Crisis Management And Competitive Adaptation In Times Of Economic Crises

Crisis Management And Competitive Adaptation In Times Of Economic Crises – Summary. Even in severe economic crises and recessions, some companies can make a profit. During the last four crises, 14% of large companies increased their sales growth rates and EBIT margins. Shocks such as the Covid-19 pandemic can lead to long-term changes in customer behavior. To survive and thrive in a crisis, start with how people spend their time and money. Challenge traditional ideas and use data to proactively look for anomalies and surprises. Then adapt your business model to reflect changing behaviours, taking into account the impact of new trends on how you create and deliver value, who you need to work with and who your customers should be. Finally, put your money where your analytics fit and be prepared to invest more aggressively and dynamically.

Even in severe economic crises and recessions, some companies can make a profit. During the last four crises, 14% of companies increased their sales growth rates and EBIT margins.

Crisis Management And Competitive Adaptation In Times Of Economic Crises

Crisis Management And Competitive Adaptation In Times Of Economic Crises

Shocks like the Covid-19 pandemic can lead to long-term behavioral changes, and these companies are quick to recognize those changes, adapt their business models to reflect them, and not be afraid to invest.

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Explore the changes in how people spend their time and money and the impact on the businesses involved. Then learn what those changes mean, how you create and deliver value, who you need to partner with, and who your customers should be. Finally, be prepared to put your money where your analysis takes you.

Crisis Management And Competitive Adaptation In Times Of Economic Crises

It will be some time before we understand the full impact of the Covid-19 pandemic. But the history of such shocks tells us two things. First, even in severe economic crises and recessions, some companies can make a profit. Among large companies doing business during the past four crises, sales growth rates and EBIT margins increased by 14 percent.

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Crisis Management And Competitive Adaptation In Times Of Economic Crises

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Crisis Management And Competitive Adaptation In Times Of Economic Crises

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Crisis Management And Competitive Adaptation In Times Of Economic Crises

Montserrat Peñarroya-Farell Montserrat Peñarroya-Farell Scilit Preprints.org Google Scholar 1, * and Francesc Miralles Francesc Miralles Scilit Preprints.org Google Scholar 2

Received: 2021 December 29 / Revised: 2022 January 30 / Adopted: 2022 February 7 / Published in 2022 February 11

Crisis Management And Competitive Adaptation In Times Of Economic Crises

Strengthening Disaster Response And Cooperation In South Asia

Surviving a humanitarian disaster such as the COVID-19 pandemic is a major challenge for micro, small and medium-sized enterprises across all industries. In addition, cultural and creative companies face additional challenges. Many of these companies managed to survive the impact of the pandemic, offering a business model transformation that would provide new added value in response to environmental damage; they responded to the crisis by strategically adapting their business models. According to the existing literature, in a VUCA (volatile, uncertain, complex and ambiguous) environment, dynamic capabilities are created to detect and exploit new opportunities and reconfigure firm assets. However, in highly hostile environments such as the COVID-19 crisis, the dynamic capabilities approach does not explain the strategic decisions of business owners. A cross-comparative analysis of ten micro and small enterprises in the Spanish cultural and creative industries was carried out to investigate how the enterprises adapted to the COVID-19 crisis and what different organizational capacities they implemented. This paper proposes a new framework that argues that business model adaptation is better understood through the theory of contingency management and improvisational capabilities, rather than only through the lens of dynamic capabilities. The proximity of organizations in the diffusion of innovation according to the open innovation paradigm is also important to understand the adoption of the business model. From an academic perspective, this article adds to the current understanding of business model adaptation by micro, small and medium-sized enterprises in highly hostile environments. This new framework aims to offer managers concrete guidance on how to systematically adapt their business models to hostile situations.

COVID-19 has created complex and external shocks in almost every industry and affected most companies around the world. The impact of the pandemic has severely distorted the labor market and rendered many normal business models at least temporarily ineffective. Although all businesses have been affected, micro, small and medium-sized enterprises (SMEs) have felt the most impact due to their limited ability to respond to unexpected competitive challenges. in 2020 97% of Spanish companies were classified in this category. A total of 2,910,016 companies (73%) were from the service industry, with the majority from the cultural industry [1]. The health of cultural enterprises and increasing their resilience to further environmental hostility is critical to their survival and to society as a whole. Heritage, visual and performing arts, cinema, music, publishing and fashion design are deeply embedded in everyday life and contribute to the social and economic development of the world. As the European Union Commission states in its Green Paper “Unleashing the potential of culture and creative industries” [2], at the heart of our social fabric, culture shapes our identity, aspirations and relationships with other people and the world. Cultural and creative organizations are very important in our society.

Crisis Management And Competitive Adaptation In Times Of Economic Crises

To remain competitive in a VUCA environment, scholars agree that organizations must develop the ability to detect new opportunities, exploit them, and reconfigure existing assets to adapt the firm to specific circumstances. This ability is called dynamic ability.

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Dynamic capabilities, by definition, are “change-oriented capabilities that help companies deploy and reconfigure their resource base to meet changing customer needs and competitor strategies” [3]. Dynamic capabilities include various routines such as market awareness, opportunity exploitation, exploitation and transformation or reconfiguration of business models [ 4 , 5 , 6 , 7 ]. However, a highly hostile environment such as the COVID-19 pandemic makes this traditional approach obsolete when it comes to strategic rethinking. When a firm’s survival is at stake and drastic measures must be taken immediately, the dynamic capabilities approach alone cannot explain some of the strategic decisions of business owners.

Crisis Management And Competitive Adaptation In Times Of Economic Crises

This study aims to better understand how Spanish cultural and creative industries organizations implemented business model adaptation during the COVID-19 pandemic. Based on a resource-based approach theory-based perspective, this study uses an inductive approach to understand the strategic foundations underlying the successful adoption of SME business models in the Spanish cultural industry. The research framework was developed by borrowing theories of IT strategic impact and supporting operational activities to develop new strategic impact, resource-based views, dynamic capabilities, improvisation capabilities, and open innovation.

From an academic perspective, this new framework provides new conceptual elements to inform strategic efforts that highlight the strategic challenges that companies may face during a crisis such as COVID-19. From a management perspective, the outlined framework should provide new insights to managers and decision makers when major competitive challenges influence SMEs’ competitive strategies.

Crisis Management And Competitive Adaptation In Times Of Economic Crises

Organizational Design: A Complete Guide

As mentioned, our area of ​​interest is adapting business models in highly hostile environments. This study is conducted based on a methodological framework based on a grounded theory perspective [8]; therefore, theoretical bias should be avoided [9]. The resulting theory will be combined with the literature presented in the Discussion section. This literature review aims to clarify the basic terminology of our field and define the concepts we will discuss in the discussion.

The business model (BM) concept is a relatively new construct that has received increasing attention over the past fifteen years [7, 10, 11]. Although there is no universally agreed upon definition, there is a strong consensus that BM includes customer-centric value creation, the delivery of value propositions to specific market segments, the value chain structure required to deliver the value proposition, and the mechanisms for capturing enterprise value. used and how these elements are interrelated

Crisis Management And Competitive Adaptation In Times Of Economic Crises

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