Innovative Business Development Model: The Diasporic Dimension

Abstract

Business development model innovation is perceived as a way to not just grow profit but also as a way to avert threats from competitors. Business development model innovation is a natural evolution process, recognizing that change is inevitable and is needed once a business model has run its planned course. Therefore, in pursuit of growth, entrepreneurs make major structural changes, collapsing organizational boundaries and leveraging resource procurement from abroad. For centuries, business travelled abroad for many reasons that include availability of raw material (spice trade), availability of technology, (industrial revolution), availability of labor (continuous migrations) and more recently the availability of market demand (emerging economies). Over and above all this was the migration of capital. This gave birth to multinational corporations (MNCs). The MNCs were generally huge business conglomerates which could easily entrench themselves in any market abroad. Later on, the MNC system transformed into diversification of production activities, aboard. This large scale MNC business dispersion is now being shifted to medium and small scale business also. But the pattern of international business linkage at small and medium level is far different from the joint venture, subsidiary, mergers, acquisition or franchisee mode adopted by MNCs. In this paper we discuss the innovative method of business linkages being developed at medium and small scale level between the Diaspora and the parent country. The international business linkage at this level follows a more informal and dispersed model. The main factors which decide this innovative model is the urge of Diaspora for business expansion because of easily available transportation facilities, technology transfers, capital transfers, market accessibility, product development, market intelligence, government regulations and promotions etc. But more important than these are non-business relations like availability of inside information through family relations, techniques of dealing with government and financial institution, cultural aspects and social networking. These business innovative relations are going to have a significant impact on the growth of business through factors that include cost reduction, strategic flexibility, focus and specialization, advantage of being able to rapidly exploit new markets and product opportunities and shared or reduced risk of capital investment. This is illustrated through a case of a garment manufacturing unit’s business model in Surat Apparel Park.