GoddBuzz Firm’s Dynamic Capabilities and Business Model

Business ecosystem, issues or challenges the firm faces with regards its ecosystem

Ecosystems are described as dynamic and constantly evolving communities that create new value through collaboration and competition. According to Adner (2017), the business ecosystem includes activities, actors, links and ties between the focal actor and other actors. Precisely, it comprises resource providers, production centers, laboratories, consumers, and various organizations that influence the firm’s operations (Adner, 2017). The production units and providers work effectively; the teas are imported from Sri Lanka, fruit powders are produced in New Zealand, water comes from Otakiri Spring near Whakatane.

Moreover, such activities as IT implementation serves as a tie that cannot be decomposed into a set of bilateral interactions. For example, a delivery service – Castle Parcels that are part of the system that simultaneously cooperates with production, payment systems, and laboratories through Go Sweet Platform. Another actor is the company Lion – Beer, Spirits & Wine, which is a 25% shareholder. However, it does not provide any opportunity in the distribution network. Distributors, on their end, do not pay much attention to brand positioning and value. For GoodBuzz, shared goals and interests, accompanied by the need to respond to growing consumer demands, make collaboration the foundation of ecosystem business.

Managerial recommendations:

1. Developing digital business ecosystem (DBE), including digital and business tiers. Senyo et al. (2019) suggest enhancing computer hardware, software systems and networks.
2. Planning self-organization allows managers to learn from the market environment and accordingly respond. It combines the company’s multi-tenancy and autonomous platform optimization (Senyo et al., 2019)

The current dynamic capabilities

Dynamic capabilities are the company’s potential to approach and solve often complex problems. Concerning GoodBuzz, dynamic capabilities combine opportunities to work in tandem with shifts or changes in the environment. According to Teece (2007), dynamic capabilities include the organization’s hard-to-replicate ability to adapt to changing customer needs and technological capabilities. They also comprise the company’s capability to shape its ecosystem, improve products and processes, and design and implement viable business models (Teece, 2007). Therefore, GoodBuzz’s dynamic capabilities include meeting consumer preferences in terms of organic production and efficient delivery due to an increased share of IT instruments. It is not crucial when strategic investments can prevent competitors from entering the industry, raising prices above the marginal costs of the long term. In contrast, the profitability of the kombucha manufacturer is determined by having noticeably lower costs and offering products of markedly better quality.

Managerial recommendations:

1. The main practical elements of dynamic capabilities are knowledge management and innovative activity. At present, there is a need for access to non-traditional resources for the development of managerial skills. In this case, such resources as knowledge and access to them become determinative. Therefore, it is helpful to increase lab tests and provide information for distributors in an interactive manner.
2. Most consumers are not aware of the process of how the beverage is made; therefore, it is suggested to invest in marketing campaigns. Green product demands affect sellers’ marketing dynamic capabilities (Dahlquist, 2021). It is recommended to attract potential buyers by emphasizing that the natural kombucha should have sugars, but organic ones.

Internationalisation theories, whether the firm should internationalise or not

Internationalization is an essential component of the growth and development of the company’s strategy. The Uppsala model is one of the main theories describing the process of the internationalization of a firm. The Uppsala model is that the company primarily expands its presence in neighboring markets through a minor initial appearance and gradually expands its involvement and remoteness from the primary market (Johanson & Vahlne, 2009). The main conclusions from the Uppsala model are the desire of the company to increase profits in the long term and to keep the level of risks as low as possible.

Considering resources-based theory, the process of internationalization can be viewed as the impact of organizational resources on strategy and performance. It links knowledge about foreign markets and operations in foreign markets and significant resources involved in operations in foreign markets (Knight, 2001). Another approach is strategic behavior theory, which prioritizes “improving their competitive position vis-a-vis rivals” (Knight, 2001, p. 158). Overall, the strategic goal is to achieve sustainable organizational performance.

Therefore, GoddBuzz should internationalize using strategic behavior theory. First of all, GoodBuzz should make a long-term decision to start international activities. Moreover, the company is suggested to reserve additional resources for this process, creating and developing advantages that will contribute to the preferred development in foreign markets. The third step is exporting the company’s products, serving as a platform for future international expansion. However, it is necessary to consider transportation costs and advance digital capabilities (Hervé et al. 2020). Finally, GoodBuzz’s marketing campaign should focus on the unique way of production and sustainability of the product. After gaining profit from global sales volume, it is possible to internationalize the manufacturing process in other countries.

Providing the managers of the case firm with some potential avenues for innovation

Innovation is the introduction of any new or significantly improved product or process. According to Pisano (2015), it also can be a new marketing or organizational method, workplace changes or external relations. For GoodBuzz, routine innovations are the implementation of ambitious projects in collaboration with major international companies. Partnerships with environmental and charitable organizations do not bring material benefits, but they help strengthen the company’s positive image in the eyes of consumers (Dewi et al., 2019). It also resonates with environmental and social goals in brand development plans.

Moreover, innovation in the activities of companies in the beverage market should be directed, first of all, towards environmental friendliness. Regarding radical innovation, brands are often criticized for their negative impact on the environment (Majid I. et al., 2018). This can be solved by the creation of mechanisms for the disposal and processing of packaging materials and the development of new technologies for bottles (Majid I. et al., 2018). The only way to improve the image is to release goods in packaging that is biodegradable or easily recyclable.

One of the main themes in 2021 will be transparency in production. During COVID-19, once people ran out of supplies, they realized they could experiment with brands they would not usually consume. Some of these products have had great success and can be expected to be more popular. Therefore, there is an upward trend in interest in foreign products. To maintain a positive reputation, it concerns architectural innovations; the task of technologies is to ensure the safety of products and workers in factories.

Managerial recommendations:

1. Adopting new packaging technologies such as invisible barcodes can help monitor product quality in real-time (Majid I. et al., 2018).
2. Implementation of digital expiration dates.

The current business model of the GoodBuzz

For GoodBuzz, it is necessary to take into account, first of all, the main market trends at a particular moment. The first is a healthy lifestyle as consumers are increasingly paying attention to the absence of harmful substances in the drink, the minimum amount of sugar and dyes. Innovation concerns green initiatives; many consumers are interested in environmental issues and ways to help the planet in the fight against external pollution. The business models’ purpose is to adopt innovations, promoting a healthy lifestyle for people and the environment. In a fast-changing world, a limitation of traditional product innovation is often considered for a physical product, product, or process (Botelho et al., 2021). However, a product as innovation is only one of the dynamic capabilities that shape a business model (​​Teece, 2010). The success of the market system lies in the ability to implement dynamic changes in technology and achieve dynamic growth through such changes.

Managerial recommendations:

1. Improve distribution channels, taking into account large retailers and ways of shipping
2. Create a community aiming at promoting a healthy lifestyle through activities outdoors, festivals and promotions.

References

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Botelho, D. F., Dias, B. H., de Oliveira, L. W., Soares, T. A., Rezende, I., & Sousa, T. (2021). Innovative business models as drivers for prosumers integration-enablers and barriers. Renewable and Sustainable Energy Reviews, 144, 111057. Web.

Dahlquist, S. H. (2021). How green product demands influence industrial buyer/seller relationships, knowledge, and marketing dynamic capabilities. Journal of Business Research, 136, 402-413. Web.

Dewi, I. K., Nuryadin, C., Arsyad, M., & Diansari, P. (2019). Marketing of innovative products for environmentally friendly small and medium enterprises. IOP Conference Series: Earth and Environmental Science, 235(1), p. 012035.

Hervé, A., Schmitt, C., & Baldegger, R. (2020). Internationalization and Digitalization: Applying digital technologies to the internationalization process of small and medium-sized enterprises. Technology Innovation Management Review, 10(7), 28-40

Johanson, J., & Vahlne, J. E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411-1431. Web.

Knight, G. A. (2001). Entrepreneurship and strategy in the international SME. Journal of International Management, 7(3), 155-171. Web.

Majid, I., Thakur, M., & Nanda, V. (2018). Innovative and safe packaging technologies for food and beverages: Updated review. In S. Panda & P. Shetty (Eds.), Innovations in Technologies for Fermented Food and Beverage Industries. Food Microbiology and Food Safety. Innovations in technologies for fermented food and beverage industries (pp. 257-287). Springer.

Pisano, G. P. (2015). You need an innovation strategy. Harvard Business Review, 93(6), 44-54.

Santoro, G., Thrassou, A., Bresciani, S., & Del Giudice, M. (2019). Do knowledge management and dynamic capabilities affect ambidextrous entrepreneurial intensity and firms’ performance? IEEE Transactions on Engineering Management, 68(2), 378-386. Web.

Senyo, P. K., Liu, K., & Effah, J. (2019). Digital business ecosystem: Literature review and a framework for future research. International Journal of Information Management, 47, 52-64. Web.

Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. Web.

​​Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. Web.