Transforming titans: The role of policy mixes in business model adaptation strategies for sustainability transitions

In recent years, research on government policies in sustainability transition studies has proliferated, largely focusing on their role to drive transformational change through technological innovation. This strand of research faces two main challenges. First, the research has remained largely fragmented due to the breadth of concepts it encompasses. Second, despite the acknowledged importance of business models in sustainability transitions, there is a lack of understanding about how policies influence firms' strategies for adapting their business models towards sustainability. This paper addresses these gaps by conducting a two-step systematic literature review. It organises the research strands related to transition policies and highlights their impact on business model adaptation strategies of incumbent firms. Incumbents are chosen as the unit of analysis because they have greater capacity and potential to induce systemic transformations compared to niche firms. The results lead to a conceptual framework that elucidates how transition policy mixes affect incumbents' business model adaptation strategies by influencing their willingness and capability to transition. The findings emphasise the importance of incumbents' business models in transition programmes, cautioning against a narrow focus on technological innovation. A systemic perspective considering business models helps policymakers to better understand factors which influence incumbents' business model adaptation strategies, identify sources of inertia, address barriers to appropriate measures, and utilise incumbents' capabilities and resources to bring about transformational change for sustainability.