Practices and challenges of business model innovation: a case of Hibret Manufacturing and machine building industry
Creators: name: Solomon, Eshetu
Publisher: name: National Academic Digital Repository of Ethiopia
Year: 2019

description: Nowadays, the market become complex and the business environment also highly changing. The business organizations operate in these complex and changing environments that has great influence in their growth and expansions. organizations must continue offering the value that is relevant to the customers to be profitable. Not only that, implementing business model innovation very crucial for the success of the company to exist in the market where there are the changing behaviors of the customers and business environment. For this reason, the main objectives of this study were to investigate the practice and challenge of business model innovation in the Hibret Manufacturing and Machine Building Industry. The Research method was qualitative method and the descriptive survey research design was employed in this study. Because this method can describe the current situation of the HMMBI more clearly and precisely than other survey methods. In order to achieve the objective of the study the researcher used purposive sampling techniques and the sample size for the research Comprise 35 management members of the company. And both primary and secondary data sources were used. The primary data was collected through intensive interview, focus group discussion and observation. While, the secondary data was collected from different documents. From this data analysis, the findings of the study showed that the practice of the intended business model innovation was not implemented in the organization. The findings also indicate the major challenges of the business model innovation are lack of strategic thinking, change resistance, absence of profit-oriented mentality, inability of maximum usage of resources, lack of innovative culture, lack of business knowledge. Lastly the profitability potential of the existing business model of the company was investigated through major measurements such as customer perceived value offering, cost effective and easy configurable, the sole offeror of the value, difficult to imitate, pricing strategy and cost was used as measurement whether the existing business model of the company profitability potential or not and as the research found the company is unprofitable. Consequently, the researcher suggests a series of measure which would be taken by the company to address various challenges identified that an aggressive business model innovation to make the company competitive and relevant for its customers in satisfying their needs and solve the problem. The company need to implement the business model innovation that become compatible with the current business environment. To tackle the aforesaid challenges the company needs effective leadership who have vision, strategic thinking and knowledge. In addition, the organization should focus on competitive and potentially profitable business model to be exercised in order to increase the effectiveness of the business operation and provide necessary technical and leadership support to make the business model innovation process more sustainable.