Innovation, Sustainability, and Business Models

1. Introduction

In current competitive landscape business heavily relies on innovation. All industries have to constantly search creative and innovative methods as old methods are incapable of offering value to the stakeholders. Many business organizations have ambition to be innovative and creative as it offers economic benefits and competitive advantage. In current landscape sustainability is another crucial factor for organisational success. The companies have increasingly aimed to maximise stakeholder value along with the financial performance. Today the investors and customer’s perspective towards businesses has shifted and they increasingly take note of the sustainability efforts of companies (Freeman, 2020). Employees are willing to work with companies which adhere to sustainability development goals, customers are willing to pay more for it. Today more and more businesses are committed to net zero. For example, Apple is committed to be carbon neutral in its supply chain and products by 2030, Similarly Nissan motors is working for zero carbon emission from its manufacturing sites globally by 2050. Unilever is working with its partners to be carbon neutral by 2039. As there is no universal measure or method it is very challenging for businesses to identify and develop that balances the interest of owners, shareholders, employees, partners, consumers, suppliers, environment and coming generation along with financial performance.

Besides technological innovations stakeholders consider green innovation and environment friendly products and services to give competitive advantage. Quest for competitive advantage is considerably linked to business model. There is a strong relationship between the business models and the competitive advantage (Ranjith, 2016). An effective business model is a combination of deliberate alignment of resources and capabilities to strike competitive advantage. Firms in the emerging markets are striving to gain sustainable competitive advantage (Barney 1991). A business model describes how an organisation builds its systems, processes, culture, and leadership interacts with the ecological and business environment, does innovation, and manages all its stakeholders, organisational growth, profitability, and social impact. (Massa et al, 2017). Business Model Innovation is a critical activity undertaken by organisations to combat threat due to new entrants. (Lantano et al. 2022). One of the changing trends is expecting sustainable models for business value proposition. However, research shows many business model innovations fail (Geissdoerfer et al, 2018). The exact reasons for failure remain unexplored. There is a lack of conceptual framework to guide the adoption and implementation of new sustainable business model (Buchholz,2020). This has resulted into a need for designing new conceptual framework which can be a link between Innovation and Sustainability resulting in creating value for its customers.The book chapter is written with the aim of providing a sustainable business model that creates value for its stakeholders. (Evanset al, 2017).