ISSN: 2222-6990
Open access
Business Model Innovation (BMI) has emerged as a significant strategy for enhancing the competitiveness and sustainability of Micro, Small, and Medium Enterprises (MSMEs), particularly in volatile environments such as Plateau State, Nigeria. Despite their pivotal role in employment generation and GDP contribution, MSMEs face persistent challenges including limited resources, infrastructural deficits, and intense competition. This study investigates the role of BMI in improving MSME performance, focusing on dimensions such as value proposition innovation, revenue model innovation, innovative resource allocation and strategic partnerships, cost structure optimization, and employee engagement. A population of 1,533 MSME owners/managers was considered, with a purposive sample size of 318 respondents. Using Partial Least Squares Structural Equation Modelling (PLS-SEM), the study found that value proposition innovation, revenue model innovation, innovative resource allocation, and strategic partnerships significantly enhance MSME performance, while cost structure optimization showed no significant effect. Employee engagement was also found to mediate the relationship between value proposition and performance, underscoring its importance in translating innovation into tangible outcomes. The findings highlight that while BMI dimensions are critical drivers of MSME success, their effectiveness depends on strategic alignment and employee involvement. The study recommends that MSMEs in Plateau State prioritize customer-centric value propositions, adopt innovative revenue models, and strengthen partnerships, while simultaneously fostering employee engagement to maximize the impact of BMI. Policymakers should also provide supportive infrastructure and training programs to enable MSMEs to fully leverage BMI for sustainable growth.
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