Business model innovation: The case of Telefónica

Business model innovation is needed to adapt a company to a turbulent environment. Innovation can be stimulated by the entrance of new competitors, by changes in factors from the external environment such as technology, policy, economic or sociological conditions, or by the internal R&D department. Chesbrough (2007) identifies different stages in a progression of business models that range from simple to advanced and open business models. This paper applies Chesbrough´s theory to the Spanish telecom company, Telefónica . Telefónica transitioned from a monopoly in the telephone sector by adding television and video service provision to their mix of services. The aim of this analysis is to prove the Chesbrough theory in a real case and see it could be the path for different companies to adapt to market changes and to develop innovation strategies in changing environments.