Strategic mapping for business model innovation: a pattern-based approach in the electricity industry

Purpose: This paper advances the understanding of business model innovation by proposing a taxonomy of business model patterns and introducing a strategic mapping framework grounded in this taxonomy. We applied this taxonomy to the electricity sector, which is a critical driver of social and global economic development, capturing its unique characteristics, value chain structures and innovation dynamics. Design/methodology/approach: We took a three-step approach to developing the business model taxonomy, including pattern creation by conducting a literature review, pattern validation using a two-round Delphi card-sorting method and industry specification by allocating each pattern into a specific activity in the industry value chain and by applying the findings to the Three Horizons Framework to map the generated and validated patterns across the horizons. Findings: We identified and allocated 57 business model patterns into 10 meaningful groups. These findings were applied to the electricity industry, reflecting its ongoing transformation driven by renewable energy adoption, market liberalization, and digitalization. The patterns were categorized into the three innovation horizons. For Horizon 1, patterns such as “Power Plant Optimization” (in upstream segment) focus on optimizing existing business operations. Horizon 2 highlights patterns such as “Market Performance Enhancement” in upstream, “Storage Aggregator” in midstream, and “Small-Scale Energy Storage” in downstream value chain segments that scale new business opportunities. Horizon 3 includes transformative patterns such as “Cooperative Utility” (in downstream segment), which pave the way for future industry disruption. Originality/value: The taxonomy of business model patterns for the electricity industry developed in this study serves as a book of reference for scholars and managers interested in business modeling ideas and methods. In addition, we show how the identified business model patterns can be integrated with the Three Horizons Framework enabling energy companies to align their short-, medium- and long-term strategic objectives, making this approach uniquely suited to dynamic and rapidly evolving industries like electricity.