How SMEs in Netherlands Manufacturing Renew Business Models

This report investigates how Small and Medium Enterprises (SMEs) in the Netherlands, particularly within the manufacturing sector, are renewing their business models in response to digital technological changes. The study focuses on the impact of digital technologies like social analytics, the Internet, cloud computing, and the Internet of Things on SMEs, which constitute a significant portion of the economy and employment. It examines the challenges SMEs face in adopting these technologies, including employee resistance and the need for dynamic capabilities to leverage new business opportunities. The research employs a systematic review methodology, including both primary and secondary research, to analyze the process of business model change, identify the triggers for change, and assess how companies monitor technological advancements. The report uses Rockwool as a case study to explore how digital transformation impacts business operations, customer engagement, and overall financial performance, aiming to provide insights into how SMEs can adapt and thrive in the digital age by renewing their resources and routines. The report also covers the research aim, objectives, rationale, scope, and structure of the dissertation.

How do SMEs in the Netherlands in
manufacturing industries renewal their
business model in the face of digital
technological change

Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................1
CHAPTER 2: THEORETICAL FRAMEWORK............................................................................6
Business model............................................................................................................................7
Business model innovation..........................................................................................................8
Digital technology......................................................................................................................11
REFERENCES..............................................................................................................................14

Title: “How do SMEs in the Netherlands in manufacturing industries renewal their
business model in the face of digital technological change“
CHAPTER 1: INTRODUCTION
In this modern era, every company wants to be competitive and for that they mostly used
advance technology. Such that due to digital transformation, each and every company profound
to have a change so that it will creates positive impact upon the firm. Moreover, by analysing
different situation, it is also quite necessary for the small enterprise to be gear up new and best
capabilities to acquire best transformational technologies for the accelerate growth. Therefore,
digital technology is not only means to using new model for smoothing of operation, but it is
actually responsible for sales, marketing, customer engagement and so on. Thus, digital
technology is actually consist of social analytics, working on Internet, cloud, digital platform,
Internet on things and mobile or online facilities (Henderson, Selwyn and Aston(2017). So, by
using digital technology, companies provide innovative products to their customers because it
will help to grab their attention and also increases the financial performance as well. SMEs are
currently accountable for approximately 99% of all firms, providing the main source of
employment, leading up to 70% of all jobs and generating between 50% and 60% of value
creation for the OECD economies (OECD, 2017)
Many SME have positive impact upon its business when they use such digital technology
like social media in which they promote their business and grab attention of many customer as
well. But on the another way, small companies in Netherlands also faces issues related to
adapting the digital technologies, though having a dynamic capabilities may acquire new
business opportunities to expand their business growth (Kane and et.al., 2015). But somehow,
SME faces issues related to employee resistance, and it is so because employees did not have
enough knowledge related to these advance technology and as a result, it will leads to employee
resistance. Thus, the current report will help to provide a better knowledge how manufacturing
industries business model is changing due to course of digital technological change. The chosen
form for this report is Rockwool which is founded as a family business and consider one of the
oldest firm, but now it Is well known and one of the leading manufacturer of stone wool. The
present study helps to raise knowledge related to digital technology and it is also analysed that
using advance technique into the working place will also help to grow small and medium
business to explore different ideas for new areas (Pagani and Pardo, 2017).
1

In addition to this, it is also realized that adopting digital transformation to SME in
Netherlands face different issues and that is why it is essential to use digital technologies that
helps in the growth and expansion of the business. Further, as per the view of Nambisan (2017)
digital technology provides an open avenue for small business owners to reach wide range of
customers in order creates the positive impact upon business performance. Further, adopting new
models and implement the same into the working place will help the firm to raise it business
operations and also leads towards further level of success. Thus, it is also examined that SME in
Netherlands are legging behind when it comes to adoption of digital technologies which may
build as well as renew their resources and routines (Helfat and Martin, 2015). But there are
many OECD countries that also faces issue related to low productivity growth, globalization and
investment or rising high inequality from last few years. That is why it is essential to use
advance techniques into the working area that leads towards success.
Through this dissertation, researcher clearly outline the information related to OECD
countries and they are handle the digital transformation and then provide a significance
importance if digital transformation in the context of SME in Netherlands . Further, using
advance technology into the working area will also help the firm to change its current business
model into new so that it will support the company to enhance its overall image and provide the
best variety of product to their customers.
Business overview: The chosen firm or this research is Rockwool which is now one of the
leading manufacturing of stone wool insulation. Moreover, its products are majorly based upon
the innovative stone wool technology and that is why, it is consider one of the leading
manufacturer of Stone wool insulation. Moreover, the quoted firm also deliver the best solution
for the horticulture and marine offshore sectors, further, the company also committed to
empowering each and every employee that Rockwool will rise the development challenges of
modern living. This is possible only by using stone because it is consider one of the most
abundant natural resources that makes a lasting impact upon the future generations. The firm also
provides its best operation to their customers from last 80 years and have a global network of
sales officers, distributors as well as partners. Not only this, the company also provide a range of
services and as per company's history, it is analysed that firm uses advance technology in order
to cope up with different challenges and also raise its brand image. Rockwool also recognise that
2

operating with integrity and as a responsible business is quite important and also undergoes to
comply with advance techniques that helps to lead a business towards further level of success.
Research Aim and Objectives:
The aim of this study is to investigate the process of change in business model due to
technological change in Netherlands’s manufacturing industries.
Objectives:
 Determine the process of business model change
 Determine the triggers that enforce the business modal change
Main Question
How do SMEs in the Netherlands in manufacturing industries renewal their business
model in the face of digital technological change ?
Sub questions:
 How was the process of change? Conscious? Driven?
 How was the old BM and what are the differences to the new one?
 How do companies monitor technological changes? Are they reactive, proactive or
interactive?
 What is a BM? How Business Models changes?
 What is technological change?
Rationale: The rationale behind choosing the topic is such that researcher have their own
interest to study on this because the entire dissertation is based upon the using digital technology
that helps a business to change its current operations. That is why, study on the particular topic
will help a researcher to enhance their current knowledge that will definitely support their future
path as well. Moreover, another reason of selecting this particular study is such that may be
University provide the topic for study and that is why researcher have to do research on this
topic. Therefore, by study on the topic that is How do SMEs in the Netherlands in
manufacturing industries renewal their business model in the face of digital technological
change will assist scholar to enhance their current knowledge and then it will used in their future
career. By study on this, researcher have a deep understanding related to advance technologies
used by SME and also analyse how there is a huge difference between tradition business model
and present business model (using advance technology). Therefore, study on the particular topic
3

aid researcher to raise own current knowledge related to digital technology which is actually used
to renewed the current operations into new one, so that it will be helpful in their future.
Scope: the current research is based how the SMEs in the Netherlands are factoring the
digital technological change and thus, the scope of the research is such that it helps different
SME to identify how digital technologies such as Internet on things, Cloud and social media
marketing will support the business to lead at further level of success. Moreover, by applying
different business model will help a Rockwool to increase its overall business performance. On
the other side, by study on the particular topic will also help SME to change its current existing
business operations and adopt new and advance techniques into the working place.
In addition to this, it is also analysed that using advance technology into the working
place will helps a firm to take decision accordingly so that it will help to raise its brand image at
international level and also grab attention of many customers towards it. For instance, if
company uses social media as a digital marketing tool will help SME to deal online at global
level because it is one of the highly used digital tool that grab more than 90 percent of peoples
towards them. Thus, it is clearly reflect that digital techniques creates an opportunities for
business to connect with new customers and it will be more easy for the owners to grow their
own company by providing best services to their customers.
Structure of the dissertation
Chapter 2 of the dissertation is consist of Research Theoretical Framework which covers
approximately 3000 words in which researcher describe different theoretical concepts that is
actually based upon the academic literature so that it will be used to solve particular issues. Such
that Teece business model which express how the firm actually creates an absolute value as well
as deliver the best to their customers as well. Further, researcher also covers business model
innovation which develop new, unique concepts that actually support company's financial
viability that further includes mission and also generate best revenue sources for the firm. In this
chapter, researcher further include dynamic capabilities which drive business model change and
describe how business drivers assist the business for digital transformation. Lastly, the chapter
also provides a deep understanding of role of different business model in manufacturing
industries and how digitalisation changes the entire small business enterprise by using different
business models.
4

Chapter 3: Methodology in which a researcher describe different methods which are used in
order to conduct the research in better way and it covers approximately 3500 words. Further, the
researcher uses systematic review method as a part of research methodology which consist of
research identification, research strategy, study selection and quality assessment. Further, the
researcher also uses data collection method in which describe the collection method and for the
current study, researcher uses both primary and secondary research method. Then data analysis is
uses in which the researcher uses qualitative research methods foe analysing the information.
Thus, in order to get the correct insight on how the SMEs in the Netherlands are factoring the
digital technological change, there is a need to uses best methods for analysing the data in better
way and that is why, it is essential to use Research Methodology that assist a researcher to
conduct the study in better way.
Chapter 4: Finding and Analysis, In this chapter, researcher introduced findings of the field
research and then present and linked the same with the secondary research in better way, this
section covers 4000 words. In this section, researcher interlinked all the collected data into
academic research in order to analyse how the SMEs in the Netherlands are factoring the digital
technological change and how does a new business model will support the business to carry out
the operations in smooth way so that it will help to raise the brand image at international level.
Moreover, researcher also present the collected information in such a way that helps to answer
the research question in better way.
Chapter 5: Conclusion and recommendations, this provides a summary of overall
research in which the researcher relates all the findings back to the problem and then describe
implications and it covers around 2000 words. Further, in this section, researcher also discuss
how the results of the work are actually used to solve the problem and also determine answers of
all research questions. Further, the section also concluded how business model especially digital
transformation helps a company to mould its business operations in such a way that helps a firm
to raise its overall productivity and profitability too. Lastly, on the basis of overall research,
scholar also provides different recommendations that will helps the firm to use those into its
workplace to leads a business towards further level of success.
5

CHAPTER 2: THEORETICAL FRAMEWORK
1. Dynamic capabilities that drives business model change
As per the view of Linder and Williander, (2017) capabilities are generally defines as the
abilities that are undertaken activities in order to lead a business towards positive direction. Even
this, dynamic capabilities also consider as a subset of all the abilities that is directed towards
strategic change as per the organization as well as individual level. Thus, it clearly reflect that
DC plays an important role for business model changes because it helps the firm to build and
reconfigure internal and external competencies that leads towards rapid changes. Even dynamic
capabilities is not another name of strategy, but is the framework that is closely linked with
strategy and as the firm have strong dynamic capabilities which may lead to coherent collection
of knowledge as well as skills that is needed to address future market opportunities as well as
development. Thus, having strong abilities will help the firm to enhance the efficiency as well as
effectiveness.
Joyce and Paquin, (2016) critic that it is hard to find the dynamic capabilities because it
will difficult for rivals to imitate once it will be successful. Author also state that dynamic
capabilities are enable the firm to create and capture the value by designing or using appropriate
business model. Moreover, the firm must have a brand image and skilled labour workforce that
helps the business to leads towards further level of success and also accept the business change
too. On the side Srnicek, (2017) stated that to deal with external change, company has to
analyse different external environment factor so that the change will be implemented properly
and it will not affect the company's brand reputation. In the case of Small and medium enterprise,
which are digitally engaged grow twice as compared to other offline counterparts. As a result,
the SME also take different action in order to implement the same into working area such that it
provides digital payment in order to improve the customer satisfaction. Thus it is clear that
digital transformation open new market opportunities for the small and medium size firm.
Though, as per the view of Weiß, Kölmel and Bulander, (2016) it is analysed that though it is
difficult for the firm to respond the external change after recognizing the threat and
opportunities. But if the firm have strong leaders and manager who provide support to analyse
the problem will help to leads a business towards accepting change. Thus, it is clearly reflected
that by integrating the dynamic capabilities with the business model, company generate different
sources of revenue that helps to leads towards further level of success.
6

Business model
As per the view of Srnicek, (2017) business model is a company's plan that helps to
generate different profit option and it also identifies the product and service of the business
which sell it in target market that is identifies the products and services of the business which
will sell in the target market. Therefore, if Rockwool also adopted the business model that it
helps the firm to fulfil its customer needs at competitive price and the sustainable cost. As Joyce
and Paquin, (2016) stated that Business canvas model is consider one of the most effective
strategic management model that helps to describe the value proposition, infrastructure and
customers. Not only this, the model also helps in aligning activities by illustrating potential
trades.
On the other side, Linder and Williander (2017) critic that company may also use Porter
five force model that helps to determine the competition in market such that the firm may further
takes different action to overcome the issues. So the renewal business model determines the
ways through which the current and new capabilities can be re-linked so that SMEs can achieve
better results. However, this process of renewing business model is complicated and associated
with a wide range of uncertainty as the dynamic mechanics of this model give both economic
and strategic implications. Among all different types of business model, Zott, Amit and Massa,
(2011) suggested that Rockwool should use Teece business model it helps the firm to creating,
delivering and capturing the values. Even business models are necessarily features of the market
economies and it is also analysed that the models are basically used to analyse new environment.
Value creation: it means that providing best quality of products and services to their
customers in order to gain high competition in market. As per the view of Mikalef and Pateli,
(2017) business model expresses how the firm creates an absolute value and then it is deliver to
the customers and even the research also indicates that the model is beneficial because it describe
the cost and gain which is associated in the process of creation and delivery and how these gain
are converted into profit for the firm.
Value Delivery: In order to deliver the best variety of products to their customer, it is
essential for the firm to deliver value that helps to generate more customers. SME also opting
such business model that helps to sustaining company at further level of success and also help
the SMEs in improving performance and relating the process of capturing values from
technological improvements and innovations. Thus, it is clearly reflected that opting advance
7

technologies into the working area will help to generate different options for the firm and it is
also realized by Flick, (2015) that he increasing digitization helps SMEs to focus on continuous
innovations in business performance enhancements in reliability, quality and adopting new
technologies, continuous skill improvement, making more efficient processes, training.
Value capturing: It is the process of retaining some amount of percentage in order to
develop value and it is also a type of Teece model so that it will creates positive impact upon
business overall performance. Moreover, it is essential to use advance technologies and adopting
different business change model in order to accepting the change and leads SME towards best
success level Zott and Amit (2010). On the other side, for renewing business model the SMEs
need to identify that how new trends will impact the competitors, customers, product offerings
and mechanics of current business model, but it will assist the business to foster a culture and
learning as well.
Business model innovation
As per Helfat and Martin, (2015) the small medium enterprises can adopt innovation
system for changing and restorative their ways of adopting digital technologies as this system or
model may include a new product, new way of production, new source of supply or opening up a
new market or creating a new kind of organization. In this system SMEs will be able to
scrutinize what their organizations are doing and why they are doing this with the thought of
radical changes or even revision. In this way, the company actually examine what the
organization will do to attract wide range of customers. It is also analysed by Foss and Saebi,
(2017) that using effective business innovation model, the company may easily increase its
profitability and even by using the existing advance technologies, the company may also enhance
their own growth options.
According to Weiß, Kölmel and Bulander, (2016) the business model is a technique used
for evaluation, communication and implementation of respective organization's strategic choices.
Even many small medium companies are consider as a main driver and the source of new
product development in Netherlands. That is why, they mostly uses innovative ideas that helps to
leads a business towards better direction. In the same way, Foss and Saebi, T., (2017) suggested
that there is a need to adopt business innovation model because it helps to change entire business
model and a small change is also provide a great benefit to the customers and business.
Therefore, by complying with business model innovation , company will realize new revenue
8

sources by improving the product value and are the customers satisfied with the offered products
or not.
On the other side, Massa, Tucci and Afuah (2017) critic that renewal business model
determines the ways through which the current and new capabilities can be re-linked so that
SMEs can achieve better results. That is why, most of the company are implementing new and
innovative ideas that helps to leads a business towards further level of success and for that they
have to develop teams in order to attain aim and objectives. Therefore, the various small medium
enterprises in Netherlands have to seek for developing teams and well operating join forces with
their clients to determine and face new potential ideas of performing repeating operations
together.
As per Li and et.al., (2016) the importance of renewing current or existing business
model in the face of technology development and digitalization is increasing day by day in
Netherlands. So to stay relevant in the face of digital technological changes the SMEs need to
renew their models on a regular basis. Renewing business model is about rethinking existing
ways of doing business, defining and questioning the current strategies and implementing these
strategies. Even as the country moves towards the digitalisation, by utilizing the technologies in
order to change the business activities which is a key differentiator that empower companies to
stay focused to their aim and objectives (Ways of digitalisation in transforming manufacturing,
2018). Therefore, manufacturing industry uses digitalisation that guarantees lower cost and also
lower down the cost and also enhance the production quality as well as adaptability and
proficiency that leads to new and innovative business openings.
On the other side, Flick (2015) states that using advance techniques into the working area
will help the manufacturing industry to move a lot faster. Though driven by rapidly changing
consumer taste and also accelerates pace of new product innovation and manufacturing needs to
determine the best way to adapt. Hence, it shows that business model provides an instant boost to
productivity and also allow projects to move faster as well. In addition to this, Hoerlsberger,
(2019) states that manufacturers will also be able to rapidly move from design floor through their
team in order to attain the defined aim and objectives. Therefore, In order to critic Weiß, Kölmel
and Bulander, (2016) the Small medium enterprises also need to be enthusiastic and persistent in
the process of renewing business model as this model foster a culture of constant improvement
9

and learning among employees where they are entitled to analyse new ideas and exercise new
solutions.
Not only this, it is also analysed by Helfat and Martin (2015) that rapid repetition will
become one of the norm in which the digitalisation was not only make manufacturing faster and
small and medium companies are also realize that using advance technology will help the firm to
drive innovation. Further, better data sharing across divisions, SME also uses the advance
technology in order to stay ahead in the competition. That is why, most of the small business in
Netherlands also seek to develop best teams and also confront new and potential ideas to perform
best renewal operations together. So that it will help to lead a small business in forward
directions. Therefore, using business model, the company gain competitive advantage over the
companies in manufacturing industry and on the same way, by implementing a unique business
model also provides unique reputation at market so that it will directly encourage first time
purchases.
As per the view of McFarlane and et.al., (2019) starting a new business always requires a
careful planning in order to maximize the chances of success. The business strategy describe the
method in which a business uses those to attain mission and objectives. On the other side, …
states the business model that creates values and also deliver the values to consumers and then
collect revenue from customers in order to make profit. Thus, both business model and business
strategy are interrelated such that Rockwool's business model is a part of company's overall
strategy and they attain the aim and objectives. The firm also change its business model over the
time in order to generate the best profit making strategy. For instance, Rockwool may
implement online stores to reach huge variety of customers so that the chances of generating
profit may increases.
Moreover, as per the view of Ranz, Schumacher and Sihn, (2019) business model is
consider as a middle layer between business strategy and business organization. Such that it is
seen as a financial transposition of a business strategy. In the same way, Miörner and et.al.,
(2019) also states that business model is being a middle link between strategy and financial
statement , even it also creates a huge impact on both innovation investment as well as financial
results which are directly link to increases profitability and productivity of the firm. Though both
strategy and business model is quite different in many ways such that strategy is more holistic
and also describe in better way. Further, it is clear by Jensen and et.al., (2016) that though
10