EXPLORING THE IMPACT OF AUGMENTED REALITY AND VIRTUAL REALITY TECHNOLOGIES ON BUSINESS MODEL INNOVATION

The entrepreneurial environment of the 21st century is becoming increasingly complex. Consequently, firms that strive to be successful in the long run need to employ new concepts to continuously reinvent themselves. Business model innovation (BMI) is such a concept. Furthermore, BMI can be impacted by the technologies augmented reality (AR) and virtual reality (VR). However, little is known about the effect of this impact. Therefore, this study’s aim is to better understand the impact of AR/VR on BMI. The formal objective of the study is “to explore the impact of AR and VR technologies on BMI”. To meet the research objective, the researcher constructs a theoretical research framework based on a business model (BM) and BMI literature review; designs and operationalises a phenomenologist, subjectivist, interpretivist research approach using a multiple case holistic “Type 3” case study design; and implements case data collection in form of semi-structured interviews in five companies that employed AR/VR for BMI. Case study data was collected between January and September 2019. The study indicates that AR/VR are well perceived. The technologies are used for short-term marketing benefits, to optimise company internal processes, and for the development of new products and services. However, working with AR/VR is challenging due to a low maturity level of the technology. Furthermore, BMI through AR/VR requires demanding decisions from management. The study further reveals that AR/VR are still young technologies that do not yet lead to new revenue streams, in most cases. However, research participants expect that the relevance of AR/VR will continue to grow in the future. The impact of AR/VR on BMI is a push in BM newness resulting in twofold consequences: it presents firms with new business opportunities, as well as with significant organisational challenges. Consequently, BMI efforts for AR/VR technology should be strategically guided. Keywords: business model innovation, business models, augmented reality, virtual reality, case studies.