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Manufacturing flexibility, business model design, and firm performance

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  • Wei, Zelong
  • Song, Xi
  • Wang, Donghan

Abstract

With the increasing significance of the business model in a connected economy, a new stream of literature has turned to explore the antecedents of business model design. Beyond external antecedents derived from a rational positioning view, little research has investigated the role of internal manufacturing flexibility. Based on theory of constraints and business ecosystem theory, this examines how manufacturing flexibility affects efficiency- and novelty-centred business model designs and consequent firm performance. We propose and test eight hypotheses using data from one hundred and eighty-six manufacturing firms in China. The results indicate that manufacturing flexibility promotes both efficiency- and novelty-centred business model designs and subsequent firm performance. Furthermore, the relationship between manufacturing flexibility and an efficiency-centred business model design is strengthened by competitive intensity but weakened by demand heterogeneity. In contrast, the relationship between manufacturing flexibility and novelty-centred business model design is weakened by competitive intensity but strengthened by demand heterogeneity.

Suggested Citation

  • Wei, Zelong & Song, Xi & Wang, Donghan, 2017. "Manufacturing flexibility, business model design, and firm performance," International Journal of Production Economics, Elsevier, vol. 193(C), pages 87-97.
    • Handle: RePEc:eee:proeco:v:193:y:2017:i:c:p:87-97
    DOI: 10.1016/j.ijpe.2017.07.004
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    References listed on IDEAS

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