to the firm in the value proposition. The firm creates revenue as
and architectural) as it is new to the firm to sell goods, a retailer now, and no longer just with consulting,
while others in the industry already established this changing the element of value capture as well. The
before. Moreover, large structural changes were nec- idea emerged from the firm’s owner and through the
essary which resulted in architectural changes. The closer network, with its joint cooperation starting
introduction of a delivery service was well-­known shortly after the idea was born. The new BM could be
in the industry, but required new processes and staff implemented at this speed mainly due to a flat hier-
work profiles. The additional sale of consumer goods archy and with the help of virtual organization with
varies widely from the existing BM, creating further network partners who joined their core competen-
overall changes in the firm. And although the delivery cies, with the case firm taking over the distribution
service represented an extension of the firm’s value of the product. Creating sales strategies was a core
creation, the inclusion of consumer goods into the competence that was already in place. After sales in
restaurant’s product portfolio was less common and Austria turned out to be profitable, the firm became a
altered its value creation. This additionally changed dealer to other countries as well, and the BM started
the value proposition from the processing of food to to be perceived as a long-­term opportunity. Margins
the sale of everyday consumer goods. By contrast, are currently low, with attempts being made to force
the value capture element hardly changed. other participants out of the market in the near future.
The idea for this came primarily from the owner, 4.1.5. Case E –­an organic farmer sets out on new
with the delivery service quickly implemented. This paths
required internal processes to be changed, and the This firm produces and sells meat to private clients
service staff trained accordingly (bring the food to from its farm, and operates a digital organic farm
the customers at their homes, not to a table in the shop. Its BMI can be described as evolutionary (mod-
restaurant). The BM for selling toilet paper was also ular and new to the firm), as other farms follow the
implemented very quickly, as the firm was able to same system of a farm shop and only minor changes
purchase it through existing supplier relationships were necessary to change to the new customer seg-
within their network. Masks were designed and man- ment. It is mainly based on the same core competen-
ufactured by a local tailor. In general, the financial cies. Only some infrastructure had to be adapted to
impact of the new BM was minimal compared to the sell the meat directly on the farm. This firm changed
losses from the Covid-­19 lockdown. The delivery its value creation from a pure on-­site food seller to a
service only added minimal value, and has already digital shop. Furthermore, the live experience for the
been partly reduced. Although the sale of masks and customers on the farm is an important factor for the
toilet paper was profitable for the firm, there were firm; buying directly on the farm was still possible
reasonable concerns about the impact on the firm’s during the lockdown. While the value proposition is
brand and reputation in the region. As a result, the still the same (selling meat), the value capture of the
margins on the products sold were low. The firm does firm has changed. Prior to the crisis, the farm was a
not plan to continue this BM beyond the Covid-­19
B2B vendor and sold to restaurants only. However,
crisis.
this income stream vanished during the crisis, forc-
4.1.4. Case D –­a classic consulting firm gets into ing the farm to come up with new ideas; its new BM
retail was integrated quickly. In the near future, this firm
This firm started distributing disinfectants via a plans to expand its digital shop with other organic
European distribution network in response to the cri- regional products. As this firm has enjoyed a very
sis. The BMI can be described as adaptive (architec- strong brand image as an organic farm, there is a fear
tural and new to the firm) as other consulting firms of damaging this image with the wrong products in
also work as sales companies, but for this firm major the online shop. Furthermore, it hopes to not alter the

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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

existing relationship with business customers with of the pandemic, our main source of sales collapsed.
the new BM. In general, with the BMI, the new sales Restaurants had to close. We therefore had to work
pillar provides greater strategic flexibility to react even faster. That was incredibly important because
to situations, and has also enabled new contacts. In we couldn’t sell anymore. But that is also how it will
the long run they aim to continue with the new BM, be in the future, that we will sell directly to private
even though they expect that the original BM will be individuals.’ Moreover, the companies that inte-
similarly important following the lockdown and the grated temporary BMI with the intention to sustain it
reopening of restaurants. over the long run mentioned that they also invested a
significant amount of resources. An important basis
for the introduction of a temporary BM is the initial
4.2. Cross-­case analysis idea and observed opportunity. This may come from
The following section concentrates on the cross-­case very different sources. In case A, an employee had
findings. We analyzed firms from different sectors the idea, in case B an external management consul-
and situations, with overall propositions for further tant, and in cases C, D and E the owner. The CEO in
research emerging upon closer inspection. Table 2 case A stated: ‘Our employee realized that the com-
provides an overview of the case results. Our results petitors in more seriously affected regions already
indicate three important steps of a temporary BMI. started to work on this opportunity. He convinced us
These steps are the trigger and reason for a tempo- to also do this.’ The statement shows the flat hierar-
rary BMI, insights into the integration of a TBMI chies and short command lines in SMEs and is an
and an outlook on the potential effects. Based on the indication that in SMEs innovation can also be ini-
detailed analysis of the cases we could develop a table tiated quickly by employees and external parties in
that highlights similarities and differences among the order to master a crisis.
cases and allows the identification of some patterns
4.2.2. Finding 2 –­integration process, branding
for temporary BMI. In particular our results of the
and business model elements
cross-­case analysis focus on the three areas along the
Most of the temporary BMs observed emerged from
process of temporary BMI: (1) The trigger and reason
the crisis (Cases A, B, C, and D). For these firms, the
for a temporary BMI. (2) The integration process and
rapid exploitation of their respective opportunity was
important issues. (3) The effects of temporary BMI.
of great importance. As a result of the crisis, capac-
A fourth section deals with patterns we identified in
ities were freed up in the firms to take advantage of
our data that provide more details on temporary BMI.
these opportunities. The CEO of case D explained:
4.2.1. Finding 1 –­trigger and reasons for ‘In the course of the crisis, some major projects were
temporary business models cancelled or postponed. This gave them enough time
The Covid-­19 crisis was the trigger for all of the to implement this business model quickly’ (Case D).
firms to temporarily adjust their BMs, with all of Rapid implementation was achieved with the help of
them at least partially affected by the crisis, and free capacities2 (Cases A and C), by external con-
Cases C and D highly affected. Only one case firm sultants (Case B), and by using the existing network
has already worked on its new BM prior to Covid-­19 (Cases C and D). Case E is the only one that car-
(Case E). For the rest of the firms the change was ried out the implementation itself. One reason for the
based on newly emerging opportunities (Cases A, rapid implementation of the temporary BMs was that
B, C, and D). ‘Everyone started using online tools they were based on existing core competencies at
[for meetings and communication]. It was just more all of the firms. The case firms created BMs around
familiar to our target group and I decided this is an new opportunities but in line with their established
opportunity to do our networking activities online’, competence base. The companies also described
so the consultant of case B. There are significant how they used their core competencies: Case A who
differences in the time perspective of the new BMs. primarily produces spirits could not sell the same
While two firms (Cases A and C) only wanted to amount as restaurants were closed. They explained
implement their new BM during the lockdown, there that they could build on their existing processes and
are two firms for whom the potential long-­ term competences of following a receipt and producing
development was a decisive reason to adapt (Cases D and mixing different ingredients, when they started
and E). For firms seeking long-­term integration, the to produce disinfectant rather than spirits. Also in
relevance of the new BM is high, while for others it is packaging and distribution they could build on exist-
only average or low. The owner of case E explained ing capabilities. The CEO mentioned: ‘We don’t do
this relevance to us: ‘We have already started to anything different today than we did in the past. We
change over shortly before the pandemic. Because follow a recipe and mix the necessary ingredients

302 R&D Management 52, 2, 2022 © 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd.
 Table 2. Cross-­case results and main insights
Case A Case B Case C Case D Case E
Situation overview Degree to which the crisis Partly affected Partly affected Highly affected Highly affected Partly affected
has affected1
Trigger and reasons for temporary BMI Reason for integration2 Opportunity Opportunity Opportunity Opportunity Necessity
Perspective of temporary Short-­term Long-­term possible Short-­term Long-­term Long-­term
BM
Source of innovative idea Employee External consultant Owner Owner/network Owner
Relevance of temporary Average Average Low High High
BMI3
How and what changed Network Yes Yes No Yes Yes
BMI typology Focused Evolutionary Adaptive Adaptive Evolutionary
Variance with existing BM4 Far Near Far Near Near
Built on core competencies Yes Yes Yes Yes Yes
Branding issues Yes No Yes No Yes
Value creation Changed Same Changed Changed Changed
Value proposition Changed Changed Changed Changed Same

© 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd.
Value capture Same Changed Same Changed Changed
Effects of temporary BM Effects on Network Yes Yes No No Yes
Strategic flexibility Yes Yes No No Yes
1
Self-­reported affectedness of the firm through the crisis (partly affected or highly affected).
2
Self-­reported reason why firms integrated into temporary BMI.
3
Self-­reported relevance of the temporary BM for the firm in regard to business performance.
4
Individually assessed by all researchers on the basis of the changes to the BMI elements.

R&D Management 52, 2, 2022

Temporary business model innovation

303
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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

together to make a product.’ Case B, who had offline the value capture element, which is not changed if
events with sponsors, for example still sees its companies’ temporary BM is far from the existing
competence in matching the right people together. one. This could be due to the fact that these firms
Instead of doing this offline they do it online now. As do not plan to integrate the temporary BM into the
firms relied on these existing competences, residual firm in the long-­term, i.e., these changes will take
required competences that were not readily available place while continuing to focus on existing BMs and
were very few and could be built up quickly via the changes in value capture are more complex than in
existing network in order to be able to react quickly other dimensions. Second, we could find that based
(Cases A, B, D and E). This made the implementa- on the BMI Typology focused (new to the industry
tion of the temporary BMI very fast and efficient. We and modular), evolutionary (new to the firm and
observed a considerable variance (Cases A and C) modular) and adaptive (new to the firm and archi-
between existing and temporary BMs for those firms tectural) BMI was used to establish a new BM. Two
who only see their BMI as a short-­term opportunity. companies (Cases C and D) followed an adaptive
On the other hand, firms who indicate that they are BMI another two (Cases B and E) did an evolutionary
planning or are already working on a long-­term con- BMI while only one firm integrated a focused BMI
tinuation of their temporary BMI (Cases B, D, and (Case A). The results indicate a relationship among
E) obviously conduct changes in their BM that are adaptive BMI and the affectedness of the existing
generally more incremental in nature. Still, in gen- BMI, which is further described in finding 4.
eral, even in the cases where more radical changes
were carried out, the existing core competencies 4.2.3. Finding 3 –­the effects of temporary business
formed the decisive basis for establishing these BMs models
(Cases A and C). For three firms (Cases A, C, and E), The results showed that the introduction of a tem-
a good reputation and a strong brand belong to these porary BM had positive effects on the case com-
core competencies. These firms were incidentally panies. Cases A, B, and E noted positive effects on
concerned about the effects of the temporary BM on their network. They mentioned that the heterogeneity
their brands (Case A, the most affected firm), thus increased through new contacts which will help in
ensuring that the temporary BMI is aligned with the different situations, moreover they highlighted the
existing brand reputation. An employee explained: positive effects of contacts in various industries that
‘We produce high quality spirits and are now a man- think about solutions differently. Finally they men-
ufacturer of disinfectants. We have to be incredibly tioned that their total customer base increased as they
careful to draw a clear line here in communication.’ addressed new customer segments, which may allow
An analysis of the media, the homepage and their them to address these with their original BM in the
social media accounts interestingly showed that these future. In addition to our expectations, three cases
case firms even prevented to inform the public about (Cases A, B, and E) described BMI creates benefi-
their newly integrated BM. Firms that have estab- cial effects on strategic flexibility, which resulted
lished a significant, well-­known brand among private from a deeper reflection and understanding upon
customers in their daily business are more concerned their own core competencies and the potential stra-
about their reputation than purely B2B firms. From tegic opportunities that could be addressed through
this perspective, the organic farmer who has to pay these. The companies realized that on this basis the
attention to the organic origin of the products sold in dimensions of a BM can be successfully adapted to
his local and digital farm shop had to consider brand- changing conditions. The CEO of case A explained
ing in order not to lose the trust of his customers. their increased strategic flexibility in the following:
Secondary data show that they put a lot of emphasis ‘We have seen what we are capable of when we enter
into communicating their organic status through- a difficult situation. Our team has shown us that we
out their means of communication. The restaurant, can also achieve sales in other areas when a change
which enjoys a solid reputation throughout its region, is needed.’ The managing partner of case B further
also had to keep this in mind. All these firms had to explained: ‘It was good to see that we are flexible
design their new BM in a way that did not damage enough to adapt to this crisis. Our competitors just
the existing brand. cancelled their events while we could still generate
Our results indicate several changes in the BMI revenue.’ Moreover, the new BMs allowed these
elements and different BMI typologies. First we see firms to be more flexible through the generation of
that at least two of the three elements changed in all additional revenue streams, helping to better adjust
of the cases. In one case (Case D), all three elements to changed situations while working on new value
changed. A special situation could be analyzed for creation.

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Temporary business model innovation

Figure 1. Overview on the propositions of temporary BMI.

4.2.4. Finding 4 –­temporary business model The second pattern differentiates the perspective
patterns companies have on the new BMs. Companies who
Despite the limited number of cases the results planned a long-­term continuation of their temporary
indicate two general patterns in temporary BMI as BMI show a different pattern of behavior as com-
a response to crisis. The first pattern differentiates pared to those companies with a rather short-­term
primarily those companies that are significantly perspective. It is realizable that the strategic planning
affected from those that were less negatively affected horizon behind a temporary BM does have effects on
by the crisis. This level of affectedness leads to dif- the investment companies are willing to do, the dis-
ferent results and directions. The crisis did not have tance to the existing BM, branding and also the value
the same effects on all the companies. The ones that capture dimension. Companies that change their BM
were affected to a greater degree (Case C and D) both just for short-­term survival are fine with a larger dis-
engaged in adaptive BMI, which means that their tance between the existing BM and the new BM. As
innovation was new to the firm and architectural. As they do not plan to implement it in the long-­run they
these companies were more constrained by the crisis, are more concerned about their brand and that the
they could no longer follow the existing BM. Due temporary BMI could have negative influence on it.
to the severity of restrictions they had to do archi- Moreover, our data indicate that companies that only
tectural changes in their BMs to generate new rev- follow a short-­term implementation try to keep going
enues. This huge change of the existing BM created with the same value capture as before. On the other
a situation in which none of the effects we realized side, companies that plan their new BMs for a long-­
with other companies (positive effect on network and term perspective actively mention that they invested
positive effect on strategic flexibility) could have money to integrate the new BM. For example, an
been discovered. On the other side companies that onsite visit at Case E showed that they invested into
were less negatively affected changed their BMI new infrastructure to build cooling capacity and a
more incrementally via modular changes and could store on their farm.
consistently benefit from the positive effects of the
new BM on strategic flexibility, on the existing net-
work and on the existing BM. They reported that 5. Discussion and conclusion
they are more aware of their core competences and
could easier respond to environmental changes based 5.1. Synthesis of key results
on this experience in the future which allows them
to be more flexible from a strategic perspective. On In the following section we synthesize our results
the other side they mentioned that they plan to lever- and create five core propositions on temporary BMI.
age the new contacts they reached with their BMI to They explain the relationships of our core constructs
do cross sales and develop innovative solutions for and should encourage future research on this topic
this new segment. Moreover, they mentioned that the based on our empirical temporary BM foundation.
experience during the creation of the temporary BM At the end of this section we provide an overview on
helped them to further develop the old BM. these propositions (Figure 1).

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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

This study focuses on SMEs and indicates that through the newly gained experience and feedback
these companies use temporary BMI to survive a outside their home industry, the network and their
crisis. SMEs are characterized by various criteria. strategic flexibility. While other authors investigated
These include the liability of smallness, which means strategic flexibility as an antecedent of BMI (Bock et
that SMEs have fewer resources available in times al., 2012; Clauss et al., 2021). Schneider and Spieth
of crisis (Eggers, 2020). Due to the limited resource (2014) experimentally showed that BMI indeed
availability, certain crisis management strategies increases the strategic flexibility of firms across dif-
explained through Wenzel et al. (2020) could at ferent dimensions. In line with this, our study showed
maximum be used for a short period of time. A pure that those firms facilitating temporary BMI could
retrenchment or persevering strategy cannot be pur- increase their strategic flexibility and may therefore
sued over a long time, without new revenue streams develop a capability to better react to potential future
as a SME. Authors further explain that SMEs have to crises (Muhic and Bengtsson, 2021). SMEs’ active
be innovative to survive turbulent environments (Le responses create experiences in coping with complex
Nguyen and Kock, 2011), which is clearly indicated situations, and the foundation for further BMIs as a
through our analysis. Thus, in particular for SMEs result (this was explained by Zook and Allen (2003)
a proactive innovation strategy based on temporary in the context of multinationals).
BMI seems to be a feasible solution to manage an
exogenous crisis. On the other side SMEs have lean Proposition 2 An exogenous crisis serves as an
structures which allow them to be more innovative. initiator of temporary BMIs in SMEs.
As our data show it is possible for employees and
external stakeholders to persuade the management Proposition 2.1 If an exogenous crisis strongly
in SMEs to pursue new ideas. Furthermore, the affects an existing BM this leads to the implemen-
management is more directly involved in the firms’ tation of a temporary BMI through adaptive BMI.
operations, leading to direct and quick opportunity
recognition. Concluding SMEs are more likely to Proposition 2.2 Under circumstances where an
engage in temporary BMI as other strategies are exogenous crisis affects an existing BM only partly
not suitable for a long period and the lean structures a temporary BMI has positive effects on the exist-
ing BM, strategic flexibility and increased business
allow them to easier implement new ideas.
network.
Proposition 1 Temporary BMI is particularly ap-
propriate for SMEs during crisis. While Kraus et al. (2020a) describe temporary
BM adjustment as a short-­term response to crisis,
Our cases clearly show that an exogenous crisis is some of our cases clearly indicated that these com-
a trigger for temporary BMI. In all investigated cases panies intend to transform temporary BMs into long-­
the crisis triggered the innovation process. This is term BM changes. For these cases their temporary
in line with existing literature describing that crises BM is not only an opportunity that works during the
lead to new innovation opportunities (Brockner and crisis but can also create revenues after it. In particu-
James, 2008). Saebi et al. (2017) explained that firms lar those companies, whose temporary BMI is close
tend to adapt their BMs when they are under threat. to the existing BM, are actively planning such a long-­
In the case of an exogenous crisis, these opportuni- term integration of their temporary BMI. If a BMI is
ties may be temporary. Temporary BMI differs in only incremental and creates new revenue streams, it
companies that are severely or only partly affected by is a case for long-­term implementation. It is import-
the crisis. Significantly constrained companies may ant to see future potential for the temporary BM after
be in a need to move further away from the actual the crisis too and it should be compatible with the
BM in order to be able to create new sources of rev- existing BM to prevent harming the core BM. In this
enue. These companies must do an adaptive BMI situation it makes sense to integrate the new BM also
based on Foss and Saebi (2017) which forces the firm in the long run, especially if it is possible to integrate
into architectural changes of the existing system. it into the existing strategy.
Therefore, the changes in these companies are more On the other side we observed companies that do
severely and they are not able to profit from positive not plan a long-­term integration of their temporary
effects on their network (new contacts in different BMI. Interestingly, while these companies follow
industries to learn from or customers they can also BMs that are more fundamentally different from
address with the original BM) or strategic flexibility. their existing one they still do not change their value
Less constrained companies benefit from stronger capture dimension. The larger distance to the exist-
positive effects of the new BM on the existing BM ing BM allows them to do a short-­term change to

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Temporary business model innovation

create new revenue streams but it forces them to get have a huge interest to protect their reputation and
back to the old one if they would like to go with the core BM. The reputation of our case companies is
existing strategy (Casadesus-­ Masanell and Ricart, often described as a core competence. They are well
2010). Changes in the value capture dimension are known in their industry and respected for good qual-
more complex than the other dimensions and were ity. Therefore, the creation of short-­ term revenue
shown to require system wide adaptions that could streams through a temporary BMI must be possible
not be achieved through temporary BMI (Clauss et without risking this reputation. This effect is also
al., 2021). This may explains why the case compa- visible in other areas. In their study, Zook and Allen
nies did not change their value capture for temporary (2003) showed that growing firms are always careful
BMI even if more radical BMI were conducted. not to weaken their existing core, and basically only
pursue one opportunity after another. This sequen-
Proposition 3.1 Temporary BMI that are closer tial approach results in easier processes and allows
to the traditional BM of SMEs show potential for a BMI to be implemented without harming the core
long-­term integration and may thus be a basis for of the firm, keeping the possibility to go back to the
long-­term BMI. core BM alive. Companies that plan to integrate their
temporary BM in the long run too are less afraid of
Proposition 3.2 Temporary BMI that are far to the harming their reputation. As proposition 3.1 and 3.2
traditional BM of SMEs are only implemented for a already explained these are also the companies where
short-­term perspective. the existing BM is not that far from the new one. By
pursuing an incremental change of the BM the pos-
Our results indicate that the quick response sibility to harm the old one is more limited. On the
through temporary BMI in SMEs is made possible other side companies that are afraid their temporary
as the case companies rely on existing competen- BMI could harm their reputation are engaged in more
cies and slack resources as a basis for their tempo- radical changes of their BM.
rary BMIs. Moreover, leveraging existing personal
and business contacts increases the speed of BM Proposition 5 Temporary BMIs should be done
implementation, especially during a time where free without harming the existing BM.
capacities are available due to restricted existing
BMs. This demonstrates that temporary BMI may In total we proposed five core propositions with
be facilitated through a firms core competency base. individual sub-­propositions that could better describe
The literature examined how core competencies are temporary BMI. Figure 1 summarizes all these prop-
an essential factor for general BMI (Matzler et al., ositions into a model to show their overall con-
2013). Moreover, it is suggested that incremental nections and provide a better understanding of the
BMI should be developed in line with core compe- investigated variables.
tencies (Prahalad and Hamel, 1990). Zook and Allen
(2003) further explained that it is important to keep
5.2. Contribution to research
situations of change manageable by building on
existing capabilities and working one step at a time. Our study makes two important contributions to the
Changing environments lead to an increasing com- literature. First, we contribute to the literature on cri-
plexity, which can be handled using limited changes sis management in SMEs by identifying and elabo-
in the firm that build on existing competencies. rating a management mechanism that allows firms to
Leveraging the network and core competencies helps survive and may even improve during a severe exog-
to implement a BMI in SMEs. enous crisis such as the one caused by the Covid-­19
pandemic. A quick and successful response to crises
Proposition 4 After an exogenous crisis core is an important issue for SMEs due to their limited
competencies leveraging is used for temporary BMI size and lack of resources (Eggers, 2020). Our find-
in SMEs. ings are in line with previous studies showing that
exploration strategies, engagement in innovation, and
In line with this argument our findings further entrepreneurial orientation may help firms to survive
suggest that firms may implement temporary BM a crisis (Eggers and Kraus, 2011; Vargo and Seville,
quickly, albeit with foresight. This is illustrated by 2011). Beliaeva et al. (2020) relate the positive effect
the obvious concern of our case companies that of an entrepreneurial orientation during a crisis to
temporary BMI my harm their brand reputation firms’ ability to identify opportunities during crises.
and therefore their existing BM. Especially, com- We substantially add to this previous knowledge as we
panies that only create a new BM for the short run further develop initial arguments on short-­term BM

© 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd. R&D Management 52, 2, 2022 307
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Thomas Clauss, Matthias Breier, Sascha Kraus, Susanne Durst and Raj V. Mahto

adaptions (Kraus et al., 2020a) and further explain leading to BMIs that are less radical and address
the concept of temporary BMI as response strategy adjacent industries. In general this finding is in line
for SMEs to create new revenue streams and increase with ideas of the resource based view (Barney, 1991),
liquidity in cases were the existing BM is negatively advocating strategy definition based on unique firm
affected by a crisis. Specifically, more incremental resources. Companies that are aware of their own
adaptations of existing BMs provide opportunities core competencies have the opportunity to scale in
for SMEs to test alternative BMs which can be pur- adjacent domains through an adaption to a changed
sued during/following a crisis. In addition to that, our environment based on emergent strategy and a tem-
research shows that going through a temporary BMI porary BMI. This behavior creates new revenue
increases the strategic flexibility of firms, support- streams in areas that are not or less affected by the
ing previous research of Ates and Bititci (2011) who crisis and create a better chance of survival.
show that current change processes also increase We show that temporary BMI is a successful cri-
SMEs resilience for future crises. sis management approach during exogenous crises
Second, we contribute to the BMI literature by when the core BM is severely affected by changing
substantiating temporary BMI as a new form of BMI. external conditions. However, our finding may also
Kraus et al. (2020a) created the foundation for tem- be more generalizable to BMI under other condi-
porary BMI as a short-­term response to crisis. While tions. Arguably, temporary BMI could also be a rel-
BMI as a response to changing external conditions evant approach during normal times to help innovate
has been presented as a costly and time-­consuming BMs and test alternative ones. Through, such tem-
change that is radical by nature (Snihur et al., 2018; porary BMI, new BMs can be tested, changed, and
Clauss et al., 2021), temporary BMIs create the pos- improved. In line with previous research (Sosna et
sibility to more incrementally change the BM in a al., 2010; Andries et al., 2013), temporary BMI con-
short period of time and with limited resources. stitutes a resource efficient opportunity to experiment
This is possible as temporary BMI relies on exiting with new BMs without putting the core BM at risk.
core competencies of the firm and thus –­although This experiment can lead to a long-­term integration
the dimensions of the BM are altered –­can reduce of the new BM or to a change back to the existing
the challenge of a BMI (Prahalad and Hamel, 1990). one. A key to pursuing an experimental approach
Therefore, our research brings a new perspective based upon temporary BMI is not to endanger the
to the emergence and rigidity of BMs. Casadesus-­ existing BM. We add to this discourse by showing
Masanell and Ricart (2010) initially explained that that one important criterion to enable this process
BMs are the result of a firms long-­term strategy. In in incumbent firms is that the BMI relies on firms’
this view, these rather rigid structures could thus existing core competencies and is connected to the
not be altered at a short-­term basis and reactions to core business (Zook and Allen, 2003). If the BMI is
changing environmental conditions could only be setup to be temporary and draws on the core compe-
conducted through minor tactical maneuvering in the tencies of the organization, a return to the core BM
scope of residual BM flexibility. In contrast to this, is always possible, resulting in limited risks for the
we find that indeed, temporary BMI is possible under firm. This option to return to the core BM is further
certain conditions. This may be explained based enabled through a separation of the old and the new
on Mintzbergs (1978) idea of emergent strategies. BM in time. Temporarily shifting to a different BM
Under extreme conditions such as a crisis caused or running two BMs simultaneously is facilitated if
by a pandemic where the underlying assumptions of the new temporary BM does not harm the old one
the deliberate strategy are not valid anymore firms (Markides, 2013). Moreover, the proximity of a BMI
may develop these emergent strategies, which will to the core competencies of the firm allows it to be
then be operationalized through a temporary BMI. implemented quickly. A core BM does not need
We thereby show that despite previous assumptions, to be forcibly reduced to implement a temporary
temporary changes of BMs are possible independent BM, which could perhaps promote parallel syner-
of the deliberate long-­term strategy of the firm. getic BMs. In this vein, temporary BMI may be a
However, our results clearly demonstrate that potential approach to implement and manage mul-
these temporary BMI are established based upon the tiple BMs (Winterhalter et al., 2016). As suggested
existing core competencies. Thus, although tempo- by Markides (2013) a temporal separation may be
rary emergent strategies may lead to temporary BMI a solution to manage two competing yet integrated
under situations where existing deliberate strategies BMs. This may be facilitated through temporary
are rendered obsolete, these are still in line with the BMI. Furthermore, the initial findings of this study
resource based foundations of the original strategy indicate that in the long run existing BMs can also

308 R&D Management 52, 2, 2022 © 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd.
 14679310, 2022, 2, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/radm.12498 by Nat Prov Indonesia, Wiley Online Library on [05/03/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
Temporary business model innovation

benefit from temporary BMIs through an extension identified in this research should be investigated
of the network into new industries and an improved in a quantitative analysis. Furthermore, due to the
knowledge of the own core competencies. current timing, it is not yet possible to conclusively
say what effect the introduction of a temporary BM
will have on the overall performance of a firm, or
5.3. Managerial implications any resurgences following a crisis. The long-­term
This study shows that a sudden and unexpected crisis effects of temporary BMI on existing BMs as well
can also unlock enormous potential for firms, pro- as on firm performance will have to be the objective
vided they are open-­minded, willing, and prepared of future research. Lastly, we focused on temporary
to search for potential opportunities during a crisis. BMI triggered by an exogenous crisis that forced
Firms can recognize new opportunities in a rapidly-­ firms to develop a new BM in order to ensure the
changing environment, and must be aware of their survival of their firm. However, this study did not
core competencies to recognize opportunities that investigate other more proactive antecedences of
might be far removed from existing BMs. By exploit- BMI as discussed in the literature, such as strategic
ing their own network, and applying their own com- agility (Clauss et al., 2020), learning (Berends et al.,
petencies, unused resources can be quickly bundled 2016) or knowledge management (Hock-­Doepgen
into new BMs during a crisis. With a global crisis, et al., 2021). Future research might therefore inves-
these BMs can serve not only a purely economic tigate the antecedences of temporary BMI besides
purpose, but a social one as well. Rapid responsible or in addition to the external shock caused by the
innovation is an ‘innovation developed in a short crisis. Moreover, the results in this study are only a
period of time in a state of emergency with the hope first analysis of temporary BMI. They are only one
of protecting people and saving lives’ (Gutierrez-­ possible way to pursue these kind of BMs. Future
Gutierrez et al., 2020). Some of the firms examined studies should refine this model and show differ-
in the course of this study can be associated with this ent approaches based on other cases or quantitative
approach, and serve as examples of how to sustain- research.
ably operate long-­term.
In addition to the issue of sustainability, our study
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Ter Wengel, J. and Rodriguez, E. (2006) SME export per- Matthias Breier is Ph.D. student at the Technical
formance in Indonesia after the crisis. Small Business University Lappeenranta, Finland. His research area
Economics, 26, 25–­37. is business model innovation and crisis management.
Vargo, J. and Seville, E. (2011) Crisis strategic planning for He did his undergraduate studies at the University of
SMEs: finding the silver lining. International Journal of Liechtenstein. Moreover, he is the owner of a consul-
Production Research, 49, 5619–­5635. tancy specialized on information system applications
Velu, C. and Jacob, A. (2016) Business model innovation and coding for sustainable finance and lecturer at the
and owner-­managers: the moderating role of competi- University of Applied Sciences Hamburg, Germany.
tion. R & D Management, 46, 451–­463.
Wenzel, M., Stanske, S., and Lieberman, M.B. (2020) Sascha Kraus is Full Professor of Management at
Strategic responses to crisis. Strategic Management the Free University of Bozen-­Bolzano in South Tyrol,
Journal, 41, 7/18. Italy. He holds a doctorate in Social and Economic
Williams, G.A., Woods, C.L., and Staricek, N.C. (2017) Sciences from Klagenfurt University, Austria, a Ph.D.
Restorative rhetoric and social media: an examination of in Industrial Engineering and Management from
the Boston Marathon bombing. Communication Studies, Helsinki University of Technology and a Habilitation
68, 385–­402.
(Venia Docendi) from Lappeenranta University
Winterhalter, S., Zeschky, M.B., and Gassmann, O. (2016)
Managing dual business models in emerging markets:
of Technology, both in Finland. Before, he held
an ambidexterity perspective. R&D Management, 46, 3, Full Professor positions at Utrecht University, The
464–­479. Netherlands, the University of Liechtenstein, École
Yin, R.K. (1981) The case study crisis: Some answers. Supérieure du Commerce Extérieur Paris, France,
Administrative Science Quarterly, 26, 58–­65. and at Durham University, United Kingdom.
Yin, R.K. (2009) Case Study Research: Design and
Susanne Durst is Full Professor of Management
Methods. Thousand Oaks, CA: Sage.
at Tallinn University of Technology, Estonia, and
Zook, C. and Allen, J. (2003) Growth outside the core.
Harvard Business Review, 81, 66–­73, 125. Full Professor of Business Administration at the
Zott, C. and Amit, R. (2008) The fit between product mar- University of Skovde, Sweden. She holds a doctor-
ket strategy and business model: implications for firm ate in Economics from Paris-­Sud University, France.
performance. Strategic Management Journal, 29, 1–­26. Her research interests include small business man-
agement, knowledge (risk) management, responsible
digitalization and sustainable business development.
Notes Raj V. Mahto is a Professor of Entrepreneurship
1
and Chair of Finance, International & Innovation
Henderson and Clark (1990) defined architectural and
Department in Anderson School of Management at
modular innovation. This definition must not be con-
the University of New Mexico. He holds a Creative
fused with the BMI Typology of Foss and Saebi (2017),
that also uses the terminology architectural and modu- Enterprise Endowed Professorship. His research
lar. Their terminology is built on fifteen years of BMI is published in Journal of Applied Psychology,
research and describes the scope of a BMI. Entrepreneurship Theory & Practice, Journal of
2
As a result of the Covid-­19 lockdown, new capacities for Business Research, Journal of Small Business
strategic considerations and new operational implemen- Management, IEEE Transactions on Engineering
tations were freed up in the course of operational cut- Management, Technological Forecasting & Social
backs. We describe these as ‘free capacities.’ Change, and others. He is an associate editor for Journal
of Small Business Management, Journal of Small
Thomas Clauss is Full Professor and chair in Business Strategy, and Technological Forecasting
Corporate Entrepreneurship and Digitalization in & Social Change. He also serves on editorial boards
Family Business at Witten/Herdecke University, of Family Business Review and International
Germany. He received his Ph.D. from the University Entrepreneurship & Management Journal.
of Hamburg, Germany. His research interests in-
clude digitalization, business model innovation and
collaborative innovation generation in the context of Supporting Information
family business. His work has appeared in leading
international journals, such as Long Range Planning, Additional supporting information may be found in the on-
Journal of Supply Chain Management, Industrial line version of this article at the publisher’s web site:

312 R&D Management 52, 2, 2022 © 2021 The Authors. R&D Management published by RADMA and John Wiley & Sons Ltd.