From strategic goals to business model innovation paths

From strategic goals to business model innovation paths: an exploratory study

Heikkilä, Marikka (University of Turku)
Bouwman, W.A.G.A. (TU Delft Information and Communication Technology)
Heikkilä, Jukka (University of Turku)

2018

Purpose: The purpose of this paper is to analyse how different strategic goals of (micro-, small- and medium-sized firms=SMEs) relate to the business model innovation (BMI) paths that SMEs take when improving their business. Design/methodology/approach: The authors conducted 11 in-depth case studies involving SMEs innovating their business models (BMs). Findings: The authors found evidence that strategic goals of SMEs (start new business, growth and profitability) lead them to alternative innovation path in terms of BM components affected. Growth seekers start from the right-hand side of a BM Canvas, while profitability seekers start from the back end, the left side of a Canvas; and new businesses adopt a cyclical approach considering BM components in turn, while at the same time redesigning and testing the BM. The findings of this study also indicate that all three paths gradually lead to improvement in several BM components. Research limitations/implications: Findings indicate that a strategic management view in which strategic goals define BMI also applies to SMEs. The distinctive BMI paths that the authors identified provide evidence to suggest that, although the SMEs may not have an explicitly formulated strategy, their strategic goals determine the type of improvements they make to their BM. All three SME groups started their improvements from different BM components and changed several elements in their BMs in a specific order, forming distinctive BMI paths. Finally, to understand the BMI in SMEs better, more research is needed into BMI processes and into the way BMI is managed in SMEs. Practical implications: The findings of this study help SMEs to anticipate the next steps in their path towards an improved BM. By mirroring their approach to the BMI paths, they can better manage their BM makeover process and focus on their innovation activities. For providers of BMI tools and methods, the study indicates which SME innovation tasks could be supported by tools and how the tools should be aligned with the BMI paths. Originality/value: BMI is attracting growing attention in both research and practice. However, knowledge concerning BMI in SMEs is limited. The authors contributed to BMI research by focussing on the BMI paths of SMEs, i.e. the often sequential, non-linear and iterative steps taken to improve the business by making changes to specific BM components.

Business model
Business model innovation
Business model innovation path
Innovation process
Multi-case study
SME

http://resolver.tudelft.nl/uuid:4d93c633-519c-41c5-9a5e-9845cf69386f

https://doi.org/10.1108/JSBED-03-2017-0097

1462-6004

Journal of Small Business and Enterprise Development, 25 (1), 107-128

Institutional Repository

journal article

© 2018 Marikka Heikkilä, W.A.G.A. Bouwman, Jukka Heikkilä