The Influence of LEAN Philosophy on Business Models and Business Model Innovation in Services: An investigation of travel agencies

Abstract

The need to survive and excel on markets facing increasing competition and highly demanding customers represents the catalyst for the attempt of many companies to innovate their business models and to try to stay profitable. Because most business model innovation strategies involve high costs with the research and development of new products, many businesses struggle when it comes to renewing their business models. After studying two different theoretical concepts, ‘lean’ and ‘business model innovation’ in diverse contexts during the Master’s Courses, the author of this thesis perceived a possible connection between the two. Therefore, through this thesis it was aimed to explore the potential influence lean may have towards business model innovation. The case study chosen is part of a declining industry which struggles to defeat the online competition, the traditional travel agency industry. This type of business was chosen due to its high need of finding a business model innovation method which would not compromise the quality of their service or their financial situation. In this context, the researcher of this thesis sought to explore the potential influence of the lean philosophy on business models and business model innovation in travel agencies, having in mind that the lean implementation generates high quality services and also allows keeping the costs under control. The research demonstrates that several lean elements have an influence upon existing business models, whereas some of them just guide the activity without actually impacting the business model elements. The research also shows to what extent lean contributes to business model innovation. Besides the scientific conclusions, the study presents in the end the managerial implications. These may represent a useful tool for the travel agencies managers and a modest guide for the services entrepreneurs to a new way of running their businesses in times of economic recession and tremendous unconventional competition.