The Effect of Artificial Intelligence on Business Model Innovation

We are currently entering the Fourth Industrial Revolution and, as every revolution does, it is reshaping business propositions due to the introduction of new and disruptive technologies. Nowadays, more and more companies are re-evaluating their classical business models, which are less enduring than before. For years the business scenario was focused on implementing the same business models better than rivals. While in the last decade the basic rules of competition migrated to a new proposition of using Business Model Innovation to change the rules of the game. New business models have been discovered and deployed by a new breed of companies which tried to capture value in a completely different way compared to the major competitors. Those companies settled new standards requiring competitors to change their value proposition to remain competitive in the same market. The role of Artificial Intelligence in this process is becoming every day stronger and in this new scenario, where “winner takes all”, we can see examples of how companies which implemented in the last decade this breakthrough technology to their business were able to gain a competitive advantage and a premium position over the market, building strong barriers to entry for new competitors. This study aims to understand the impact of Artificial Intelligence on Business Model Innovation and to provide a more in deep explanation of the role of this disruptive technology on new ways of doing business. To start, it will analyze Artificial Intelligence, its features and the different scenarios that will come up in the coming years. Following it develops an in-deep explanation of business models and business model innovation with all the different patterns that a company can use to decide how to implement this new game-changing feature. In addition, this study ends with recommendations and advice on how to implement technology and how to reshape business models, with all the different possibilities that a company can use to leverage Artificial Intelligence to gain a predominant position in the current business landscape.