Navigating the business model design space: A case of insects as food and feed in Sweden

Business model innovation (BMI) plays a key role in driving sustainability transitions, yet its interplay with the broader socio-technical system is often overlooked. This study investigates BMI in the emerging niche of insect-based food and feed in Sweden, employing a combined Business Model Design Space (BMDS) and dynamic capabilities perspective. Drawing on interviews with ten insect firms, we examine how firm-level dynamic capabilities shape BMI strategies and interact with the BMDS. Our findings show that firms adopt different strategies to navigate the opportunities and constraints they perceive within the BMDS. We introduce a novel typology that outlines how firms perceive and respond to the BMDS through two dimensions: BMDS Sensing (systematic & intuitive) and BMDS Enactment (fit-and-conform & stretch-and-transform). This typology identifies four distinct BMI seizing modes: Analytical Adaptation, Analytical Shaping, Instinctive Adaptation, and Instinctive Shaping, highlighting how firms interpret and enact the BMDS through BMI. By integrating dynamic capabilities theory with the BMDS framework, we address the gap of accounting for varied perceptions of the BMDS among different actors. We show how firms exercise strategic agency in shaping and responding to system-level dynamics, offering new theoretical insights that bridge firm-level and system-level perspectives on BMI within emerging niches.