Effectiveness of Business Model for Young and Established Firms: Evidence From Indian SMEs

A business model guides a firm’s interactions with its diverse stakeholder and creates value. In this study we examine two important attributes of a business model – innovation and efficiency, and their influence on a SME performance. Then we explore the contingent effect of their age and environment on the relationship between business model and performance. Based on the data from 239 SMEs in India, we find both innovation and efficiency in business model have significant implication on the performance. The findings indicate that innovation is more beneficial for younger SMEs while efficiency is more productive for their established and mature counterpart. Focusing on both innovation and efficiency simultaneously is fruitful for established, but counterproductive for, younger SMEs.$$n