Analysing the resilience of business model innovations

Abstract

The disruptions caused by the COVID-19 pandemic was unprecedented in the modern era. The strict measures enforced by the governments to curb the spread of the COVID-19 virus even lead to complete lockdowns in several countries. The implications of such actions quickly transformed into a national crisis. Businesses were unable to continue their operations normally, due to the stoppages in the supply chain, significant consumer demand reduction, and changing consumer habits. On a national scale, India saw a decline of 23.9% in its GDP during the financial year 2021 (compared to the same quarter in the last fiscal year) (Kumar, 2021). At the ground level, this translated to severe financial implications for businesses. While large companies had the resources to adapt and wade through the crisis, it was the smaller retailers that were significantly affected. Several small retailers ran out of business and shut shop, while others adapted their business practices to the changing circumstances and are able to persist through the difficult times. The uncertainty associated with the continuity of existing businesses led to companies planning contingencies and even changing their entire business models. Adaption became the necessity of the hour. The changes bought about in the businesses, labelled as business model innovation (BMI), saw few firms doing bare minimum changes to retain customers. Few other firms did drastic changes to venture into a completely new business. In the short term, it is easy to see the immediate implications of such changes. While few businesses were able to improve their financial returns due to these business model innovations, few others did not have the same luck. However, this financial indicator cannot be used as a proxy for measuring the innovations’ effectiveness. Since the antecedent for all these innovations was the onset of disruptions bought by COVID-19, it is crucial that these business model innovations are resilient to further such shocks in the future. The purpose of this study is to review the business model innovations undertaken by the firms and analyse them further to understand how resilient these innovations are. The study aims to gather theoretical discussions related to resilience and apply those concepts into the business model innovations identified, with a particular focus on the low-income market and small businesses. This would provide us an alternate perspective while measuring the efficacies of the business model innovations.