Outside-in thinking, value chain collaboration and business model innovation in manufacturing firms

Abstract

PurposeThis paper aims to explore how manufacturing firms pursue business model innovation (BMI) through their use of outside-in thinking.Design/methodology/approachSurvey data were collected on 175 Chinese manufacturing firms. A regression model was used to verify the research results.FindingsManufacturing firms rely on outside-in thinking to develop BMI under different market and institutional environments. From a whole-value-chain perspective, interacting with customers and sharing information with suppliers are two key ways to develop BMI.Research limitations/implicationsFirms focus on customer needs, sense the dynamics of external markets and technology and seize market opportunities to measure outside-in thinking. Empirical results suggest using other measures of outside-in thinking. BMI itself can be multidimensional, so scholars could consider BMI’s diverse dimensions and measurements, which may demand different kinds of outside-in thinking.Practical implicationsManufacturing firms can use outside-in thinking to overcome inertia and rigidity and increase their knowledge, information and technology. Managers should develop outside-in thinking to respond quickly to emerging economies. Managers should use value chain collaboration and improve the firm’s capacity to interact with customers and suppliers to apply the benefits of outside-in thinking to their BMI.Originality/valueThe study explores how outside-in thinking is a key driver of BMI. Applying the whole-value-chain view, it finds that interacting with customers and suppliers connects outside-in thinking with BMI. It also highlights the effects of intense market competition and volatile government regulation on BMI.