How Regulation Affects Business Model Innovation

Business regulation is the norms, standards, principles and rules, and their enforcement governs commerce. Firms need to be aware of the potential impacts of regulation on their business models, anticipate changes in the regulatory landscape, and adapt their business models accordingly. This article surveys seven archetypes of regulation and, from that, identifies six key regulatory trajectories affecting business model innovation. The article offers a 2-by-2 model to assist managers in coping with business model innovation reactions to both negative and positive regulatory effects.