Business Model Innovation of Smes: Three Cases from Colombia
Migration Paths in Business Model Innovation of Small Enterprises: Three Cases from Colombia
Jaime A. Barragán,
School of Management, Zhejiang University, Hangzhou, Zhejiang, People´s Republic of China e-mail: jaime@brightep.com, jaimeabm@hotmail.com
Abstract
Business model innovation is still a subject of debate. Moreover referring to Small and Medium Enterprises (SMEs) from developing countries, where research is scarce despite the general acknowledgment of them as natural innovators. Current literature provides definitions and concepts, however time is briefly discussed and authors seldom build on each other. This study integrates previous developments into a single tool that helps three Colombian small enterprises to elaborate a blueprint of their business model, pointing out past, current and future innovative aspects. In turn, managers identify the innovation mode they have engaged in at various points in time. Consequently, results reveal a Business Model Migration Path (BMMP) along different components of the business model, and a Mode Migration Path (MdMP) pertaining resultant innovation modes, both with particular cyclic behaviors that open further research issues. In sum the study evidences the relation between a dynamic business model innovation and a small firm's sustained value appropriation and eventual success. Overall, it delivers an additional instrument to periodically review the company's business model, seeking for innovation opportunities, and anticipating possible consequences.
Introduction
In recent years studies have concluded that the success of a company not only resides on an efficient process or an attractive product design, but also on an effective business model that generates profitable returns. (Lin, Ke, and Whinston, 2008). Withal, there is no widely accepted definition of what “business model” really means (Casadesus-Massanell & Ricart, 2007); yet, companies can only survive by continuously
Jaime A. Barragán,
School of Management, Zhejiang University, Hangzhou, Zhejiang, People´s Republic of China e-mail: jaime@brightep.com, jaimeabm@hotmail.com
Abstract
Business model innovation is still a subject of debate. Moreover referring to Small and Medium Enterprises (SMEs) from developing countries, where research is scarce despite the general acknowledgment of them as natural innovators. Current literature provides definitions and concepts, however time is briefly discussed and authors seldom build on each other. This study integrates previous developments into a single tool that helps three Colombian small enterprises to elaborate a blueprint of their business model, pointing out past, current and future innovative aspects. In turn, managers identify the innovation mode they have engaged in at various points in time. Consequently, results reveal a Business Model Migration Path (BMMP) along different components of the business model, and a Mode Migration Path (MdMP) pertaining resultant innovation modes, both with particular cyclic behaviors that open further research issues. In sum the study evidences the relation between a dynamic business model innovation and a small firm's sustained value appropriation and eventual success. Overall, it delivers an additional instrument to periodically review the company's business model, seeking for innovation opportunities, and anticipating possible consequences.
Introduction
In recent years studies have concluded that the success of a company not only resides on an efficient process or an attractive product design, but also on an effective business model that generates profitable returns. (Lin, Ke, and Whinston, 2008). Withal, there is no widely accepted definition of what “business model” really means (Casadesus-Massanell & Ricart, 2007); yet, companies can only survive by continuously