Innovative Value Propositions Research Articles

How do small-to-medium-sized e-commerce businesses stay competitive? Evidence on the critical roles of IT capability, innovation and multihoming

PurposeSmall-to-medium-sized enterprises (SMEs) in e-commerce often invest in information technology (IT) to stay competitive. However, whether and how IT capability (ITC) translates into financial performance requires further research. This paper examines the role of ITC in enabling value proposition innovation (VPI) as an important mechanism that improves financial performance for Chinese e-commerce SMEs during the COVID-19 pandemic. We argue that ITC is critical for enabling innovation because it elevates SMEs’ understanding of changing customer needs, especially when SMEs operate on multiple e-commerce platforms (multihome).Design/methodology/approachWe used partial least squares structural equation modeling (PLS-SEM) and tested the hypotheses that ITC mediated by VPI and moderated by multihoming increases the financial performance of e-commerce SMEs through a survey among 206 Chinese SMEs operating on Taobao.FindingsWe find that not only higher levels of ITC lead to better financial performance, but also that the effect is fully mediated by VPI. Moreover, the effect of ITC on innovation is enhanced when vendors operate on multiple platforms.Originality/valueThe study identifies VPI as an important mechanism through which SMEs can leverage their ITC to adapt, innovate and thrive in competition. Our work suggests that using technology to develop innovative ideas and identify opportunities (which are reflected in VPI) is key to success and that doing so is more likely when vendors multihome. Thus, this study contributes to the innovation literature by explicating a concrete link between ITC, multihoming, VPI and increased financial performance. Different e-commerce stakeholders, including SME owners, IT and service providers and e-commerce platforms, can benefit from the findings of this work.

Rich alone or rich together: the impact of value proposition innovation on the product–place co-branding value

Purpose This study aims to examine an emerging product–place co-branding marketing practice in China’s rural areas. The role of this practice in inclusive development is analyzed from the perspectives of value proposition innovation, market legitimacy, media coverage and brand value. Both research and practice indicate value proposition innovation to exert an important influence on brand value enhancement, but little is known about the mediating and moderating mechanisms underlying this relation. Design/methodology/approach A moderated mediation model is constructed to examine whether market legitimacy mediates the relationship between value proposition innovation and brand value. vWhether this mediating process is moderated by media coverage is also examined. The primary data are collected from semi-structured interviews and observations conducted with two common cases to develop proper scales for value proposition innovation and market legitimacy. The research includes 100 product–place co-brandings published by the Ministry of Agriculture and Rural Affairs in 2019. Hypotheses are tested using hierarchical regression and a Bootstrap model. Findings Value proposition innovation has a positive effect on brand value, and market legitimacy partially mediates this relationship. Media coverage positively moderates the relationship between value proposition innovation and market legitimacy, and positively moderates the mediating effect of market legitimacy; the higher the media coverage, the stronger the mediating effect of market legitimacy. Research limitations/implications Based on data availability and accessibility, the study sample focused on indicators from 100 brands in 2019. If the Ministry of Agriculture and Rural Affairs discloses consecutive annual information for other years, future studies could explore panel data to further test the study’s conclusions from a longitudinal perspective. Originality/value First, this paper adds to the emerging literature on product–place co-branding business models by examining the relationship between value proposition innovation and brand value. Second, this paper enriches institutional theory by including market legitimacy as a mediator between value proposition innovation and brand value. Third, this paper identifies the moderating role of media coverage, thus broadening the theoretical implications of institutional theory with respect to improving market legitimacy.

Google and Jio: Tapping Growth Opportunities Through Strategic Alliance

Alliances are cooperative business relationships in which two or more entities collaborate to achieve a common objective while maintaining their individual independence. An example of such an alliance is the partnership between Google and Reliance Jio Infocom Ltd. This strategic alliance was formed to address the prevailing market challenges and capitalize on the growth opportunities in the Indian smartphone market. Within this case, we delve into the strategic objectives that motivated Google and Jio to embark on this alliance, explore the growth strategies employed by both partners and assess the advantages gained from this partnership. Readers of this case study will gain insights into the significance of value creation and learn how markets can be shaped through innovative value propositions. Additionally, readers will be equipped to apply the VRIO framework, enabling them to evaluate how each strategic partner benefits from the addition of resources and capabilities, as well as to comprehend the critical success factors inherent in strategic alliances.

The Impact of Technology and Change Management on Value Proposition Innovation: An Iranian Study

The Impact of Technology and Change Management on Value Proposition Innovation: An Iranian Study

Enacting disruption: how entrepreneurial ventures innovate value propositions to increase the attractiveness of their technologies

PurposeEntrepreneurial ventures aspiring to disrupt existing market incumbents often use business-model innovation to increase the attractiveness of their offerings. A value proposition is the central element of a business model, and is critical for this purpose. However, how entrepreneurial ventures modify their value propositions to increase the attractiveness of their comparatively inferior offerings is not well understood. The purpose of this paper is to analyze the value proposition innovation (VPI) of aspiring disruptors.Design/methodology/approachThe authors used a flexible pattern matching approach to ground the inductive findings in extant theory. The authors conducted 21 semi-structured interviews with managers from startups in the global electric vehicle industry.FindingsThe authors developed a framework, showing two factors, determinants and tactics, that play a key role in VPI connected by a continuous feedback loop. Directed by the determinants of cognitive antecedents, development drivers and realization capabilities, aspiring disruptors determine the scope, focus and priorities of various configuration and support tactics to enable and secure the success of their value proposition.Originality/valueThe authors contribute to theory by showing how cognitive antecedents, development drivers and capabilities determine VPI tactics to disrupt existing market incumbents, furthering the understanding of configuration tactics. The results have important implications for disruptive innovation theory, and entrepreneurship research and practice, as they offer an explanatory framework to analyze strategies of aspiring disruptors who increase the attractiveness of sustainable technologies, thereby accelerating their diffusion.

Innovative value propositions in the fashion metaverse

ABSTRACT At the present time, fashion companies experiment with the metaverse in pursuit of innovative value propositions (IVPs) to offer to customers, and this paper addresses that phenomenon. The metaverse is a “phygital” space that rests on a range of different technologies, leveraging the benefits they generate and enhancing their potential applications. We carried out an exploration of 17 cases across the fashion industry by deploying a “metaverse ethnography” to utilise thick data (qualitative information such as observations, feelings, and reactions) which offers contextual and qualitative insights. Our main contribution consists of a framework that has identified the metaverse as an enabler of IVPs. We address three main activities that fashion companies carry out to leverage the potential of the metaverse: crafting resources, designing contexts, and enabling experiences. Within these activities, fashion companies offer new value promises to customers and activate new strategic levers; both of these result in IVPs. We highlight implications for scholars, practitioners and for further research.

Using Nostalgic Emotions to Revive Indian Ethnic Drinks Market: Competitive Strategy at Paper Boat

Amidst the intensive cola war in the Indian market, Hector Beverages Private Limited introduced ethnic drink as a competitive strategy to attract Indian consumers. This move aims to attract Indian consumers by not only offering health benefits and nutritional value but also providing a sense of connection to the past and emotional satisfaction through old memories. Paper Boat, an ethnic and nostalgic beverage brand of Hector Beverages, has disrupted the Indian beverage industry, challenging market leaders to provide innovative and nutritional drinks. The case study highlights Paper Boat’s innovative value proposition and nostalgia marketing campaigns, while also examining the competitive strategies of major players in the Indian beverage industry. The case study also raises important questions that Hector Beverages must consider remaining relevant in a changing market and retaining its competitive advantage.

Model based in Crowdfunding and institutional accompaniment for the timely graduation in undergraduate students.

The timely graduation of undergraduate students is a topic of special interest for higher education institutions, especially because it is an item that is used to evaluate their quality. Although the institutions have streamlined their processes and developed alternatives to achieve this timely graduation, along the way they have identified a group of factors, which affect the achievement of this objective. Through the present research, factors were analyzed, specifically to establish which of them affect the students of one university aim of study, compiling the required information from the application of qualitative techniques to the different actors related to this process, also making a detailed analysis of investigations previously known. Results demonstrated that the factors with the greatest impact are economic and institutional; based on this, an innovative value proposition was developed from the Business Model Canvas tool that allowed the creation of a model aimed at the two factors for the timely graduation of undergraduate students, focused on Crowdfunding and institutional accompaniment.

INNOVATIVENESS AND COMPETITIVE ADVANTAGE OF SMALL AND MEDIUM-SIZE ENTERPRISES IN KOGI STATE, NIGERIA

This study focused on link innovativeness and Competitive Advantage (CA) of Small and Medium-size Enterprise (SMEs). The study examined the effect of Value Capture Innovation (VCI) on the CA, as well as the effect of VPI on the CA of SMEs in Kogi State. The survey research design was adopted. 255 SMEs were surveyed, but 219 owners/managers eventually became active participants. Multi-stage random sampling technique was adopted. The reliability results showed VCI (α=0.917); and VPI (α=0.776). Multiple Regression analysis was used for testing hypotheses. Descriptive statistics aggregated and characterized the data in a straightforward and clear manner. Finding showed that VCI has significant effect on the CA of SMEs in Kogi State, and that (Value Proposition Innovation (VPI) has significant effect on CA of SMEs. The study concluded that SMEs need to possess innovation capabilities so as to enhance reasonable position in the competitive business environment. The study recommended that SME owners should increase their commitment to VCI so as to achieve sustainable CA for their enterprises, and that SME owners should invest in VPI to create effective medium route towards the achievement of sustainable CA of their enterprises. Key words: innovative activity, competitive advantage, value capture innovation, value proposition innovation, new customer relationships

Ecosystem leadership as a dynamic capability

We analyze the role and effect of ecosystem leadership understood as the exercise of effort towards others with the purpose of establishing and maintaining an ecosystem around a focal systemic innovation. While there has been much attention to the firms that sponsor ecosystems in the ecosystem literature, ecosystem leaders are usually characterized in an atheoretical manner, and the emphasis is on, leadership in existing ecosystems, thus neglecting the role leadership might play in ecosystem emergence. We clarify and provide theoretical grounding for the important role of leadership in emerging and maturing ecosystems. Building on transaction cost economics, we conceptualize an ecosystem as a governance structure that enables and sustains coordination and cooperation among multiple economic agents towards a focal innovative value proposition. Our basic argument is that the emergence of such an ecosystems is hampered by coordination and cooperation problems which markets and the price system cannot solve by itself. Resolving these problems requires assistance, and such assistance is what we call ecosystem leadership. To further characterize the exercise of leadership we use Teece's tripartite dynamic capabilities scheme. Leadership enables ecosystem emergence through three externally-oriented dynamic capabilities: facilitating the formation of a shared vision (sensing), inducing others to make ecosystem-specific investments (seizing) and engaging in ad hoc problem solving to create and maintain stability (reconfiguring/transforming). The latter capability in particular often continues to be important in a mature ecosystem. We provide a characterization of these capabilities and argue that the ecosystem leader role in a mature ecosystem likely stems from having successfully exercised these capabilities and that their exercise also puts the leader in a prime position for value capture. We discuss implications of our arguments for ecosystem theories, for managers and for policy makers.

Inside the black box: How business model innovation contributes to digital start-up performance

Business model innovation is critical to firm survival and success. Digital revolution has reshaped value-creation methods in recent years, spawning various novel business models. However, we still have limited understanding of how a start-up's business model innovation efforts translate into superior performance in the digital economy. Drawing on insights from the demand-side perspective, this study disassembles the business model innovation architecture into three elements—value proposition, value creation, and value capture innovation—and investigates how business model innovation contributes to digital start-up performance. Based on a survey of Chinese digital start-ups, we find that value proposition innovation is positively related to digital start-up performance. Moreover, this relationship is mediated by value creation and value capture innovation. This study contributes to business model research by examining the impact mechanism of business model innovation on firm performance and providing new insights into the demand-side perspective of business model innovation.

Is Digital Business Model Innovation the Silver Bullet for SMEs Competitiveness in Digital Era? Evidence from a Developing Nation

Digital business model innovation (DBMI) is often claimed to be a ‘game changer’ for SMEs in Malaysia. Small and medium-sized enterprises (SMEs) can use digital technology to coordinate business activities and create and deliver differentiated value to customers in both domestic and global markets. The literature on DBMI is sparse in the SME context. Therefore, semi-structured interviews were conducted with eight SME top managers to investigate how SMEs in manufacturing and service sector can implement DBMI (value creation innovation, value proposition innovation, value delivery innovation, value capture innovation); the challenges encountered in the DBMI adoption process and how they can be resolved; and perceptions of DBMI (whether as a ‘storm’ or ‘silver bullet’ for SMEs competitiveness). The findings highlight that DBMI is perceived as a ‘silver bullet’ for SMEs that will allow them to improve competitiveness and sustainability in the digital age. This study contributes insights and valuable information to researchers, academics, SMEs, entrepreneurs (managers) and policy makers.

DIGITAL BUSINESS MODEL INNOVATION IN SMEs: THE ROLES OF ENTREPRENEURIAL LEADERSHIP AND GOVERNMENT SUPPORT

Digital business model innovation (DBMI) is a new business model domain which is increasingly attracting interest in an attempt to resolve challenges to digital transformation. It is known as a crucial research field of business model. However, the empirical studies on SMEs focusing on digital business model innovation in a developing country are relatively scant. Previous studies have concentrated mostly on any two or three elements of DBMI. Thus, this research attempts to bridge the knowledge gap by focusing on all elements of DBMI to reveal valuable insights. Grounded in upper echelon and institutional theories, this study investigates the relationship between entrepreneurial leadership, government support with digital business model innovation (DBMI). Preliminary interviews were conducted with four members of top management from different SMEs in Malaysia to determine whether the literature and anecdotal evidence can reflect real-life business circumstances. The empirical data were collected from 132 Malaysian small and medium-sized enterprises (SMEs) using the purposive sampling technique. As predicted, the empirical findings show that entrepreneurial leadership and government support positively affect DBMI (value creation innovation, value proposition innovation, value delivery innovation, and value capture innovation). This research is novel as it the first study unravelling the pivotal role of entrepreneurial leadership and government support in promoting DBMI adoption to achieve superior performance in the digital sphere. It bridges the literature gaps on the driving factors of DBMI adoption. Present study contributes to the DBMI literature with the empirical evidence from SMEs. This study would complement prior findings on the role of entrepreneurial leadership and government support in business model innovation, e-business and e-commerce. The findings of the present study have various implications for SMEs and practitioners that plan to adopt DBMI in various industries. This model can be incorporated as a strategy by SMEs in both developing and developed countries to increase their competitiveness. Future studies could examine other factors that may contribute to DBMI and its associated outcomes in other contexts.

Multimedia Prototyping for Early-Stage Startups Endurance: Stage for New Normal?

Multimedia prototypes of varying degrees of fidelity and interactivity could be a powerful tool for early stage startups to validate their business model assumptions especially product value proposition. This grounds on the prototype's ability to enhance user experience (UX) thereby making their feedback more accurate and reliable. This article reports practical experiences with consultancy projects involving European early stage startups focusing on the cocreation process of value proposition innovation amid pandemic. This includes the challenges faced in interacting with onsite customers, multimedia prototyping as a tool to foster remote customer involvement, and different challenges involved in prototype-driven cocreation like intellectual property rights, federal laws, motivation rewards, tool selection, and balancing customer expectations. The involvement of remote customers is fostered by the combination of varying degrees of fidelity and interactivity. Higher fidelity and interactivity prototypes are more applicable when a startup has a continuously increasing customer base, better market understanding, and customers having better product understanding. The practical experience indicates that resource-constrained startups could be greatly benefitted from the adoption of multimedia prototyping in their market research. The multimedia prototype development technologies could be easily adopted in startup business practices owing to zero purchase cost, ease of use, and usefulness. Their adoption is expected to become a norm for the “new normal” as the role of multimedia prototypes is trivial for lean startups enhancing the value of design thinking as well as customer development processes. However, there is an urgent need to define a systematic process for the selection of prototype development tools meeting the business needs and their seamless integration in startup business practices, thereby leveraging across the wider spectrum of prototyping tools market.

Online Feedback Management Tools for Early-Stage Startups: Hidden Treasures in the Rocky Mountains

The microenterprises called Startups perform series of interactions with potential customers using prototypes to validate the business model related assumptions, especially value proposition. Value proposition refers to the value the product is going to offer to the customers by providing them benefits and addressing their difficulties in getting their tasks done. The importance of value proposition innovation is evident from the fact that most of the software Startups fail due to their inability to reach product/market fit, i.e., building the product for which there is no market demand; attributable to requirement engineering related issues.1 The product value innovation is a tool to sustain competitive advantage; the task for which the involvement of customers is of utmost importance throughout the product lifecycle to get continuous product related feedback.2,3

"The Flow in the Funnel": Modeling Organizational and Individual Decision-Making for Designing Financial AI-Based Systems.

Nowadays, the current application of artificial intelligence (AI) to financial context is opening a new field of study, named financial intelligence, in which the implementation of AI-based solutions as “financial brain” aims at assisting in complex decision-making (DM) processes as wealth and risk management, financial security, financial consulting, and blockchain. For venture capitalist organizations (VCOs), this aspect becomes even more critical, since different actors (shareholders, bondholders, management, suppliers, customers) with different DM behaviors are involved. One last layer of complexity is the potential variation of behaviors performed by managers even in presence of fixed organizational goals. The aim of this study is twofold: a general analysis of the debate on implementing AI in DM processes is introduced, and a proposal for modeling financial AI-based services is presented. A set of qualitative methods based on the application of cultural psychology is presented for modeling financial DM processes of all actors involved in the process, machines as well as individuals and organizations. The integration of some design thinking techniques with strategic organizational counseling supports the modeling of a hierarchy of selective criteria of fund-seekers and the creation of an innovative value proposition accordingly with goals of VCOs to be represented and supported in AI-based systems. Implications suggest that human/AI integration in the field can be implemented by developing systems where AI can be conceived in two distinct functions: (a) automation: treating Big Data from the market defined by management of VCO; and (b) support: creating alert systems that are coherent with ordered weighted decisional criteria of VCO.

The effect of Relationship Network and Business Model Innovation on Start-up Performance in Vietnam

Aims: It aims to build and verify the theoretical model among the network of relationships, business model innovation and start-up performance of start-up companies.
 Methodology: The study employed qualitative and quantitative methods of research in 550 start-up firms in Vietnam. The qualitative method is utilised to adjust and complement the scale (interviews with experts). Utilising the PLS-SEM analysis method with the SmartPLS support tool, the quantitative method is used to assess reliability, permissibility, model testing, and research hypotheses.
 Results: Start-up firms' relationship network (with government officials, social contacts, and business partners) has a beneficial effect on their performance. Relations with government officials benefit value creation, value proposition, and value capture innovation. Social relationships have a positive impact on value proposition innovation. Relationships with business partners contribute to the creation of value and the innovation of new products and services. Business model innovation can have a sizable impact on the performance of a start-up. Finally, environmental dynamism has no regulatory effect on the innovation of business models or the performance of start-up firms.
 Conclusion: This study has filled theoretical gaps by confirming the results of prior studies that had questioned the connection between the network of relationships, business model innovation, and start-up performance. The findings propose management solutions for start-ups' owners and senior managers, policymakers, and official government entities.

The Fit Between Value Proposition Innovation and Technological Innovation in the Digital Environment: Implications for the Performance of Startups

In recent years, an emerging stream of research suggests that firms should use technological innovation and business model innovation harmoniously to maximize firm performance. In order to enrich the scholarly conversation on the fit between technological innovation and business model innovation, drawing insights from the dynamic capabilities perspective, this paper examines the fit between value proposition innovation and technological innovation (exploitative versus explorative) for the performance of startups in the digital environment. Based on on-site survey data of 285 digital startups in one of the world's largest digital economies, we find that explorative innovation strengthens the positive impact of value proposition innovation on the performance of startups, whereas exploitative innovation weakens this positive effect. Furthermore, these moderating effects are magnified in a highly uncertain demand environment. These findings inject fresh insights into existing scholarly conversation on the fit between technological innovation and business model innovation by offering a dynamic capabilities perspective and by extending it to an increasingly digital business environment.

Business model innovation and digital transformation in global management consulting firms

Purpose This paper contains an exploratory analysis of the business model innovations (BMIs) that management consulting firms (MCFs) undertake to remain competitive during digital transformation. Design/methodology/approach This paper uses data from a longitudinal multiple case study of the European practices of major global MCFs to provide an overview of how they reconfigure their business model (BM) to gain competitive advantages. It maps BMIs in MCFs through value creation innovation, value proposition innovation and value capturing innovation. Findings There is a shift in value proposition from solely giving advice or supporting information technology (IT) implementation to providing end-to-end digital solutions. To materialize value propositions, MCFs acquire new knowledge and digital assets through talent scouting, and mergers and acquisitions (MA thus, they focus on expanding, creating their ecosystems and adopting platforms' configuration and characteristics. Research limitations/implications Inductively, the authors reached an analytical generalization through six propositions and a theoretical frame that embeds propositions in the previous literature. Future research should test them across the overall management consulting industry. Practical implications MCFs are recognized as drivers of innovation and BMIs in most client firms. However, MCFs are rarely analyzed with respect to their BMIs. Understanding how MCFs innovate their business models (BMs) to provide digital transformation (DT) consulting services is relevant for delivering management innovation across industries. Originality/value This is the first exploratory study on BMI inside global MCFs during DT.

Fostering Continuous Value Proposition Innovation through Freelancer Involvement in Software Startups: Insights from Multiple Case Studies

[Context] The software startups could continuously innovate business model value proposition by involving freelancers as a source of innovative ideas (that enhance customer perceived value) and as experts for implementing the innovative ideas (by undertaking software engineering tasks). Startups employ one of three strategies for associating with freelancers i.e., task based (association ends with completion of the outsourced task), panel based (outsourcing task to a panel of freelancers associated with startup), or hybrid. Uncertainties, terminology issues, high technical debt, lack of documentation, lack of systematic decision making processes, lack of resources, lack of brand values, need for the continuous involvement of the freelancer to incorporate continuous validated learnings, merging freelancer perspectives, and deciding the level of their involvement in individual requirement engineering (or value proposition innovation) activities, are the main inhibitors for associations with freelancers. The availability of good freelancers and their long term and continuous commitments are necessary requirements for value proposition innovation. The theory about freelancer association with the software startups is extended by studying the real practices of startups, which successfully involved freelancers for value proposition innovation by capturing innovative ideas and acquiring the freelancer’s skills to implement those ideas. [Objectives] The objective of this paper is to explain the strategies adopted by the software startups to foster value proposition innovation by continuously involving the freelancers and the way they overcome the challenges arising because of the associations. The findings are driven by the study of real practices of startups that proved to be successful in the market by involving freelancers and continuous innovations leading to increased market shares. [Method] This paper performs empirical studies through case studies of three software startups located in Italy, France, and India, which are at the verge of being transforming into big companies, with large market share. The current practices highlighting the successful way of executing freelancing association strategies for value proposition innovation and the way to overcome the arising challenges are reported. The findings are also compared with those of two young startups based in Switzerland and India, to bring useful lessons for the young startups. The case study results are validated by employees from the studied startups (both those who participated in data collection and those who did not). [Results] The results indicate that freelancer involvement during value proposition activities, which is the core business operation, is beneficial to the both freelancers and the startups. Startup teams could reduce the development costs, shorten time to market, and increase customer satisfaction (by providing features addressing real market needs) by correctly involving the freelancers uniformly across value proposition activities. The startups could manage innovation with small teams (compared to human resources in companies) if done jointly with the freelancers, that helps the team members to learn new skills, upgrade their skills, and learn new perspectives about their markets. Business impacts due to freelancer involvement are stronger if the level of freelancer involvement across various value proposition activities is higher compared to their involvement across few activities only. The studied startups are not completely dependent on the freelancers but the freelancer’s perspectives and skills are valued as a rich source of market success. Freelancer involvement is taken as an opportunity to gain access to global market perspectives, which otherwise would be effortful for in-house teams to collect. In addition, they resolve technical debt, are a source of upgrading skills for undertaking future innovation, and help reaching customers for marketing (promoting product and gaining access to the feedbacks). Overall, the value proposition innovation in the studied startups have different levels of involvement of the freelancers but these startups have reported positive impacts on the business in terms of development cost reductions, shorten time to market, and high customer satisfaction (measured on early attainment of product/market fit and fast growth thereafter). The case study results are validated by the startup employees (member checking). The responses collected are analysed using box plots, which shows a higher level of result agreements among the employees.