Business Model Adaptation Research Articles

Effective business model adaptations in family SMEs in response to the COVID-19 crisis

PurposeThe present paper aims at exploring effective business model adaptations in response to unexpected events such as the COVID-19 pandemic.Design/methodology/approachThe authors test the effect of two major business model adaptations, namely changes in the value proposition and changes in the target market, on a sample of 96 family SMEs.FindingsResults show that only changes in the value proposition had a positive and significant impact on performance, helping family SMEs to better confront COVID-19. However, this effect is reduced in the case of target market change.Originality/valueTo the best of the authors’ knowledge, this is the first study to investigate how business model adaptations in family SMEs affect performance in crisis situations.

Using Business Analytics for SME Business Model Transformation under Pandemic Time Pressure

The COVID-19 pandemic has had an unprecedented impact on many industry sectors, forcing many companies and particularly Small Medium Enterprises (SMEs) to fundamentally change their business models under extreme time pressure. While there are claims that technologies such as analytics can help such rapid transitions, little empirical research exists that shows if or how Business Analytics (BA) supports the adaptation or innovation of SMEs’ business models, let alone within the context of extreme time pressure and turbulence. This study addresses this gap through an exemplar case, where the SME actively used location-based business analytics for rapid business model adaptation and innovation during the Covid-19 crisis. The paper contributes to existing theory by providing a set of propositions, an agenda for future research and a guide for SMEs to assess and implement their own use of analytics for business model transformation.

Business Model Adaptation to the COVID-19 Crisis: Strategic Response of the Spanish Cultural and Creative Firms

Surviving in a humanitarian disaster such as the COVID-19 pandemic is a big challenge for micro, small, and medium-sized enterprises in all industries. Furthermore, cultural and creative firms face additional challenges. Many of those firms have survived the effects of the pandemic by proposing redesigned business models that have brought new added value in response to environmental hostility; they have strategically responded to the crises by adapting their business model. According to the extant literature, in VUCA (volatile, uncertain, complex and ambiguous) environments, dynamic capabilities are developed to detect and seize new opportunities and reconfigure the company’s assets. However, in very hostile environments, such as the COVID-19 crisis, the dynamic capabilities approach fails to explain the firm owners’ strategic decisions. A cross-case comparative analysis of ten micro and small firms in Spain’s cultural and creative industries has been conducted to examine how enterprises adapted to the COVID-19 crisis and the different organizational capabilities they implemented. This work proposes a new framework that postulates that business model adaptation is better understood under the emergency management theory and improvisational capability, instead of only under the dynamic capabilities lens. Organizational proximity in the diffusion of innovations under the open innovation paradigm is also critical to understanding the business model adaptation. From an academic perspective, this article enriches the current understanding of business model asdaptation by micro, small, and medium-sized enterprises in very hostile environments. The new framework intends to offer managers concrete guidelines about systematically adapting their business models in hostile situations.

The impact of strategic vision and balancing learning style on business model adaptation in the Egyptian private airlines

The impact of strategic vision and balancing learning style on business model adaptation in the Egyptian private airlines

The stakeholder value proposition of digital platforms in an urban ecosystem

Using a mixed-method approach, we assess the conditions under which digital platforms can successfully deliver their stakeholder value propositions (SVP)—declarative statements that the digital platform makes about how it adds value or solves a problem for target stakeholders—in cities. We examine the popular digital platform Airbnb in the touristic city of Barcelona and analyze the extent to which it delivers its value proposition to guests, hosts, and the city. Evidence suggests that Airbnb in Barcelona closely resembles the existing hotel industry, reinforcing over-tourism and inequality, which explains the adverse reactions Airbnb has faced from the city. We contrast this with the case of a nearby non-touristic city, Igualada, where the platform has delivered on its SVP. Our findings suggest that, while complex and gradual, the process of joint value creation between the digital platform and its stakeholders is possible and can be beneficial under conditions of mutual adjustment and business model adaptation. We uncover the substantive, localized, and dynamic characteristics of the SVP design process and discuss the academic, policymaking, and managerial implications of adequate platform design.

Start-ups' business model changes during the COVID-19 pandemic: Counteracting adversities and pursuing opportunities.

This article investigates how start-ups have been affected by, and have responded to, the COVID-19 pandemic by analysing interview data from 32 Australian start-ups during Australia’s second wave of COVID-19. A framework and visualisation were developed, capturing unexplored heterogeneity within these start-ups, depending whether the emphasis was upon opportunities or adversity, and the type and extent of business model changes. Six start-up types were identified: stable beneficiaries, business-as-usual continuers, digital adjusters, adversity survivors, opportunity graspers and lemonade makers. The findings suggest that most start-ups responded to the crisis through business model changes because of crisis-induced opportunities and crisis-induced adversity The anaysis found that the interplay between firm size and crisis influences whether start-ups focus on business model adaptation or business model innovation or a combination of both We thus contribute to the literature on business models, crisis management and a newly emerging field focusing on the implications of the COVID-19 pandemic for start-ups.

ТЕНДЕНЦІЇ БАНКІВСЬКОГО СЕКТОРУ УКРАЇНИ

The banking sector of Ukraine entered the crisis with a significant reserve of capital and liquidity, resistant to operational risks and effective, with action plans developed by the banks in case of adverse events. The macroprudential policy of the National Bank of Ukraine prepared the banking sector well for crisis phenomena. With the beginning of the full-scale war in Ukraine, the NBU introduced regulatory relaxations for banks in order to facilitate their effective work. The article analyzes the dynamics of the main monetary policy instrument of the National Bank of Ukraine – the discount rate. In June 2022, the NBU decided to increase the discount rate to 25% in order to ensure exchange rate stability and curb inflationary processes. This level of the discount rate will make it possible to support hryvnia incomes and savings of the population, and the attractiveness of hryvnia assets. The main trends in the development of the banking sector over the past few years and months of the intensification of military operations have been studied. Banks with a state share have the worst quality of loan portfolio, PJSC CB "Privatbank" is the unchanging leader, non-performing loans of this bank as of January 1, 2018 accounted for 87.64% of its loan portfolio and 39.7% of all non-performing loans in the banking sector. Banks managed to maintain their operating profitability at a high level, but the banking sector was unprofitable in the first months of the war, and the quality of the loan portfolio deteriorated. In these conditions, it is important that the National Bank of Ukraine responds promptly and flexibly to changes in market conditions, as well as strengthening financial monitoring of banks' activities. For banks, it is necessary to ensure timely preparation and submission of reports to the NBU, informing the regulator about the risks of violation of requirements for financial indicators; improvement of credit risk assessment approaches to commensurate them with the depth of the current crisis; improvement of cyber protection systems; adaptation of business models to current operating conditions.

Адаптация предпринимательства к национальной ESG-повестке

The concept of sustainable development of domestic entrepreneurship has a growing influence on the adjustment and change of adaptive business models. Today, ESG principles are the basis for ensuring the sustainable functioning of business structures, which occurs under the influence of setting and achieving the goals of companies' involvement in solving environmental, social and managerial problems. In the emerging context, we note the emergence and permanent strengthening of vector, regulatory and reputational effects on the activities and development of business structures. The subject of the research results presented in the article is the assessment of the impact on the adaptation of entrepreneurial structures of the implemented ESG approach as one of the key challenges in the activities of modern business. The methodological basis of the study is a consistent analysis of the impact of changing approaches on key aspects of small and medium-sized businesses, identifying qualitative and quantitative characteristics, assessing possible risks and benefits associated with the introduction of sustainable development principles by business entities. The result of the study is an assessment of the impact of the ESG approach on the adaptation of entrepreneurship to modern challenges, as well as on the financial performance of enterprises. As applied to small and medium-sized businesses, practical recommendations on adaptation risk management are proposed, which demonstrate the importance for the absolute majority of the company's activities. It is obvious that sustainable development makes it possible to improve modern models of adaptation of small and medium-sized businesses for the survival of people whose money is the goal of the economic agents of the system. If consumers do not buy the goods or services offered by the company, it means that the company cannot generate profit and, therefore, it is not viable.. Therefore, it is quite logical not only to build adaptive models for small and medium-sized businesses, but, equally important, to use new consumer motivation and a changing environment, social relations and corporate practices in the interests of business development. When a company's ESG activities are considered not so much as a way to neutralize risk, but also as a method of assessing and determining future opportunities, ESG becomes an area of increased attention and importance for institutional investors and creditors. The conclusions and recommendations made in the article may be significant for companies in various sectors of the economy if they are interested in improving the stability of their own financial situation and increasing the interest of investors in them.

Climate change risk: The next frontier in banking risk management

Extreme weather events are becoming more frequent, more intense and, to a certain extent, more predictable, according to global climate research. Over time, the effects of climate change could alter dramatically the environment upon which communities, societies and economic activity depend. Meanwhile, a correlating impact on firms, sectors and geographies could render traditional business models ineffective or obsolete. Rapid developments in environmental, social and governance (ESG) initiatives, and rising stakeholder demand for improved sustainability performance, will require banks to take a more integrated and strategic approach to climate risk management. This paper explores the practicalities of integrating climate-related risks into existing risk management frameworks, strategies and processes. It examines the key components and attributes of an effective climate-risk framework. And it elaborates on some of the unique characteristics and business model adaptations that are needed to incorporate climate-change considerations into decision-making processes, including capital allocation, loan approval, portfolio monitoring and reporting. In this way, business models can become more economically efficient and strategically resilient to climate risk and equipped to deliver long-term sustainability and value creation.

What Helps Early Recovery of Disaster-Affected Small Businesses: A Case Study of a Local Cooperative Affected by the 2011 Great East Japan Earthquake

The 2011 Great East Japan Earthquake impacted many business enterprises in the tsunami affected Tohoku region. While the number of disaster related bankruptcies has been increasing in the tsunami-affected areas since 2011, one small shopping district in Natori city, Miyagi, has managed to make an early recovery from the disaster. The Yuriage Port Morning Market (YPMM), which is operated by the Yuriage Port Morning Market Cooperative (YPMMC), managed to resume business operations in its original location just two years and two months after the disaster, and the YPMM now attracts more visitors than it did before the disaster. The present study was designed to explore factors that had helped the YPMMC bring the YPMM back on track after the disaster. Results derived from interview and questionnaire surveys revealed that new business model creation and adaptation, social capital, and leadership seemed to have played significant roles in the early recovery of the YPMM. Although these factors might not have been the only factors contributing to the YPMM’s early recovery, they should have made the difference between the YPMM and other shopping districts that had failed to resume its business operations after the disaster.

NEW BUSINESS MODELS GENERATED BY TECHNOLOGICAL INNOVATION

The evolution of technology has caused a revolution in almost every fragment of the entrepreneurial sector, especially in terms of adapting business models to innovation. The management of a business in a competitive market has become increasingly unpredictable. Leadership style has changed the way the business model is framed through modern strategic thinking or management. By applying new information technologies, businesses need to constantly reflect in order to redesign the business models they use. Business models under the pressure of time changes have changed the format of operation and approach, depending on the “innovation” factor. Today, companies around the world feel under direct pressure to operate in efficient solutions, designed to fully adapt to the various and comprehensive strategic business management activities. As a result of technological evolution, organizations find it easier to intervene in the markets, to increase their operating segments in the market, as well as to change the forms of the way the product is delivered to the customer. This has brought uncertainty in their managerial work but has also significantly facilitated the environment in which businesses operate. Even for many businesses technological development is the motto of their existence. Many companies themselves have been established on the basis of internet technology while from many others technological evolution is exploited to take advantage of another level in the market. The use of the software industry in business is considered a key factor of computerization due to the economic benefits, expressed in fast and intermediary transactions, cost reduction, revenue growth, competitive advantages, product diversity and saving of non-renewable resources. Studying the impact of technology and innovation on business models is essential to explore how companies innovate, need and should innovate the business model. The purpose of this paper is to advance research on the perspective offered by innovation in the business model. The aim is to emphasize the importance of technological development in the creation of digital businesses, hoping to inspire managers and entrepreneurs to compete in the market not only by applying the latest technology available, but also by creating their innovations to make their business more profitable and more sustainable. The novelty of this study corresponds to a general analysis of “modern business models”, in the way how business models in combination with technological evolution, mature and bring to the stage new business models, those provoked by technological trends.

Collaborative Prognostics for Machine Fleets Using a Novel Federated Baseline Learner


 
 
 Difficulty in obtaining enough run-to-fail datasets is a major barrier that impedes the widespread acceptance of Prognostic and Health Management (PHM) technology in many applications. Recent progress in federated learning demonstrates great potential to overcome such difficulty because it allows one to train PHM models based on distributed databases without direct data sharing. Therefore, this technology can overcome local data scarcity challenges by training the PHM model based on multi-party databases. To demonstrate the ability of federated learning to enhance the robustness and reliability of PHM models, this paper proposes a novel federated Gaussian Mixture Model (GMM) algorithm to build universal baseline models based on distributed databases. A systematic methodology to perform collaborative prognostics is further presented using the proposed federated GMM algorithm. The usefulness and performance are validated through a simulated dataset and the NASA Turbofan Engine Dataset. The proposed federated approach with parameter sharing is shown to perform at par with the traditional approach with data sharing. The proposed model further demonstrates improved robustness of predictions made collaboratively keeping the data private compared to local predictions. Federated collaborative learning can serve as a catalyst for the adaptation of business models based on the servitization of assets in the era of Industry 4.0. The methodology facilitates effective learning of asset health conditions for data-scarce organizations by collaborating with other organizations preserving data privacy. This is most suitable for a servitization model for Overall Equipment Manufacturers who sell to multiple organizations.
 
 

Business Model Adaptation of Small and Medium-Sized Information Technology Firms

Small and medium-sized information technology firms operating in high-velocity business environments have to continuously adapt their business models. Prior research on business model adaptation, however, remains under-developed. In this study, we address the gap by drawing on the dynamic capability perspective. Based on the qualitative data collected from 35 interviews with ten companies in China, we develop a processual model and unveil how these companies employ dynamic capabilities (i.e. sensing, seizing and transforming), complemented by ordinary capabilities, to enact, manage and implement business model adaptation. This study provides novel insights into a theoretical issue of business model adaptation for information technology firms and managerial implications while using an adaptive business model innovation strategy.

Business model adaptation as a strategic response to crises: navigating the COVID-19 pandemic

PurposeThis study aims to explore how hotels adapt their business models as a strategic response to crisis situations. It sheds light on the processes and methods of business model adaptation during severe crisis situations, such as the COVID-19 outbreak.Design/methodology/approachA single-case study was conducted. Data were collected from the owner/manager of a boutique hotel chain in Chiang Mai, Thailand through an extensive interviewing process. The authors also examined corporate documents. The authors then re-organized the material as a coherent narrative about how the company navigated the COVID-19 crisis.FindingsThe findings show that the hotels in the study adapted their business models by cutting costs through stopping non-essential operations, increasing non-room revenues and adding new revenue channels, bringing in cash from advance bookings, securing financial support from creditors, leveraging government support and training staff for the “new normal.”Originality/valueFew previous studies have focused on business model adaptation during the COVID-19 crisis. The investigation of this largely neglected area provides two main contributions. First, it extends the literature on crisis management in hospitality firms by examining business model adaptation patterns and processes during unprecedented crisis conditions. Second, it provides managerial insights and a business model adjustment framework to help practitioners in urban settings in their efforts toward recovery from the COVID crisis.

Sustainable energy systems in the making: A study on business model adaptation in incumbent utilities

Delivering a low-carbon future depends significantly on the decarbonization of the electricity industry. Increasingly, electric utilities have experienced pressure to redefine their business model amid the need to transition to a sustainable energy system. In this study, we focus on how utilities have changed their business model to adapt to the emergence of sustainable energy innovations in the energy system and which value creation drivers they draw on. By framing the business model as an activity system, we capture how utilities expand the boundaries of their business to integrate sustainable energy activities. We analyze 756 boundary-spanning transactions (mergers and acquisitions, joint ventures, and strategic alliances) of 20 European utilities from 1990 to 2019. We find that utilities pursued 20 distinct sustainable energy activities across renewable electricity generation, smart electricity management, emerging technologies, and sustainable mobility. Preference for renewable energy activities, particularly wind generation is observed. The combination of renewable electricity generation and smart electricity management indicates a focus on systems integration. We also find preference for integrating activities through mergers and acquisitions. Utilities focus on acquiring sustainable energy activities leading to a novel bundling of activities contributing to decarbonization while reinforcing the efficiency and lock-in of their traditional business model.

An integrated SWOT based fuzzy AHP and fuzzy MARCOS methodology for digital transformation strategy analysis in airline industry

Driven by business strategies, digital transformation (DT) facilitates dramatic change in air passenger behavior. This study aims to determine and analyze different DT strategies (DTSs) with the help of an integrated SWOT-based fuzzy AHP-MARCOS methodology that is proposed for the first time in the literature for this purpose. This methodology is validated with a case study concerning the airline industry in Turkey. The weights of the SWOT factors are determined with the fuzzy AHP method. The fuzzy MARCOS approach is used to select the most suitable DTS. The most appropriate strategy is obtained as “focusing on differentiated digital customer experience and service quality by the adaptation of business models to DT to provide benefits”.

A roadmap for business model adaptation in the construction industry: a structured review of business model research

PurposeSurvival challenges compel construction firms to change their business thinking on adapting business models (BMs). Unlike in the other fields, in the construction field, it is still a novel concept, probably because BM adaptation in the industry has not been sufficiently studied. Hence, the purpose of this study is to set a roadmap for the effective adaptation of the BM concept in the construction industry.Design/methodology/approachTo develop a roadmap, this study analysed BM literature through a comprehensive literature review by finding the BM research development stages using studies done in other fields and locating construction industry BM literature.FindingsNo stage-wise development of BM research has taken place in the construction industry. The four BM research development stages, namely, defining BMs, listing BM components, describing BM components and modelling BM components as a business model ontology (BMO) in relation to the construction industry have to be followed for proper BM adaptation in the construction industry.Originality/valueThis study provided an overview of and a roadmap for BM adaptation in the construction industry for the benefit of future researchers. The proper adaptation of the BM concept through a BMO will enable construction business managers to easily innovate, design and change construction BMs to streamline their business thinking.

Business Model Adaptation of Small and Medium-Sized Information Technology Firms

Small and medium-sized information technology firms operating in high-velocity business environments have to continuously adapt their business models. Prior research on business model adaptation, however, remains under-developed. In this study, we address the gap by drawing on the dynamic capability perspective. Based on the qualitative data collected from 35 interviews with ten companies in China, we develop a processual model and unveil how these companies employ dynamic capabilities (i.e. sensing, seizing and transforming), complemented by ordinary capabilities, to enact, manage and implement business model adaptation. This study provides novel insights into a theoretical issue of business model adaptation for information technology firms and managerial implications while using an adaptive business model innovation strategy.

ЦИФРОВЫЕ ИНСТРУМЕНТЫ АДАПТАЦИИ ДЕЯТЕЛЬНОСТИ ПРОМЫШЛЕННЫХ ОРГАНИЗАЦИЙ

The article is devoted to substantiating the benefits of digitalization for the adaptability of industrial enterprises, studying the current level of development of digital and intelligent systems in order to determine the starting positions for correcting or creating new adaptive business models, to ensure the optimal amount of infusions, developing a strategy for the development of digital. The purpose was to describe how digitalization tools will serve adaptation and to provide an overview of how profitable digital tools are integrated into existing information systems by functional blocks, and what benefits organizations receive from this. The main criteria for assessing the level of development and readiness of an organization for digital transformation and four basic levels that determine the need and scale of transformations in order to improve the adaptive characteristics of the production system are highlighted. The organizational and economic mechanism of adaptation of the production system functioning is proposed, which ensures the activation of the adaptive search for a model for changing the behavior of an industrial organization.

REGIONAL MANAGEMENT OF BUSINESS PROCESSES IN THE CONDITIONS OF DECENTRALIZATION OF POWER IN UKRAINE

Introduction. Territorial competitiveness management is currently recognized as one of the main factors in the competitive development of the national economy. The problems of ensuring the competitiveness of territories become especially relevant in the context of decentralization, the main purpose of which is to create effective, functional and financially self-sustaining territorial communities capable of ensuring a decent standard of living. Each territory has its own competitive advantages, which, provided the application of effective management mechanisms will help increase the competitiveness of the business located in these areas. The aim of the article is the process of regional management of business processes in the context of decentralization of power in Ukraine. Results. In the context of decentralization, the main goal and, at the same time, an important applied problem of regional development is the search for the most optimal business-oriented models of economic development of regions (territories) and tools to ensure their viability. The experience of developed economies shows that at the initial stage of formation (modernization, adaptation) of a competitive business model of territorial development an important task is to find key "growth points" and stimulate their development to ensure economic and social stability of regional systems in the medium term. basic conditions for a gradual transition to innovation-oriented competitive systems. Conclusions. In order to improve regional strategies and optimize business models for the development of regions and individual administrative-territorial entities, a model for assessing the region's sectoral priorities in the medium term is proposed, based on assessing the economic and social potential of industries or individual economic activities. territories, strategic priorities of business development and corresponding strategies of their support. Keywords: business processes, business, national features, regional features, regional management.