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

Abstract

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.

Resilience in Family Businesses: A Systematic Literature Review

“…Many studies in our review measured resilience as an outcome (e.g., Acquaah et al, 2011; Bürgel et al, 2023) and operationalized it as financial performance (typically compared to non-family businesses) (e.g., Brunelli et al, 2023; Minichilli et al, 2016). Only a few studies looked at other resilience outcomes, such as innovation, survival, and longevity (e.g., Crespo et al, 2023; Randolph, Memili, et al, 2022; Stafford et al, 2010, 2013).…”

“…This long-term orientation is substantiated by various theoretical foundations that explain family businesses’ behavior and strategic decision-making (Davis et al, 1997; Le Breton-Miller & Miller, 2009). For instance, stewardship theory emphasizes responsible and sustainable resource management for the benefit of future generations, aligning well with the family businesses’ desire to preserve the firm’s legacy across generations (Brunelli et al, 2023). Furthermore, the socio-emotional wealth (SEW) perspective (Gomez-Mejia et al, 2007) suggests that family businesses prioritize non-economic attributes, such as reputation, identity, binding ties, and emotional attachment to the business, over mere financial gains, which also affects their reaction to adversity (Eckey & Memmel, 2022).…”

“…For instance, in line with general organizational resilience literature, family business resilience literature has highlighted resilience processes such as the creation of space for common reflection and activity diversification (Mzid, 2017), adaptation of the business model by changing the value proposition of the firm (Brunelli et al, 2023), or leveraging new marketing and distribution channels such as digital social media channels or delivery services (Anggadwita et al, 2022). Regarding the subsequent outcome trajectories following the demonstration of resilience, most family business resilience studies measured resilience indirectly via short-term, firm-level outcomes.…”

Аdaptation of business practices to the COVID-19 pandemic: Evidence from micro and small enterprises

“…The scope of consumer behavior changes makes it tremendously important for a firm to adapt business model components related to marketing [Wang et al, 2020;Salunkhe, Rajan, Kumar, 2021]. The most critical marketing-related business model components refer to "what" the firm offers and to "whom", that is value proposition and target customers of the firm [Brunelli et al, 2023].…”

“…A hotel that was predominantly serving business customers before the pandemic sensed the surge of demand from personal consumers as the domestic tourism grew under closed borders; hence, they adapted their offer to a B2C market to take advantage of the opportunity. Existing studies repeatedly report the cases of crisis-induced business model adaptation (BMA) through new products and new segments during crises [Bourletidis, Triantafyllopoulos, 2014;Cioppi et al, 2014;Kang, Diao, Zanini, 2020;Pal, Andersson, Torstensson, 2012;Kang, Diao, Zanini, 2020;Brunelli et al, 2023]. However, most existing studies are exploratory; they focus on describing how companies adapt business models through multiple-case studies, field observation and anecdotal evidence, but rarely test the effects of BMA on firm performance during the crisis.…”