Business model design in relocation management through qualimetric approach

A System Perspective on Business Models

An approach to business model innovation and design for strategic sustainable development

PurposeThe purpose of this paper is to contribute to the literature on business model (BM) design by deepening the relationship between BM design themes and performance in a sample of firms based in a developing country. In particular, the authors deepen the relationship between business model novelty (BMN), business model efficiency (BME), the trade-off between novelty and efficiency – that the authors call BM ambidexterity – and performance.Design/methodology/approachData are drawn from a sample of 107 manufacturing and service firms based in a developing country (Albania). Hierarchical regression is used to assess the impact on firm performance from the two BM design themes and their interaction.FindingsThe authors find novelty-centred BM design is significantly related to firm performance while efficiency-centred design has no direct effect on performance. However, the authors also find that BME positively moderates the relationship between BMN and firm performance.Research limitations/implicationsThe relationship between BM design and firm performance can be better understood if contextualised. In the paper, the authors find that different types of BM designs have different impacts on the performance of firms based in a developing economy. While novelty matters, quite surprisingly the authors find no support for efficiency. Additionally, the authors find the interaction between the two design themes (BM ambidexterity) to have a positive impact on firm performance.Practical implicationsThe surveyed firms based in a developing economy appear to benefit from novelty-centred BM designs. Efficiency-centred designs have a more ambiguous role: while efficiency alone seems not to pay off, an efficient BM design may facilitate the market exploitation of a novel design.Originality/valueThis study responds to a precise call for additional quantitative empirical studies on the relationship between BM and performance. The study also contributes to an emerging stream of research focused on BM ambidexterity.

What is a business model? In its essence, a firm’s business model is a routine for (i) creating economic value for the firm’s stakeholders and (ii) appropriating part of this value for the firm itself and its shareholders (Osiyevskyy, 2014; Osiyevskyy & Dewald, 2015; Zott et al., 2011). In this definition, the term “routine” is used in a sense of the evolutionary theory of the firm (Nelson & Winter, 1982), as a regular behavioral pattern within an organization. In other words, a business model is a regular sequence of activities performed by the firm that serves two purposes. On the one hand, a business model must create economic value for all of a firm’s stakeholders (most importantly, customers, partners in the value chain, and employees), sufficient enough to motivate them to interact (participate in economic transactions) with the firm. This value creation implies that the benefits that each stakeholder receives from the firm exceed the costs incurred. On the other hand, the business model must ensure that a sufficient portion of the created economic value is retained for the firm’s shareholders in the form of profit; therefore, the total revenue received by the firm from all economic transactions with other stakeholders must exceed the costs incurred by the firm.

The design of business models has a substantial effect on the development and success of a company (Zott and Amit 2010). In this context, different management processes can be identified in literature, and two fundamental tendencies of design can be distinguished. On the one hand, the design of business models is observed in the context of a specific formation of a company focusing on the planning process in particular. On the other hand, the (re-)design of an existing business model is examined in the context of an existing company. The (re-)design of existing business models is explained in detail in Chap. 6 (Adjustment and Modification of Business Models). Therefore, this section focuses on the design of new business models.

The article addresses the issue of optimizing business relocation management in the face of contemporary economic and social challenges. Special attention is given to the application of qualimetric approaches for comprehensive evaluation of business relocation management effectiveness. The study highlights that traditional analysis methods, primarily focused on financial indicators, do not sufficiently consider important qualitative factors such as socio-cultural aspects, employee adaptation, and communication with stakeholders. The use of qualimetrics enables the integration of qualitative and quantitative approaches for a thorough assessment of various aspects of relocation. The article presents a methodology based on the use of T. Saaty’s hierarchy algorithm to determine the weight coefficients of different resources (material, financial, human, technological, and managerial). This allows for a systematic evaluation of resource importance in the relocation process and their optimization to achieve the company’s strategic goals. The main focus is placed on areas requiring further research, particularly risk analysis, evaluation of communication strategies’ effectiveness, and change management in new conditions. The study’s findings emphasize the importance of careful pre-relocation planning, consideration of the legal, economic, and cultural characteristics of the new region, as well as effective personnel management and adaptation to new circumstances. The application of qualimetric methods helps businesses minimize relocation-related risks and improve resilience and competitiveness in new markets. The article provides recommendations for businesses on improving relocation management approaches, particularly through the implementation of comprehensive resource assessments and risk mitigation strategies. This ensures successful business operations in changing environments, enhances management quality, and contributes to achieving strategic goals. The development of a specialized methodology for relocation assessment can serve as a foundation for further research and practical applications in business management.

Effective knowledge change and reorganisation are important factors in the success of business model (BM) design. However, the existing literature has rarely focused on investigating the suitable match between the existing knowledge base and BM design. Building on the knowledge-based view (KBV), this research analyzes the effects of efficiency- and novelty-centered BM designs on firm growth, which will be differently moderated by the knowledge factors of breadth and depth. With the empirical examination of 290 Chinese enterprises, we found that to foster firm growth, efficiency-centered BM design benefits more from a deep knowledge base than from a broad knowledge base, whereas novelty-centered BM design benefits from both. The above results provide new empirical evidence for understanding the contingency effects of knowledge base on the effectiveness of BM design for firm growth.

Purpose The aim of this paper is to explore the managing of cost drivers using a business model (BM) design. Particularly, the paper explores the link between a BM and cost driver analysis adopting a service-dominant logic (SDL) perspective. The empirical domain addresses the dynamic and complex scenarios of electric cars, where many actors are involved, several marketing and technological aspects are still unclear and where the high cost of batteries delays the wide diffusion of electric vehicles. The paper explores how SDL could support the BM design and how the cost driver analysis and BM design are linked when the SDL perspective is adopted. Design/methodology/approach This paper analyses secondary data and findings collected by interviews performed with managers belonging to the automotive sector. Findings The results show that the BM design could be a solution to address cost problems and the cost driver analysis may play a role in formulating an economically sustainable BM. Splitting a product into a “package of services” can provide direction for research of an alternative BM design in an attempt to manage the impact of cost drivers and pursue economic sustainability. Originality/value This paper explores a topic that has not yet focused on cost management research, i.e. the link between BM and cost driver analysis adopting an SDL perspective.

Purpose This study examines the impact of business model (BM) design on the performance of entrepreneurial firms (EF) in emerging markets, specifically Indonesia. It examines the impact of novelty- and efficiency-oriented and dual BM design on EF performance and explores contingency variables that may moderate the link at micro, organizational and industry levels. Design/methodology/approach Employing a quantitative approach, this study analyzes 158 Indonesian EFs with data collected through structured questionnaires and analyzed using multiple regressions. Performance of EFs is measured by return on assets (ROA) which captures both operational efficiency and the impact of innovation within the chosen BM design. Findings Both novelty- and efficiency-oriented BM designs positively impact EFs' performance; however, a simultaneously high emphasis on both leads to diminishing returns, suggesting a strategic trade-off. Managerial experience is the only significant moderator that positively moderates the effect of dual BM designs but weakens the link between novelty- and efficiency-oriented BM designs and performance. Practical implications In emerging markets, EF managers should choose their BM design carefully. Less experienced managers can benefit more from focusing on either novelty or efficiency, whereas experienced managers are better suited to leveraging a dual-oriented BM design. Originality/value This study provides empirical evidence of the interplay between different BM designs and the moderating role of managerial experience on EF performance in emerging markets, offering new insights into the complex link between BM design and performance.

Because small and medium-sized enterprises (SMEs) are pivotal to the health and vibrancy of economies, it is crucial for researchers to understand the factors that significantly underlie SME performance. Two of the most widely identified antecedents to SME performance are innovation and networking. However, despite widespread attention, the theoretical and empirical status of the relationships between innovation, networks and SME performance remain uncertain. Some researchers note that claims regarding a direct positive relationship between innovation and networks with performance fail to adequately account for the variables that mediate this relationship. In contrast, while much research has been undertaken into the performance benefits of innovation and networks, the exponential increase in the number of publications heralding the performance benefits of business model design and business model innovation received very scant empirical support, almost non-existent for SMEs. Business model design is seen as a powerful mechanism for unlocking and enhancing the value of business processes, including innovation. Empirical evidence presented in this thesis tangibly supports this assertion and thus creates a more solid foundation for future development of the business model view of the firm. The purpose of this thesis, comprising four studies, is to theorise and research the nature of the relationship between innovation breadth, networks and business model design with SME performance. The central research question of this thesis asks: How do innovation breadth, networks and business model design relate to SME performance? Study One systematically reviews a large sample of SME growth and performance literature to identify and interpret emergent concepts, themes, trends and gaps. Study One backgrounds the three empirical studies that that follow to argue, using Resource-Based Theory, that the resources required for developing competitive advantage are both physical and intangible; of the two, intangible resources have the greatest strategic potential. In other words, the thesis finds that SMEs lacking physical resources could develop more sustainable competitive advantage by relying more heavily on leveraging path dependent, socially complex, and causally ambiguous intangible resources. Social capital and technological competence, associated with networks and innovation, represent highly desired intangible resources. Business model design organises these resources to create value for the customer. Therefore, innovation across the elements of the business model when designing or reconfiguring the SME’s business model acts as dynamic capabilities that enhance SME performance. The systematic literature review is followed by three empirical studies that use longitudinal and cross-sectional datasets of Australian SMEs. Study Two introduces the concept of innovation breadth, as the number of distinct types of innovation that firms use, or their innovation diversity, and examines the linearity and temporality of its relationship with SME performance. This examination both confirms it to be positive and provides evidence of the diminishing and negative returns of innovation breadth. Such diminishing and negative returns are directly related to increased innovation breadth and the time lag between innovation implementation and performance measurement. Studies Three and Four examine the mediation effect of innovation breadth on the relationship between networks and SME performance (Study Three) as well as the mediation effect of business model design themes on the relationship between innovation breadth and SME performance (Study Four). The combined findings from the last three studies provide sound support that maintaining strong heterogeneous network ties will improve SME performance, but only when the social capital embedded in such network relationships supports innovation breadth. In addition, persistent implementation of moderate levels of innovation breadth would optimise SME performance, but the performance benefits of such innovations would only be unlocked if it is implemented within a coherent business model, designed around the novelty or transaction efficiency themes as primary value drivers. Collectively, the four empirical studies contribute to the SME innovation field by more precisely explaining the relationships between innovation breadth, networks, business model design and SME performance. This thesis therefore highlights and confirms the importance of intangible assets for SME performance and also accounts for the intermediate processes that translate these resources into SME performance by showing that innovation breadth and business model design act as dynamic capabilities. SMEs are advised to focus on building network relations that foster innovation breadth, to focus their innovation activities during any given year by limiting innovation diversity and to focus the design of their business models around either the novelty or efficiency value themes. Such knowledge offers guidance for SME managers who believe that all networking and innovation investments will improve their SME performance. Given the potential costs and risks of networking, innovation and business model design activities to SMEs, practitioners and policymakers are informed about the potential dangers of overextending limited resources and capabilities. A better understanding of how wide SMEs should cast their innovation net, how to construct optimal network structures, and how to design business models along dominant value themes may therefore greatly benefit theory, policy and practice.

An increasing number of scholars and practitioners are advocating for the exploration of the demand-side consequences of business model (BM) design from the customer’s perceptual perspective. Consistent with this view, this paper discusses how BM design can achieve customer loyalty through the mediating role of customer citizenship behavior. Therefore, this paper puts forward a series of hypotheses regarding relationships among BM design, customer citizenship behavior, and customer loyalty and further tests these hypotheses through hierarchical regression analysis from data collected from Chinese customers. The results show that both efficiency-centered and novelty-centered BM designs are the antecedents of customer citizenship behavior and customer loyalty. The results also show that efficiency-centered and novelty-centered BM designs can directly affect customer loyalty, and indirectly affect customer loyalty through the mediating role of customer citizenship behavior. Our findings contribute to research on the relationship between BM design and customer loyalty, and research on the demand-side consequences of BM design. Our findings also contribute to research on the link between BM design and marketing, and research on BM design for corporate sustainability. Our findings have management implications for practitioners as well.

PurposeThe purpose of this paper is to investigate the relationships between firm capabilities, business model (BM) design, and firm performance.Design/methodology/approachThe study provides a quantitative assessment of the proposed model using a sample of 411 small- and medium-sized enterprises. Heckman’s sample selection model is employed as an econometric framework.FindingsThe outcomes demonstrate that the adoption of a given BM is endogenous with respect to firm capabilities, different capabilities spur the adoption of different BM, and that different BM designs have variable impacts on firm performance.Research limitations/implicationsSome investigated variables were operationalized using proxies, and firm performance was measured based on a self-assessed scale.Practical implicationsSince different types of capabilities are at the bases of different BM designs that eventually reverberate on firm performance, SMEs should carefully balance their financial resources invested in the development of capabilities.Originality/valueThis study represents one of the first attempts to investigate the relationships between firm capabilities, BM design, and firm performance.

Purpose This study aims to systematically explore the antecedents of novelty-centered business model (BM) design for digital start-ups in emerging markets and contributes to the discussion on resource orchestration theory and entrepreneurial learning theory, especially in the current digital era. Design/methodology/approach In order to explore the relationship between antecedent configurations and novelty-centered BM design, this study employs the fuzzy-set qualitative comparative analysis (fsQCA) method to analyze 25 cases of gold medal-winning projects from the China College Students’ “Internet+” Innovation and Entrepreneurship Competition in 2018 and 2019, which covering 11 provinces, cities and regions in China. Findings This study identifies four types of paths to high novelty-centered BM design of digital start-ups: resource-leveraging-oriented, resource-orchestration-driven, entrepreneurial-learning-driven and resource-learning synergy. The finance industry and science and technology service industry are significantly resource-leveraging-oriented. The information technology service industry is characterized by resource-orchestration-driven, while the education industry is mainly entrepreneurial-learning-driven. Lastly, the entertainment industry and wholesale industry are resource-learning synergy. Practical implications This study provides practical insights into novelty-centered BM design for digital start-ups in emerging economies. Start-ups in different industries should choose a shaping path suitable for their conditions and promote novelty-centered BM design. Originality/value First, this paper constructs a theoretical framework for BM design of digital start-ups, distinguishing it from the technology-driven BM design commonly observed in start-ups from developed markets and enriching the research on BM design in emerging economies. Second, by integrating resource orchestration and entrepreneurial learning, this research identifies four types of paths that drive high novelty-centered BM design, developing the research on combinational antecedents of BM design for digital start-ups. Lastly, this study applies resource orchestration theory and entrepreneurial learning theory to BM design and reveals their substitutive and complementary effects, thus advancing these theories in the digital era.

Business model design involves configuring what activities organizational actors perform, how activities are distributed among actors, and how activities are interconnected in a value-creating activity system. One way to design innovative business models is to introduce new actors to take over activities that were previously conducted by other existing actors. Such innovation can create difficulties for executives of a focal firm to understand system dynamics and to design an effective business model accordingly. The current study investigates how executives of an entrepreneurial firm design its business model to introduce a new business model stakeholder into a nascent market. Through the lens of interdependency, I ask 1) whether introducing new business model stakeholders generates challenges concerning interdependencies in an activity system, and 2) if so, what actions executives of a focal firm takes in business model designing in response these interdependency challenges. Based on an in-depth longitudinal case study of a start-up company that provided crowdsourcing-based online laundry service, I develop a theoretical model to answer the above questions. The data reveal that three specific forms of interdependency (i.e., role, epistemic, and goal interdependence) drive business model design when executives introduce a new business model stakeholder in an entrepreneurial firm in a nascent market. In response to challenges concerning these forms of interdependency, executives of the focal firm design their business model with four actions: Demarcating roles, instilling knowledge, constructing goals, and tuning interfaces. This business model design process resembles the process of plant grafting to create graft-chimaeras—i.e., symbiotic combinations of new and existing parts, ensuring the interconnectedness between the new actor (the “scion”) and the existing actor (the “stock”) and thus strengthening the vigorous cohabitation of both. The study contributes primarily to the literature on business model, by incorporating theories of organization design and documenting a transitional process from novelty-based to lock-in-based business model design.

Today, firms all over the world have to deal with dynamic business environments. Static business models are no longer valid, and lose impact faster than changes can be implemented to address the problem. Fast-moving digitalization has made information more transparent, strengthening the role of the customer. At the same time, the provider can have a much closer relationship with the user, thanks to real-time communication. To meet changing user needs and to stay competitive over time, businesses are being forced to adopt a dynamic and user-centric business model perspective. However, corporate practice does not have a process for developing dynamic business models, and user-centric business models that can be designed and changed using smart technologies have not yet been systematically integrated. To stay competitive, companies need to rise to this challenge. But how? The aim of this dissertation was to develop a dynamic, user-centric process model for business model design and change, and to evaluate the model’s ability to maintain a competitive advantage in the mobility sector. First, the differences between static, dynamic, and user-centric business models and their corresponding attributes were deduced. Then, these findings were combined into a process model using system dynamics logic. This model considers the user a co-creator of value and helps managers react to real-time changes in their business model environment. Finally, a mobility sector case study is presented to highlight the relevance of this model to real-world application. These findings were used to develop the business model cycle (BMC). In this dissertation, the phases, underlying components, activities, and connecting input and output streams of this process model are described. The BMC consists of two interlocked loops – the user phase and the provider phase – which continuously send feedback to one another. A touch point was included between the loops so that firms can observe the user in their environments and adapt their business model simultaneously according to changes in their users’ needs. This meta process model configuration makes a significant contribution to the theory of business model dynamics and customer centricity. The BMC supports the strategic management of dynamic, user-centric business model design and change activities. It describes a step by step procedure of business model design that includes ideation, prototyping, and integration of business model options. Moreover, it allows continuous monitoring of the business model environment and adaption of the model accordingly. At the same time, bidirectional interaction between the user and provider is possible, allowing the provider to adapt to their users’ needs. The BMC is unique in that these processes can take place simultaneously. The real-world case study in the mobility sector confirmed that using the BMC for strategic management maintains a lasting competitive business advantage. Taken together, these findings show that a dynamic, user-centric process for business model design and change sustains dynamic consistency between the business model’s core elements. This indicates that the internal configurational fit of the business model is in line with its external dynamics.