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.


Introduction
Over the last decade, a policy turn has unfolded in scholarly research of sustainability transitions.That is, scholars increasingly debate how governments might formulate and execute public policy to enable and accelerate sustainability transitions [1][2][3].Advancing new approaches for governments and other actors to steer sustainability transitions has become a significant focus of discussion among social scientists [4][5][6].Others, including political scientists, have extended the transition literature into the realms of policymaking, politics, and political coalitions [7][8][9][10].This policy turn has been accompanied by an increasing use of myriad concepts, ideas, and terminologies from other research areas such as environmental and innovation studiesall with the intention to indicate and explicate the roles, perspectives, and actions of governments in sustainability transitions, leading to a fragmented body of literature.
The literature on transition policies, while being substantial, suffers from the bias of displaying a greater focus on technology [11][12][13].
Although dissecting the socio-technical system and establishing solutions might be easier in a technology-centred analysis, it increases the risk of oversimplifying the other change drivers such as institutions and non-technological solutions.It is necessary, therefore, to move towards frameworks that consider the implications of such policies on other aspects of sustainability transitions [11].As Fagerberg [14] argues, technological innovations must be complemented by non-technological ones to drive structural change and transitions towards sustainability.Nontechnological solutions such as business model innovations or adaptations can bring complementary insight to transition policy.Business models are broadly defined as the way firms frame strategies and execute them through interdependent activities to create value for customers [15,16].Business models can be a source of transformational change because they include the main activities of incumbents' businesses from partnerships with suppliers to relationships with customers.Transformational change in business models can bring about radical system innovation within a socio-technical system [17][18][19][20][21].The transformation of Ørsted from an oil and natural gas business to offshore wind power is an interesting example of a radical business model change towards sustainability [22].
Sustainability transitions literature tends to focus on innovation that happens at the niche level and moves towards the socio-technical regime through "windows of opportunity" [23].This literature considers incumbents' business modelsexisting big players in the market, likely to be involved in unsustainable practicesas a major source of inertia for transitions [24,25].Yet, compared to niche firms, incumbents generally have greater capacity to drive transitions [26,27].Obtaining insight into the strategic implementation of transition policy to leverage this capacity for sustainability transitions holds great significance.So far, however, the nexus between sustainability transitions policy and business models has remained largely underexplored.There has been little research on the potential influence of policy on incumbents' business models.This shortcoming is notable, given arguments that policy interventions may not have a tangible impact on sustainability transitions unless large established firms adapt their business models to diffuse and commercialise sustainable technological innovations [28,29].Business model adaptation refers to "any modification of the established business model of an organization, i.e., change in the content, structure, and/or the governance of activities within the business model" [30,p. 543].
This paper poses the following research question: How do transition policies affect incumbents' business model adaptation strategies towards sustainability transitions?To address this question, it is important to first organise the fragmented transition literature related to government policy.Hence, as a first contribution, this paper carries out a systematic review, which reveals increasing interest in the notions of policy mixes and business models.This insight lays the foundation for an integrative literature review, which identifies and characterises three essential building blocks: transition policy mixes, contextual factors, and business model adaptation strategies.These building blocks underpin the paper's second contribution as it presents a conceptual framework which clarifies how transition policy mixes affect incumbents' business model adaptation strategies.

Methodology
This paper uses a methodological approach which combines two literature review techniques.First, it employs a systematic literature review on literature related to governmental policy for sustainability transitions to visualise previous academic research activities and provide insight into the intellectual structure, trends, status, and emerging research themes.The systematic literature review combines bibliometric mapping and content analysis.These two methods, together, provide a comprehensive overview of the literature on transition policy, track research progress over time and identify the emerging and nuanced research strands of the literature as well as the historical themes.These results lay the groundwork for the integrative literature review which assesses, critiques, and synthesises themes related to transition policy.The integrative literature review results in a conceptual framework which depicts the nexus between transition policy and incumbents' business models and proposes research avenues for further research.

Systematic literature review
Our systematic literature review provides an overview of the diverse background of governmental policies to induce sustainability transitions, traces research progress, and identifies emerging and historical themes based on a combination of bibliometric and content analysis.The bibliometric analysis provides a quantitative analysis of large amounts of scientific and technological literature [31].Bibliometric analysis as an 'unsupervised technique' eliminates subjective and local biases frequently observed in expert judgments.A qualitative content analysis is also carried out to add more validation to the quantitative results thereby providing a deeper and more grounded understanding of the literature.The quantitative and qualitative methods together generate insight into the growth and trajectories of the literature on government policy for sustainability transitions.

Database establishment
Data was collected from the Scopus database in May 2023.Scopus was selected as it is the largest database of peer-reviewed research literature in different scientific fields that includes complete bibliographical data [32].To locate relevant publications the search string comprised the following: (policy OR policies OR regulation OR governance OR governing OR legislation OR regulatory OR tax OR "transition management") in combination with ("sustainability transition" OR (sustainability AND transition)).The search included peer-reviewed journal articles, reviews, conference proceedings, and book chapters to ensure coverage of a broad range of scientific outputs related to transition policies, also in lesser-known publications.
Using the "title, abstract, keywords" search in Scopus, the initial database consisted of 4382 documents.The results were stored in CSV format and a random sample of 200 papers was analysed to check their relevance.Since most sustainability transitions studies also provide some policy recommendations or describe policy implications in the abstract, the first corpus of data included papers that were not relevant to our analysis.Based on the first set of results, the search strategy was further refined.Table 1 shows the refined search strategy (which is broken down into two search strings, A and B) and the final retrieved publications.The results were then analysed again based on their journals.Certain journals which were unrelated to the topic of interest, for instance, health-related ones that included studies on demographic and youth transitions were eliminated.After removing duplicates and records with insufficient bibliometric information (no author, abstract, etc), 2063 documents remained.

Bibliometric mapping and content analysis
Visualising bibliographic data is a popular technique to enhance understanding of the relatedness of research and processes of knowledge transfer [33].VOSviewer software tools can be used to analyse and present the bibliometric results graphically [34].In this software, the unit of analysis (whether keyword, journal, or country) is represented as a node, the line between each node represents their connection (such as co-occurrence, co-authorship, co-citation), and the distance between each node indicates their relatedness (e.g., the closer two journals are located to each other, the stronger their relatedness in terms of cocitation links).
In addition, a content analysis was done on the title, abstract, and keywords of all publications to identify information such as relations,

Table 1
The refined search strategy and resulting papers.patterns, or thematic contexts from the database.In this phase, the text mining functionality of VOSviewer along with other content analysis techniques (i.e., manual or word frequency) were applied to identify and classify essential keywords and phrases extracted from the body of literature.This qualitative method is a useful supplement to the quantitative bibliometric analysis to enrich results.

Integrative literature review
An integrative literature review was used to examine the extent to which the literature on government policy for sustainability transitions considers business models.In contrast to the systematic literature review, this technique is useful when the aim is to assess, critique, and synthesise literature on a research topic to generate new knowledge in the form of a new framework or perspective [35].An integrative literature review is particularly helpful for new or emerging fields that would benefit from a "holistic conceptualisation and synthesis of the literature to date" [36. p. 357].
All 2063 publications were critically analysed, and their main ideas and relationships were investigated.The phrase "business model" was searched for in the title, abstract, author keywords, and index keywords of the publications within the database.51 papers were detected in the first phase.Their abstracts were analysed to remove studies in which business models were not the focus, producing a parent corpus of 23 papers.
Although the context of interest is sustainability transitions and transition policy, we judged that there is scope for expanding the scope of the parent corpus (23 papers) to generate more comprehensive insights regarding the effects of government policy on business models.Therefore, following Vayda [37], this paper employs the concept of "progressive contextualisation" in which relationships between different policies and business models are studied within progressively wider contexts such as management, entrepreneurship, and evolutionary economics.
Borrowing the literature from such fields helps to bring more insight into how governmental policy can affect firms' business models and incorporate them in the sustainability transitions context.279 documents were collected based on a combination of business model adaptation and policy keywords in the Scopus database.After analysing their titles and abstracts, 24 articles were selected that discussed the influential factors in business model adaptation and the accompanying role of government policy.Using a snowballing technique, 30 articles were added from the references to add more perspective to the review.Eventually, a final corpus of 76 articles was selected for the integrative literature review.Fig. 1 depicts the process of gathering data for both systematic and integrative literature reviews.

Research growth and themes
Fig. 2 illustrates the growth in research publications on transition policy between 1982 and 2020.The transition policy publication output grew from 25 publications in 2000 to well over 1900 publications in 2022.This growth is aligned with the fact that the 'sustainability transitions' field itself has gained momentum over the past two decades and has reached an output of hundreds of academic papers per year [38].
Content analysis of the titles and abstracts of 100 of the top-cited papers was conducted to identify key themes of inquiry underpinning this growth.The results show that scholarly studies on the role of governments in sustainability transitions started in 2001 with the study of Rotmans, Kemp and Van Asselt [39] who introduced the notion of "transition management".Transition Management scrutinises how governments can 'influence, coordinate and bring together actors and their activities so that they reinforce each other to such an extent that they can compete with dominant actors and practices' [40,p. 239].The transition management literature was then expanded by other scholars, including Kemp and Loorbach [41], Kern and Howlett [42], Meadowcroft [43], and Loorbach [4].Another strand of literature in this field started with studies on "governance of transitions" [1,44,45] and "reflexive governance" [46][47][48] which both highlight the role of different actors in governing transitions.The concept of governance of transitions "accommodates the fact that state actors rely upon non-state actors in the formulation and implementation of public policy" [1,p. 1498].Reflexive governance is defined as "a mode of steering that encourages actors to scrutinize and reconsider their underlying assumptions, institutional arrangements and practices".Governing sustainability transitions has also been studied within the strands of "innovation policy" [49,50], "environmental policy" [51,52] and "transition policy" [53].Innovation policy is "a measure taken by the government to influence innovation processes through changing or control institutions and the behaviour of target groups" [54,p. 28].While innovation is also a key part of environmental policy, the focus of innovation and environmental policies are slightly different.The focus of innovation policy is on the overall rate of innovation that takes place at regional, local, national, or international levels.In contrast, the focus on environmental policy is the direction of such innovations to address environmental issues [55].
Recent studies on governing sustainability transitions have focused on "policy mixes": a complex combination of different policy instruments within different policy fields, levels, regions, and rationales to deal with the complexity and multi-faceted nature of sustainability transitions.Kivimaa and Virkamäki [56] applied a policy mix perspective to sustainability transitions by investigating policy mixes of passenger transport in Finland.Later, policy mixes were expanded through two studies by Kivimaa and Kern [57] and Rogge and Reichardt [58] which have become the leading papers in this field.A new wave of research has begun to focus on "mission-oriented policies" in the context of sustainability transitions.Mission-oriented policies are potent systemic initiatives that empower the government to foster the growth of particular technologies that provide solutions to economic, social, and environmental problems [59].This new strand has been analysed in the context of sustainability transitions by scholars such as Fagerberg [60] and Zapata-Cantu and González [61].Although mission-oriented policies and their effectiveness in bringing about sustainability transitions are still in the early stages, their potential to achieve net-zero targets makes them a promising area for future research and policy development in this field [62].

Emerging research themes
Co-citation analysis was carried out to understand the overall citation network as well as the old and new topics in this area.Fig. 3 shows the co-citation of the most influential publications (with a minimum citation of 50) in governing sustainability transitions.Out of 2063 articles, 256 met the threshold of 50 citations.The size of the circles indicates the number of citations, and the colour is determined by the year of publication, ranging from purple (before 2008) to yellow (after 2018).According to this figure, there is a core network of papers influenced by some leading papers such as Rotmans, Kemp and Van Asselt [39], Smith, Stirling and Berkhout [1], and Loorbach [63].More information on the bibliometric results of the literature on transition policies is provided in Appendix A.
Although the overall co-citation network is fragmented due to the different terminologies used to describe government policy in sustainability transition, especially in early publications, research on transition policy has become more coherent in recent years.The reason is that the most recent and highly cited publications mainly study the role of governments in transitions as a policy mix 1 [57,[64][65][66][67][68][69][70].Confirming 1 These publications are visually represented utilizing shades of light green or yellow, as illustrated in Fig. 3.

M. Rezaeian et al.
previous research, this emerging research strand argues that to tackle a "wicked problem" such as climate change and sustainability crises, a single policy instrument will not suffice [71].Therefore, we argue that although there are still many different concepts and terminologies used to describe the role of government and policy, the field is becoming more coherent in terms of acknowledging the importance of policy mixes in steering and facilitating sustainability transitions.This acknowledgement is also leading the dynamic research progress discussed in Section 3.1.
In addition, there is another emerging strand of research stemming from the research by Boons and Lüdeke-Freund [72] on the role of firms' business models in sustainability transitions.Considering the significant role of business models in sustainability transitions, a small strand of research has been built around the interplay between business models and transition policy [73][74][75].Although the co-citation network is not very strong, the significance of the research and the citation records shows a strong potential for future studies.

Nexus between transition policy mixes and business models
So far, we have seen from the semi-systematic literature review (Sections 3.1 and 3.2) that policy mixes and the interplay between business models and transition policy have emerged as important emerging themes of scholarly inquiry in sustainability transition studies.This section builds on these results and provides an integrative review of the nexus between transition policy mixes and business models.A critical review of the final corpus of 76 papers indicates that studies can be classified into three principal themes (see Table 2).
The first set of papers in this corpus primarily concentrates on examining the business models adopted by firms to suggest prospective business model strategies that can be implemented in response to transition policy or variations in the political climate.It is important to note that this set of papers often discusses incumbent business models, highlighting their potential role in sustainability transitions.Herbes et al. [76] and Mirzania, Ford, Andrews, Ofori and Maidment [77] considered three possible strategies for firms: closing down, stagnation (such as focusing on existing assets), or growth (such as cooperation and merging with other companies or experimenting with new business models).Specht and Madlener [78] designed a new business model for energy firms to move from resource-driven to customer-driven businesses.Huijben, Verbong and Podoynitsyna [79] considered two types of strategies for business models in response to niche shielding policies and mainstream regulation.They argued that firms pursue "incremental or radical changes in two types of business model strategies: 'fit-andconform' versus 'stretch and transform'.The second set of studies focuses on policies and their impacts on business models.In these studies, the influences of a single policy instrument [76], several policy instruments [73,80,81], policy mixes [75,82] or a general political environment are analysed [83,84].The third set of papers considers factors that influence firms to adapt or not to adapt their business models, e.g., perceived high risk [76,85], resource scarcity [86], financial barriers [85], and market barriers [86].Table 3 presents a comprehensive analysis of the factors associated with the third theme, delineating the drivers and barriers that influence the adaptation of business models.
Across all these three themes, we identify two key issues on the nexus between transition policy mixes and business models that are still nascent and require deeper understanding.First, although some of the studies consider multiple policy instruments, they do not adequately characterise the instruments and do not analyse how they cohere and interact to bring about adaptation in business models.For instance, Al-Saleh and Mahroum [73] analysed the impact of three different types of policy instruments -'sticks', 'carrots', and 'sermons' -on firms' business models.They investigated the impact of each policy instrument in an isolated manner, concluding that 'sermons' perform better in making  firms diffuse green technologies even in the absence of supportive fiscal conditions.
Second, in the transition policy literature, incumbents' existing business models are seen as a significant source of inertia for sustainability transitions.Existing business models within a socio-technical regime form cognitive and structural barriers to sustainability transitions by their dominant logic, rules, and structures which lead to path dependencies and fear of change [139,140].However, there is another view which argues that although incumbents can hamper transitions through their business models, they also have the power to influence transitions by changing, adapting, or innovating their business models.According to Geels [141,p.25,emphasis added]: Although large incumbent firms will probably not be the initial leaders of sustainability transitions, their involvement might accelerate the breakthrough of environmental innovations if they support these innovations with their complementary assets and resources.This would, however, require a strategic reorientation of incumbents who presently still defend existing systems and regimes.
What we can conclude from the integrative literature review is that although the literature attempts to illustrate policy influences on firms' business model adaptation strategies (including the drivers and barriers of adaptation in Table 2), such attempts do not adequately explicate how transition policy mixes influence incumbents to adapt their business models for sustainability transitions.This observation is particularly relevant when considering incumbent business models, which can both impede and accelerate sustainability transitions.Incumbent firms, with their existing resources and established market positions, can significantly influence the pace and direction of sustainability transitions when they choose to adapt their business models in response to transition policy.
Furthermore, our review highlights the need for a more nuanced understanding of the relationship between policy mixes and business models.While some studies have begun to explore this relationship, there is still much to learn about how different types of policy instruments can influence incumbent business model strategies, and whether these facilitate or hinder sustainability transitions.This is the key aspect in the nexus between policies and business models which remains underexplored and, therefore, what we will further elaborate in the next section.

Policy mix and business models: building blocks
Drawing on the literature of the final corpus, this section characterises three essential building blocksmoderating factors, transition policy, and business models -and their interactions to elucidate the influence of transition policy mixes on incumbents' business model adaptation strategies.

Moderating factors
Moderating factors capture incumbent-specific contexts and affect the relation between policy mixes and incumbents' business model adaptation strategies.Charitou and Markides [142] argue that a firm's response to disruptive forces depends on two factors: motivation and the ability to do so.Accordingly, we categorise the moderating factors into two types: transition willingness and transition capability: Transition willingness is related to managerial cognition [97] and

Table 2
Three main themes of the nexus between transition policy mixes and business models.

Main themes
Representative papers the perception of firms of the transition, i.e., perceived high risk [30,76] or perceived success and growth [88], uncertainty and volatility of change [90][91][92][93], perceived loss of competitive advantage [30], and internal firm awareness of environmental issues and environmental impact [110,129].Jackson and Dutton [98] highlight that corporate decision-makers interpret and evaluate events, developments, and trends in their industry based on perceived characteristics of issues either as a threat or opportunity.Managers' perceived high risk and risk aversion are considered as one of the main organisational and cognitive barriers which make it challenging for firms to adopt sustainable technologies and practices [76,85].As Herbes, Brummer, Rognli, Blazejewski and Gericke [76,p. 89] indicate: "members of management perceived it to be their responsibility to shield members from risky activities".Katare, Marshall and Valdivia [88] highlight the importance of perceived success, growth potential, and perceived profitability (opportunity) as a driver to change business models.Although some studies have highlighted the superiority of the perception of threat over opportunity in triggering business model innovation [e.g., [143]], Jackson and Dutton [98] argue that environmental issues and their associated policies can be linked to both threat and opportunity features such as high priority, urgency, and stressfulness.Accordingly, we consider how different features of policy mixes shape firms' perception of the policy landscape and how this perception motivates strategies for business model adaptation.
Transition capability is related to the dynamic capability of firms in acquiring new skills, knowledge, competencies, and resources to deal with transition policy.These resources range from supply chain materials [86] to know-how [76] and professional staff and experience with new appropriate business models [77].Teece [144,p.1]defines a dynamic capability as "firms' ability to integrate, build and reconfigure internal competencies to address, or in some cases to bring about, changes in the business environment".Teece [144] further argues that the speed, degree, and associated cost of aligning a firm's resourcesincluding its business model(s) -with customer needs depends on the strength of its dynamic capabilities.We argue that dynamic capabilities are not only necessary for firms to meet customer needs but also essential to adjust, adapt, or innovate their business models to comply with environmental policy.Zhao, Chang, Hwang and Deng [97,p. 156] refer to this flexibility in response to environmental changes through dynamic capabilities as "strategic agility" and define it as "a firm's capability to proactively choose among different BMs [business models], as well as create new BMs".Required skills and knowledge [75,76,85,[106][107][108], financial resources [75,85,90,92,95,[103][104][105][106], technological advancements [75,106,109], solid demand and market [75,85,86,96,106,[110][111][112], collaboration between different stakeholders [110,[114][115][116][117][118], and relationship with external partners [133] are some factors that can influence a firm's dynamic capability to transition to sustainability.

Business model adaptation strategies
The main issue of business model adaptation for sustainability transitions is whether managers develop strategies to avoid making changes and stick to business-as-usual [stagnation in studies such as [76,77]], adapt to policies with minor changes, or radically change their business models and leverage disruptive opportunities [growth in studies such as [76,77]].The urgency and severity of the sustainability crisis and related policies make it impossible for firms to stubbornly stick to their old way of doing business and keep on using the same routines.Therefore, a change in business model is the only possible adaptation strategy to bring about sustainability transitions.
Business model adaptation can take place through incremental changes and developments in individual business model elements or through more radical changes in the business model's architecture.Incremental changes occur when firms gradually change or innovate one or some of the business model elements.By comparison, radical adaptation involves revolutionary changes and breakthroughs in the entire business model or its architecture which can create new markets and disrupt existing businesses [145].To capture this difference, discussions on business model adaptation have used the dichotomy between exploration and exploitation.Osiyevskyy and Dewald [146,p.58]argue that there are two generic strategies related to business models: "explorative adoption of a disruptive business model, and exploitative strengthening of the existing business model".
Accordingly, we consider two potential business model adaptation strategies in response to transition policy: explorative and exploitative.An exploitative pathway refers to incremental refinements over time or changes in some of the elements of a business model [146,147,2018] to improve efficiency, competitiveness, and operations while avoiding • Voluntary agreements [89] • Signals about the future direction of markets [138] contingencies and risk, minimising costs, and maximising return on investment [146,148,149].The perception of managers of firms with an exploitation strategy is that by making incremental adjustments to some business model elements only, they can comply with policies to a satisfactory level and survive in the current socio-technical regime.Such firms tend to rely on exploitative capabilities that help strengthen the current business model and maintain competitive advantage.Such capabilities mainly focus on short-term financial performance and improving efficiency [150].
In comparison, an explorative pathway refers to firms redesigning their existing business models through more radical changes in the value proposition, value creation and delivery or the overall architecture of the business model [151,152].The critical task is creating new growth and scaling breakthrough innovations by investing and finding opportunities, leveraging contingencies, embracing failure, learning, and rapid adaptation to the changing environment [146,148].Here, the perception of managers is that their firms will not survive in the sociotechnical regime without major modifications to their existing business model [130].Hence, they need to leverage explorative capabilities to adapt to transition policy with breakthrough innovations and expand their business in a new direction to create sustainable growth [150].

Transition policy mixes
A comprehensive and well-designed policy mix is considered effective in addressing a wide range of transition problems such as uncertainty and volatility of policies [75,92,119,120], lack of standardisation [96,124], lack of information [124], policy support [83,125], unreliable and short-term policies [30,92], uncertainty [93], regulatory changes [122,123], complex legislation [100,121], mandating changes [75], and capacity building programmes [136,137].Following Rogge and Reichardt [58], we define and characterise transition policy mixes as a combination of four policy elements through which the two other building blocksmoderating factors and business model adaptation strategiescan be shaped.These elements are designed and implemented through what Rogge and Reichardt call policy processes.Note that as we seek to analyse the impact of existing policy mixes on business model adaptation, in our framework we do not consider how elements of the policy mix come about and why they change, i.e., the policy process.
Policy strategy is associated with barriers such as uncertainty, ambiguity, short-term policies, managerial resistance, and risk aversion [77,93].Studies have highlighted the role of policy strategy in sustainability transitions and technological change [58,153,154].Policy strategy is a combination of policy objectives and the measures (principal plans) designed to achieve them [58].The 'quality' aspect of policy strategy (in terms of clarity, coherence, and scope of application) plays a fundamental role in business model adaptation.Mirzania, Ford, Andrews, Ofori and Maidment [77,p. 1287] state that "recent policy uncertainty has made it difficult for projects to be run successfully".Compared to technological change, changes in business models present a greater risk to firms as they may require them to change all or several important elements of their business model such as value propositions, customer segments, and supply chain partners [143].Therefore, managers are more likely to resist changing their business model [155] as it could be a time-consuming, expensive, and risky process.Under such conditions, a government strategy that is inconsistent or ambiguous in its applicability and direction will not encourage firms to change their existing ways of doing business.
Moreover, the long-term strategic orientation of policies is a key factor in policy strategies [92,111,126].Leisen, Steffen and Weber [126], who study how new sustainable business models work in the energy sector and investigate their risk profile due to regulatory changes, consider short-term regulatory standards with a short implementation period as one of the main risks to business model changes for sustainability.Osiyevskyy and Dewald [30,p.540] state that "high time pressure attenuate[s] the threat-induced explorative business model change intentions".
A long-term orientation of policy strategies with a clear and coherent scope, guidance and timeframe positively affects firms' explorative strategies for business model adaptation.First, it crystallises firms' perception of the inevitability and enduring nature of the policy, convincing them that change is unavoidable and that there is little space to go around compliance with transition policy without business model adaptation.Second, policy strategies' long-term orientation gives firms a chance to develop their dynamic capabilities to respond to such external change.They provide firms time to implement changes and form a picture of their future business models (i.e., value proposition, customer segments, key resources, key partners, etc.) within their longterm vision.
Policy purpose deals with the technological [75,106,109,124] and market factors [75,85,86,96,106,[110][111][112]122] of business model adaptation.Policy intervention is widely considered a fundamental trigger of sustainable technologies.Such technologies' nascent nature requires substantial R&D to be compatible with existing regimes, and their return on investment involves high uncertainty and risk [156,157].Policies induce the development of sustainable technologies by considering both the supply and the demand side of the regime through technology push and market pull [158].
Previous studies highlight the importance of technological advancements in business model adaptation [93,123].Technology-push policies tend to address the supply side or information-related barriers and support the development of technological innovations to ensure their compatibility with the needs of the regime.Although R&D activities do not directly require a change in business model, it could become clear in the development process that ensuing technologies will be incompatible with firms' existing business model [e.g., see the Xerox case in [159]].For a technology push policy to be successful, policymakers need to also think about the potential conflicts it creates with firms' existing business models.The higher the degree of conflict, the more resistance there will be from established players in the market [142].Therefore, policymakers might have to consider to what extent firms receiving R&D support have the dynamic capabilities that allow them to adapt their business model to integrate sustainable technologies.They could target firms that have either proven to be more capable of changing their business model or new ventures that do not have such potential conflict with an existing business model [139].
For policy mixes to induce explorative business model adaptation strategies, it is argued that policies creating a market pull are more likely to have an impact because they create customer demand [156,160].Such policies reduce the uncertainty associated with investments in sustainable technologies because they address the risk of failing to get customers.Kliem, Hügel and Scheidegger [81], who study the coevolution of business models and public policies in transitions, claim that in a market-based system, interventions such as introducing a levy on the extraction of natural resources would be the best option.Nußholz, Rasmussen and Milios [86] state that the difficulty in increasing market share and sales is one of the common barriers firms face in their operations while dealing with transition policy.
Nevertheless, policy mixes that support technology push or market pull do not necessarily lead to explorative business model adaptation.Existing business models cannot necessarily accommodate the sustainable technologies that the policy envisages.Firms that lack the dynamic capabilities to reconfigure their business model might use policy support for R&D to develop sustainable technologies but fail to commercialise them when they create conflict within their organizations.For a market pull policy to have such an impact, it should incentivize firms to change their business models used in the mainstream market instead of testing new business models in niche markets.Policymakers risk supporting the creation of business models that are fully dependent on government support but are not financially viable without such support.
Instrument types provide a range of policy instruments within a policy mix.A successful policy mix contemplates the general picture of the innovation context, identifies the problems firms face to deploy sustainable technologies, and tries to mitigate them from different angles with a mixture of instruments [161,162].It is only with a comprehensive policy mix that policymakers can persuade firms to overcome barriers and make a transformational shift towards sustainability.Popularly referred to as sticks, carrots, and sermons [73], policy instruments are categorised into three groups: regulatory (commandand-control), economic (market-based), and information (soft instruments) instruments.
Regulatory instruments are legal and enforceable tools that influence social and market interactions and the behaviour of individuals and firms through binding regulations [153,163].The coercive nature of regulatory instruments is an effective push to counter firms' resistance to change arising from perceptions or barriers such as managerial resistance and risk aversion [76,97].By providing strict regulations across value chains, governments can trigger unsustainable industries to go into decline and thus become a driver for business model adaptations towards sustainability [122].
Economic instruments are financial and market-based instruments which provide fiscal (dis)incentives to influence social and economic activities [163].They alleviate managers' fear and resistance to change by influencing perceptions of the policy as an opportunity to increase profit (potential growth and profitability) or a threat to lose the market (losing competitive advantage).They, too, mitigate market-based barriers and improve dynamic capabilities by providing financial support [81,104], facilitating demonstrations (pilot projects) and procurement, and creating favourable market conditions [65] for firms to adapt or innovate their business model at a lower risk and cost.
Information instruments are voluntary and non-coercive policies that aim to reduce the 'information costs' of firms [75,81,164] by providing cooperative R&D programmes, voluntary agreements, capacity-building programmes, and public-private partnerships [58,163].Firms can use resources and information provided through information instruments to strengthen their dynamic capabilities, upgrade their knowledge, and create economic value by jointly generating ideas and absorbing external information [165].
Design features and characteristics such as stringency, predictability, credibility, and consistency deal with barriers such as managerial risk aversion [76,97], uncertainty [85], unreliable policies and policymakers [92], and contradicting policies [119].Previous studies have highlighted the importance of such features and characteristics and their impact on policy instruments [166][167][168][169].For example, stringency defines "the ambition level of an instrument" [ [58], p.1624] and shows the level of required effort and expenditure for market actors to comply [170].Predictability shows "how certain and foreseeable the policy signal is" [171,p.113]and addresses investor uncertainty [153] by providing signals about the future [138].According to Osiyevskyy and Dewald [30], low predictability reduces explorative business model change intentions.Credibility is defined as "the extent to which the policy mix is believable and reliable, both overall and regarding its elements and processes" and consistency defines "how well the elements of the policy mix are aligned with each other, thereby contributing to the achievement of policy objectives" [58,pp. 1626-1627].Such characteristics address the barriers related to the unreliability of the policies or policymakers [92] as well as the contradicting policy instruments [96,124] that increase the level of risk and ambiguity [119].
Policy mix design features and characteristics have an important role in encouraging and directing innovative compliance responses which impact policy instruments' effectiveness and efficiency [166,168].For example, a policy's stringency affects firms' transition willingness regarding the inevitability of a change and induces compliance with strict policies [58,172].A high stringency level usually means a great level of ambition that asks for major changes and efforts to comply with the policy and is more likely to bring about explorative pathways to business model adaptation.In contrast, firms can comply with policies with low stringency by only making small and incremental changes to their business models.Also, as discussed, uncertainty is one of the major barriers hindering business model adaptation [77,161].Predictability reduces uncertainty and gives firms the security to prepare their future business model, mobilise resources, and improve dynamic capabilities.Credibility and consistency provide insurance and decrease the uncertainty and risks of investing in explorative changes in business models.They also tackle the perception of the unreliability of the policies [67].

Conceptual framework
Based on the above discussions, we present a conceptual framework which shows the interplay between the building blocks of the transition policy mix, moderating factors, and firms' strategies to adapt their business models (see Fig. 4).As the framework illustrates, to induce any change in incumbents' existing business models, a transition policy mix needs to tackle three types of transition barriers: (i) policy-related barriers through effective policy strategies, purposes, instruments, and design features and characteristics; (ii) transition willingness barriers related to managerial cognition of opportunity and threat; and (iii) transition capability barriers related to the presence or absence of required resources, skills, knowledge, partners, and competencies to change.The framework shows the interactions between the policy mix, moderating factors, and business model adaptation strategies; that is, how the transition policy mix influences firms' transition willingness and capability, which, in turn, drive explorative and exploitative pathways for business model adaptation strategies.
Based on this framework, we argue that the combination of the main elements in a policy mix should be tailored (according to the moderating factors) to support specific business model adaptation pathways.The strategy, purpose, instruments, and different features and characteristics of a policy mix should be customised to address the adaptation requirements on incumbent firms.

Understanding exploitative and explorative strategies
In this section, the two main business model adaptation strategiesexplorative and exploitativeare discussed from a policy perspective.While all policy mix building blocks are needed to promote both exploitative and explorative pathways, they differ in their focus, levels of support and objectives.The focus, goal, and design features of policy instruments should be targeted to address specific adaptation requirements.Exploitative business model adaptation strategies are mainly about leveraging existing capabilities and making incremental adjustments to the existing business models.To support an exploitative pathway, transition policy mixes must be directed at helping firms to improve their operations, efficiency, and competitive advantage.This involves enhancing current technologies, refining processes, and improving efficiency within existing business models.
Conversely, explorative business model strategies are about innovation and discovery of new opportunities involving the adoption of new sustainable technologies, processes, or business models that potentially disrupt the existing markets.To accelerate an explorative pathway, policy instruments would have to focus more on destabilising the prevailing socio-technical regimes.These instruments create a "window of opportunity" for firms to change by facilitating favourable market conditions, delivering necessary knowledge-related support, and addressing adaptation barriers [141].
It is important to note that both strategies are crucial for a firm's long-term survival and success in sustainability transitions.While a successful transition requires firms to step up explorative activities to create a pathway for the long run, it is inherent to a transition that existing business activities cannot be replaced overnight.Hence, a successful transition also involves a pathway for the short to medium term whereby exploitative activities let incumbents use incremental changes to their existing business activities, as a stepping stone towards more radical change in the long run.Only inducing explorative pathways creates the risk that the government alienates incumbents or motivates them to develop sustainable technologies that cannot be commercialised in mainstream markets.Only inducing exploitative pathways creates the risk that incumbents do not change their business activities sufficiently leading to a failure to avoid or mitigate the adverse impacts of the sustainability crisis.

The role of moderating factors in shaping policy mixes
While firms should manage both exploitative and explorative pathways simultaneously [148], we posit that an industry's underlying conditions (moderating factors) determine how governments could best stimulate specific pathways to bring about sustainability transitions.The appropriateness for governments to support exploitative or explorative business model adaptation strategies depends on whether firms in an industry perceive a policy mix as an opportunity or threat (their willingness to change), to what extent they have the dynamic capabilities to change their existing business model, and which specific barriers they face.
In industries where there is much resistance against sustainability transitions, because firms mainly deploy unsustainable technologies, policy mixes should first focus on supporting explorative business model adaptation strategies.Sustainable technologies often stay in the niche due to insufficient evidence for their commercial potential, raising doubt about their chance of survival in mainstream markets.By creating incentives to explore the viability of new business models for sustainable technologies, the government can support the launch of new ventures by start-ups or incumbents that create variety in the market [173].Only once there is sufficient accumulation of their commercial potential for mainstream markets, can the government support scaling such business models and help firms in doing so through exploitation activities to improve efficiency and maximise potential [174].
In industries where sustainable technologies have already reached maturity and there is less conflict with existing business models, the policy mix should instead be tailored to exploitation more swiftly.Here, it is no longer an issue of insufficient market evidence but rather a need for a strong signal to scale up sustainable technologies and accelerate the sustainability transition.Notably, supporting explorative business model innovation in such industries might be counterproductive to a transition as it keeps creating variety, while what is needed is convergence to a new dominant business model for the industry.As the underlying conditions in an industry that support or hinder the uptake of sustainable technologies tend to change over time, policy mixes will have to change accordingly, leading to alternating exploitative and explorative pathways in transitioning to sustainability.
To illustrate our framework, we present two case studies: Germany's Renewable Energy Sources Act (EEG) and Electric Vehicles (EVs) in Norway.These examples show how policy mixes can successfully shape incumbents' response to sustainability transitions.Germany's Renewable Energy Sources Act (EEG), for example, is a mixture of policies and laws to provide guaranteed payment for operators of renewable power installations [175].This policy mix secured cash inflows for a 20-year period for investors in renewable power generation [176].The longterm strategies and clear principal plans of the EEG meant that ambiguities were reduced, and confidence was boosted.The perceived opportunity along with the assurance of long-term profitability led to a destabilisation of the regime and the creation of many start-ups at niche level.Such start-ups adopted innovative business models by renting out plots of land to install solar panels to benefit from the 'early starter bonus' (explorative business model).These innovative business models were perceived as a threat to incumbents.If incumbents failed to act, they would lag behind newcomers that were moving to the mainstream market and were attracting customers.Consequently, they modified their business models by using renewable energy applications in a way that fitted their centralised way of generating electricity (exploitative business model), leading to a significantly more rapid uptake of renewable technologies in Germany [177].
Electric vehicles (EVs) in Norway are another successful example of transition policy mixes that had made this country the leader in EV adoption.The Norwegian EV policies can be categorised into two phases.From 1990 to 2009 -the technology was not mature yetthe focus was on technology niche creation, but since 2009 the focus has shifted to creating markets for EVs.In 2009 the new framing of the Norwegian EV policy mix shifted the policy focus from stimulating Norwegian innovation to promoting the import and mainstream market diffusion of EVs Fig. 4. The interplay between policy mix building blocks, the moderating factors, and firms' strategies for business model adaptation.[178].
In its fifth National Transport Plan 2018-2029, the Norwegian Government implemented an ambitious goal of having only zeroemission new cars and light vans by 2025 [179,p.13].The policy mix has significantly influenced EV market growth, leading to substantial success in the development of EVs in Norway [180].The clarity and ambition level of the policy objectives along with a balanced and comprehensive mixture of different regulatory (e.g., the national target of 85gCO₂/km for the average new vehicle sold by 2020), economic (e. g., measures to reduce the purchase price of EVs, reduces circulation taxes and local incentives, exemptions of battery electric vehicles from 25 % value-added tax on purchase), and information instruments (e.g., R&D grants to support EV fast-charging infrastructure, providing publicly accessible charging outlets across the region, public-private partnerships) were among the key elements in the success of EV diffusion in Norway.Also, the policy mix was designed with appropriate design features and characteristics to provide stability, predictability (e.g., an infrastructure fund has been established to promote predictable and long-term financing of infrastructure projects), stringency, and stricter monitoring and control of efficiency in subordinate agencies [179,181,182].
The EV policy mix has made Norway an attractive market for industry leaders such as Tesla, Mitsubishi, Peugeot, Citroën, and Nissan.In the early 2010s, the market boomed with the introduction of the Mitsubishi i-MiEV and the Nissan Leaf [180].Incumbents entered this market either by direct sales (exploitative business model) or partnerships with start-ups such as ServCo to sell the 'service of mobility' with EVs (explorative business model).The latter business model does not have implications for technological innovation in the EV sector, but it promotes service business models, helps to reduce up-front vehicle costs, spreads risks across the ecosystem, and encourages change in customer behaviour [183].

Conclusions
Research on the design, role, and intervention of government policy in enabling sustainability transitions has flourished in recent years.Yet, it is not well understood how a transition policy affects incumbents in adapting their business models for sustainability.Through a combination of a systematic and integrative review, this paper provides insight into the influence of transition policy on firms' strategies for business model adaptation.The research helps to explain why incumbents' business models might both be a source of inertia and transformational change.The paper's main argument is that it depends on the specific design of the transition policy mix as well as firms' willingness and capability to transition, whether incumbents become friend or foe in the sustainability transition.
The paper's main contribution is the development of a conceptual framework which shows how governments can use the policy mix to address key main barriers holding back incumbents in making radical changes to their current business models.The framework shows how a well-designed policy mix can create drivers and address barriers for incumbents to engage with the sustainability transition more actively through a combination of explorative and exploitative pathways for business model adaptation.A key insight of the framework is that the likelihood that incumbents change their existing business models is due to their transition willingness, which depends on their perception of transition policy as opportunity or threat, and transition capability, which depends on the presence or absence of resources, competencies, and knowledge to realise business model adaptation.The paper also makes a methodological contribution by showing how a joint approach of a systematic and integrative literature review can be used to critically discuss existing research and develop novel insights.While the systematic review shows how the transition policy mix and business models have emerged as important themes in the field of sustainability transition, the integrative review identifies and characterises the conceptual framework's three building blocks: transition policy mixes, moderating factors, and business model adaptation strategies.
By bringing together scholarly work on transition policy and business models, the paper's insights and framework provide several implications for policymakers.First, the research highlights the significance of incumbents' business model for making or breaking a country's transition policy.Merely focusing on how governments can drive technological innovation leads to a narrow perspective on sustainability transitions and increases the risk of oversimplifying other change drivers.Business models, due to their systemic nature, provide a more holistic view of activities being performed in the socio-technical regime by incumbents together with their main stakeholders such as suppliers and customers.Considering business models helps to scrutinize the entire socio-technical regime in its transition to sustainability.This approach helps policymakers to understand which factors influence incumbent strategies for business model adaptations, identify sources of inertia, and tackle barriers with appropriate policy measures.
Second, policymakers can accelerate sustainability transitions by bringing incumbents into the equation.While incumbents are often seen as resisting forces, our framework suggests how governments can help create explorative and exploitative pathways for business model adaptation to help incumbents become change agents instead.While there are indeed many barriers hindering incumbents to see the transition policy mix as an opportunity rather than threat, if governments can change this perception by carefully designing a policy mix with a longterm strategy and a clear purpose and effective instruments, incumbents' resources and position in the market can be leveraged to create transformational change.To trigger such transformational change, policymakers should design the transition policy mix so that the current business model is no longer seen as having to be sacrificed for the sake of sustainability but as providing the leverage to create business opportunities for future competitiveness in a more sustainable economy.
The paper has several limitations which, when carefully addressed, can pave the way for future research.The paper's insights are based on using bibliometrics and content analysis.We recognise that such analysis can be critiqued for researcher bias.Attempts have been made to reduce such bias by using a clear research design and a combination of methods that enable triangulation.However, we suggest bringing expert judgement to the bibliometrics and content analysis to allow for a broader interpretive assessment and provide more context to the existing results.While a comprehensive dataset has been used for the review, based on articles collected from the Scopus database, only English language articles have been covered, thus missing out on articles written in other languages.Also, given the fast growth of transition policy research, it is almost impossible to be fully up to date as new work is published on a daily basis.While existing work still stresses incumbents as the ones resisting the sustainability transition, given the recent heightened public attention to the sustainability crisis, this role might now be changing.It would be interesting, therefore, to see whether more recent research shows a different, more constructive relation between transition policy and business model adaptation.Finally, this paper's main ideas are based on a review of existing literature with a focus on how transition policy drives business model adaptation.However, the opposite can occur, too.Previous studies have not only analysed how incumbents respond to transition policies but also how they shape them by deploying various political strategies such as lobbying, donating to political campaigns, or shaping public discourses [23,[184][185][186][187].Adding incumbents' influence on transition policies would show a two-way relationship between government and incumbents in the sociotechnical regime.Future review studies could also look at this twoway interaction.
Finally, due to the complicated nature of business models, we limited ourselves to considering two business model adaptation pathways only, i.e., explorative and exploitative.Adding more empirical work could deepen research on business model adaptation strategies by providing a more fine-grained analysis of all the different elements of incumbents' business models: value creation, delivery, and capture, along the whole supply chain.And, while this paper presented two successful transition policy mixes (Germany and Norway) as examples of the interactions between transition policies and business models, it would be worthwhile to also analyse a failed transition.This would enable identifying the potential challenges inherent to a government's transition programme.

Declaration of competing interest
We wish to confirm that there are no known conflicts of interest associated with this publication and there has been no significant financial support for this work that could have influenced its outcome.development of a scientific community's networks, facilitating some trajectories and impeding others" [194,p. 1247].To verify this a co-authorship network analysis was also carried out which confirmed these three countries have had the most joint publications with each other, leading to strengthening their citation profile with replicated and validated publications.

Thematic perspectives of literature on transition policy mixes
Thematic or content analysis is a commonly used technique to identify, analyse, and report key themes within a scientific field [195].Although thematic analysis is usually a qualitative technique, it can be facilitated through some quantitative tools such as text mining or statistical analysis [196].In the previous sections, different ways of conceptualising the role of governments and policies in transitions were identified through trend analysis, content analysis, and network analysis of publications.In this section, the main themes (contexts) that are considered important subjects of empirical investigation within the field of transition policies are identified.
First, the title, abstract, and keywords of the papers were broken into words and phrases.Then the list of keywords/phrases was manually filtered to select the most relevant keywords and remove generic ones such as sustainability transitions, governance, policy, article, case study, survey, or the name of countries.This is of importance as such broad and general terms can influence the results as they are common words in many different themes.After filtering the main keywords, the VOSviewer software was used to identify, cluster, and visualise the main themes based on the frequency of keywords and their co-occurrence with others.Fig. 0.2 presents a co-occurrence network of the most common research themes and their sub-fields.
As indicated, the most common themes within this field can be categorised into five clusters.Energy transitions [53,197] in one of the hottest topics in transition policies with a focus on renewable energies such as solar [198,199], wind [64,200], and biofuel [201,202].Sustainable transportation and electric vehicles as promising technologies in transitions towards sustainability are another common themes in this database [203][204][205].The next cluster of publications belongs to urban transitions with subfiles such as urban resilience [206,207], water management [208,209], sustainable cities [210,211], and smart cities [212,213].Sustainable food [214,215], environmental forest policies [216,217], biodiversity [218,219], and sustainable agriculture [220,221] represent the fourth thematic cluster.The last thematic cluster represents the words related to technological innovations/change [64,222] towards sustainability and its frameworks such as multi-level perspective [223,224].In this map, the distance between each keyword shows the extent to which they belong to similar themes.As this is a general context in which many empirical studies can benefit from to conceptualise or theorise transitions, this cluster has been located in the centre of the network.M. Rezaeian et al.

Fig. 1 .
Fig. 1.The methodological framework including two literature review techniques.

Fig. 3 .
Fig. 3. Co-citation network of the most influential publications in the transition policy field.

Table 3
Barriers and drivers of business model adaptation by firms in response to transition policies.