How do adaptive market experimentation, open marketing and strategic flexibility contribute to small firms' business model innovation in the context of a crisis?

Purpose

This research aims to investigate, in the context of a crisis, how adaptive marketing and open marketing capabilities directly contribute to enhance SMEs' business model innovation taking into consideration the mediating role of strategic flexibility.

Design/methodology/approach

Based on a sample of 120 small firms, our theoretical model is tested through a cross-sectional study. PLS-SEM is applied as the analytical technique.

Findings

The results show that open marketing capabilities are positively related to business model innovation and that this relationship is partially mediated by strategic flexibility. Furthermore, adaptive market experimentation capabilities enhance business model innovation only when fully mediated by strategic flexibility.

Research limitations/implications

Extending existing explorative research, our research illuminates how adaptive market experimentation and open marketing capabilities, in conjunction with strategic flexibility, can help SMEs to better adapt existing business models during a time of crisis. Our findings underline the potential contribution of planned test-driven activities, trial-and-error processes, data-based decisional processes and benchmarking activities. We also document how stronger networking capabilities and organizational openness strengthen the firm's ability to access the required additional resources and insights they need. These contributions remain however conditioned by the use of a convenient sampling design as well as the cross-sectional nature of the data.

Practical implications

Our findings underline the importance of empowering SMEs to nurture more effective experimental approaches in the long run, along with a more formalized open marketing posture. Our study also highlights the need for SMEs to improve their awareness of the risk of inertia and the benefits of nurturing their overall flexibility so they can adapt in an adequate and timely manner.

Originality/value

The findings of this study build on the perspective of adaptive marketing capabilities and add to the business model innovation literature in two ways. First, our study provides new insights into the cumulative and concrete consequences of market experimentation and open marketing capabilities on small firms' business model dynamics in the context of a crisis. Second, our findings illuminate the crucial role of strategic flexibility which, partly or entirely, contributes to the full realization of the potential of the marketing capabilities at hand.