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Innovation of the production process of engineering companies in relation to business portfolio

Author

Listed:
  • Milan Talíř

    (Brno University of Technology, Czech Republic)

  • Jarmila Straková

    (Institute of Technology and Business in České Budějovice, Czech Republic)

Abstract

The paper is aimed at the innovation process in the context of the business portfolio of micro-enterprises. This type of companies is typical of and prevalent in the southern region of the Czech Republic, and the presented conclusions have general validity. A newly developed method of assessing the innovative technological potential of enterprises called "Business technology assessment system" (BTAS), with the contribution of "Criteria analysis of systems". The research answers the question, what economic efficiency can innovations in the production process bring to SMEs dealing with custom manufacturing in the engineering sector. Technological backwardness including corporate infrastructure was proven. Companies compensate for this shortcoming by an increased focus on satisfying customer needs and a high degree of flexibility and innovation in production. From the point of view of production processes, there is a high degree of interconnectedness between individual operations and sub-processes. The business portfolio of most of these companies is disproportionately broad, and this is reflected in the negative findings in terms of the disproportionate number of methods and technologies that these companies possess, but do not fully utilize. Such behaviour of the companies can be explained by the absence of active creation and updating of business strategy. The economic evaluation of the innovative process (BTAS) proved that the very implementation of innovations did not lead to a major increase in the profit margin. The situation was different when evaluating the benefits of the digitization process, which brought an increase in sales and corporate margins. A completely new finding has been demonstrated, i.e., if a company has unused equipment which brings opportunity costs as well, it is possible to create space for innovation by removing it, and at the same time the sale of equipment can be a significant financial contributor to innovation.

Suggested Citation

  • Milan Talíř & Jarmila Straková, 2023. "Innovation of the production process of engineering companies in relation to business portfolio," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 10(4), pages 118-134, June.
    • Handle: RePEc:ssi:jouesi:v:10:y:2023:i:4:p:118-134
    DOI: 10.9770/jesi.2023.10.4(8)
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    References listed on IDEAS

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    1. Ghezzi, Antonio & Cavallo, Angelo, 2020. "Agile Business Model Innovation in Digital Entrepreneurship: Lean Startup Approaches," Journal of Business Research, Elsevier, vol. 110(C), pages 519-537.
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    More about this item

    Keywords

    strategic management; innovation; industry production process; BTAS;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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