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Disruptive innovation, business models, and encroachment strategies: buyer's perspective on electric and hybrid vehicle technology

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journal contribution
posted on 2023-06-09, 22:34 authored by Smaïl Benzidia, Ruxandra Luca, Sergiy Boiko
According to disruptive innovation theory, customers are swayed by new market entrants through low-end encroachment strategies and/or new market disruption, but these predictions do not account for the rising interest in product categories such as electric vehicles in emerging markets. To bridge this research gap, we draw comparisons between disruptive and incremental innovation to account for electric and hybrid vehicles, respectively. We explore the misalignment between technological growth and customer satisfaction by comparing the electric vehicle business model with the hybrid vehicle business model based on three parameters: channels, value propositions, and customer relationships. Primary empirical data are collected from 307 survey participants. Structural equation modeling is then employed to investigate the similarities and differences between electric vehicles based on their disruptive innovation and hybrid vehicles based on their incremental innovation. We find that electric vehicles’ unique focus on channels leads to a positive influence on their business model and customer satisfaction, while focusing on value propositions leads to positive results for hybrid vehicles. Finally, we discuss the significance of the results considering electric vehicles’ high-end encroachment strategy within the luxury segment and contrast it with the relatively low-end encroachment strategy adopted by sellers of hybrid vehicles.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Technological Forecasting & Social Change

ISSN

0040-1625

Publisher

Elsevier

Volume

165

Page range

1-13

Article number

a120520

Department affiliated with

  • Strategy and Marketing Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2021-01-04

First Open Access (FOA) Date

2022-06-23

First Compliant Deposit (FCD) Date

2020-12-21

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