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A Study on the Market Competitiveness of Small-to-Medium Sized Businesses Utilizing CBMI(Convergence Business Model Innovation)

Affiliations

  • Korea Institute of Industrial Technology, Korea, Republic of
  • Department of Aeromechanical Engineering, Hanseo University, Korea, Republic of
  • Korea Business Angels Association, Korea, Republic of

Abstract


Background/ Objectives: Businesses in the industrial era of the past could operate under a business model limited to surviving in a single industry by focusing on technological development centered on manufacturing. However, in the present, convergence of various industries and technologies has become prominent and market conditions have come to represent customer-centric thinking, leading to an increased tendency to view the corporate environment as more complex. Methods/Statistical Analysis: This paper seeks to first review the existing research on the convergence industry, business models and customer-centric product realization, and then propose a CBMI model that can vitalize the convergence of small-to-medium sized businesses. The intended methodology for CBMI shall consider the specific characteristics of small-to-medium and venture companies, and focus on simplicity and easy applicability to develop a business model necessary for the planning and commercialization of convergent products. Findings: CBMI methodology aims to propose consists of three stages – establishment of the CBMI scope and design guidelines, formation of an interactive communication channel, and proposition of an innovation process. This process leads to the implementation of the CBMI value flow optimized model. The first stage, by analyzing the business environment within the industry/market to reflect convergence trends and corresponding competitive strategies, establishes the scope of CBMI and the guidelines for activities such as new business model design. The second stage is when customer value may be maximized by establishing an interactive communication channel between the supplier and customers in order to reflect customer needs. It is proposed as an innovation process strategy that includes the process of customer feedback being provided to the supply channel before the final outcome of the product or service reaches the customers. For the third stage includes the supplier-customer interactive communication channel as the convergent element, the business process of how the final outcome is delivered to the customer. Application/Improvements: The concept of CBMI presented in this paper aims to enhance corporate capabilities by merging conventional business models with the current competitive trend of convergence, allowing a cultivation of competitive advantage and the establishment of innovation processes. It is believed that the proposed methodology will be helpful in presenting a strategy for the resurgence of small-to-medium sized businesses, which are facing changing business environments due to intensifying competition and heightened uncertainty.

Keywords

Convergence, Convergence Business Model Innovation, Small-to-Medium Sized Businesses, User Centered Process.

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