Barriers to business model innovation : An exploratorive multiple case study of subcontracting manufacturing SMEs in Jönköping County

Abstract: Background – In today´s globalized environment, a stronger emphasis on moving production to low-cost environments is present. Assembling a complex product usually involves multiple smaller manufacturing firms across the globe. As a result, smaller specialized firms have an important role in the market but are also strongly dependent on the demand for the final product. Hence, their business model can be dependent on a specific patch which inhibit innovation and evidently leaving them vulnerable to changes in the environment. One main challenge for companies´ business model is the question of continuous flexibility and adaption to an ever changing business context. Purpose - The purpose of this thesis is to explore dynamic capabilities as a source of business model innovation in manufacturing subcontractor SMEs in Jönköping County. The studies aim is to explore how these firms develop dynamic capabilities in order to identify and then overcome barriers for business model innovation. Method – Primary data was collected through a multiple case study of three manufacturing companies in Jönköping County. The data was later coded and findings cross-case compared with a lens of dynamic capability view in order to find similarities and dissimilarities. Conclusion- The findings from the three case companies indicates that dynamic capabilities are interdependent to each other, meaning all need to be taken into consideration for continuously successful business model innovation. Disregarding the development of one business model component can restrain others, thereby resulting in inadequate innovations. A sensing capability was identified however yet the abilities to seize and reconfigure opportunities taking the whole BM into consideration were not present for all of the three case companies. By lack of a coherent development of the BM, barriers become present and a sustained competitive advantage is unreachable. All three cases agreed upon the human resource management to be the major challenge for their organization to sustain a healthy growth.