Validation of Business Model Innovation for Digitized Product and Service-Based Activities in the Core Business (A Case Study in the Microenterprise ‘Buwah’)

Abstract

The contemporary beverage sector within the Small and Medium-sized Enterprises (SMEs) domain is currently a favored industry among millennial entrepreneurs. According to the Indonesian Creative Economy Agency, the creative industry sector has the potential to contribute to national growth for business players in Indonesia. The issue faced by Buwah SMEs is a drastic decrease in revenue over the past two months, despite the promising start of their sales outlet openings.The primary objective of this research endeavor is to elucidate the business model of Buwah SMEs through the utilization of the business model validation methodology. This research seeks to delineate and validate the assumptions underpinning the innovation of product and service business models of Buwah SMEs, prioritizing those requiring immediate validation. Furthermore, the research aims to delineate strategies for business expansion predicated on digitalization, particularly in the core activities of Buwah SMEs. This research adheres to a descriptive approach with a qualitative orientation. Data collection methodologies encompass three core techniques: observation, interviews, and documentation. The research findings reveal the validation of four (4) specific blocks within the Business Model Canvas. These validations encompass hypothesis 1 within the customer segment block, hypotheses 2 and 3 within the Value Propositions block, hypothesis 5 within the customer relationship block, and hypothesis 9 within the revenue streams block. Future research recommendations include a comprehensive exploration of the Business Model Canvas blocks that have not been examined in this study, as this research only focuses on four blocks. Based on the research findings, practical recommendations have been formulated, which Buwah may judiciously consider for prospective business development endeavors.