Consumer-CEO interaction as catalyst for business model innovation in established firms

Business model innovation is especially difficult for well-established firms. We develop a trait-process-outcome model showing how potential consumers can inform and energize established firms’ CEOs to better develop, analyze, and choose among new consumer value propositions that are distant from their firms’ current business models. First, we identify which types of potential consumers are most likely to aid CEOs in developing effective new consumer value propositions. Then, we outline the process characteristics for CEO-consumer interactions that are most likely to produce more positive outcomes. We discuss the implications of our theory for the literatures on business model innovation, innovation in established firms, and demand-side strategies.