Purpose The present paper aims at exploring effective business model adaptations in response to unexpected events such as the COVID-19 pandemic.
Design/methodology/approach The authors test the effect of two major business model adaptations, namely changes in the value proposition and changes in the target market, on a sample of 96 family SMEs.
Findings Results show that only changes in the value proposition had a positive and significant impact on performance, helping family SMEs to better confront COVID-19. However, this effect is reduced in the case of target market change.
Originality/value To the best of the authors’ knowledge, this is the first study to investigate how business model adaptations in family SMEs affect performance in crisis situations.
The unprecedented nature of COVID-19 has affected the worldwide economy (Eggers, 2020) with small and medium-sized enterprises (SMEs ) being severely hit (Alonso et al., 2020; Juergensen et al., 2020; Levashenko and Koval, 2020). Recent data on the pandemic reveal that in 2020 about 40% of UK SMEs stopped operations (FSB, 2020), 50% of German SMEs suffered a more than 10% decline in revenues (DIHK, 2020) and more than 70% of Italian SMEs were significantly affected by the crisis (CNA, 2020). In fact, SMEs’ peculiarities such as resource constraints, the barriers to accessing capital, and the shorter time frame for coping with the shock, make them particularly vulnerable to crises (European Commission, 2019). As Juergensen et al. (2020) argue SMEs are less resilient compared to larger firms and they need more time to establish normal operations after a crisis occurs.
7. Limitations and future research directions
Our research is not exempt from limitations.
First, due to the urgency of gaining a real-time picture of the phenomenon, we used a convenience sample (Venter et al., 2005), which increases the response rate in the collection of data in a quick time, but it limits the generalizability of results. It would be interesting to enlarge the sample, for example, to other types of firms, that are not family SMEs, in order to better understand how BMAs, affect firms’ performance during extreme external shocks such as the COVID-19 pandemic (Chirico et al., 2019; Soluk et al., 2021). Therefore, we strongly encourage scholars to engage in large-scale quantitative studies, cross-country studies and to investigate whether and how our findings might be statistically generalized.