4PL Digital Business Models in Sea Freight Logistics: The Case of FreightHub
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Course: | BUS606: Operations and Supply Chain Management |
Book: | 4PL Digital Business Models in Sea Freight Logistics: The Case of FreightHub |
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Date: | Saturday, September 7, 2024, 7:38 PM |
Description
Read this case study of a 4PL model.
Abstract
For years, the freight forwarding industry has been facing high levels of global competition. Accelerating this development, new and digital competitors are entering the market, striving to make freight logistics even faster, cheaper, and more predictable. Digitalization processes change traditional logistics businesses, leading to more efficient, flexible, and de-centrally organized logistics services. Sea freight operations, in particular, have the potential to better fulfill customer-specific requirements in competitive and complex environments by integrating digital technologies. Therefore, it is essential to understand how automating informational processes, such as freight brokering, affect business models in the logistics service industry. The present study qualitatively analyzed the case of FreightHub, a fourth-party logistics (4PL) sea freight agency, and compared its business model with traditional third-party logistics (3PL) business models. Applying a digital business model conceptualization, the present paper presents an extended framework for digital sea freight business models. In this line, the study contributes to theory and practice by refining business model research in the maritime transportation context, and providing managerial implications about the opportunities and threats of a digital transition in this industry.
Keywords: digital business model; third-party logistics (3PL); fourth-party logistics (4PL); sea freight logistics
Source: Tim Gruchmann, Nadine Pratt, Jan Eiten and Ani Melkonyan, https://www.mdpi.com/2305-6290/4/2/10/htm
This work is licensed under a Creative Commons Attribution 4.0 License.
Introduction
Logistics provides a necessary support for much of
the current economic system. In Germany, the transportation and storage
of goods directly contributes about 7% of the gross domestic product
(GDP), and employs about 2.5 million people. Globally, this sector has
been growing faster than total GDP, as trade has expanded substantially;
supply chains have become longer; and globalization has increased.
Logistics activities have evolved substantially in recent decades, which
has also led to a highly competitive market. Accordingly, there is
pressure to continuously improve the quality of logistics services and
to offer them at lower prices. To relieve cost pressure, freight
forwarders have attempted to break the transport process into multiple
steps and to optimize each of these steps separately, which makes
coordination and integrated cooperation between the parties involved
more difficult. As a result, there is often no central contact with a
complete overview of the entire transport chain. Such separated
operations and shared responsibilities promote "silo thinking" in the
logistics industry. To address such issues, new digital business models
have increasingly emerged, challenging traditional, third-party
logistics (3PL) business models. Particularly, platform-based
business models, such as Uber Freight, enable transparent,
real-time, on-demand arrangements that cut into the domain of 3PL
services. In this line, Hofmann and Osterwalder predict that 3PL
service providers focusing on standard services may lose significant
market shares in the near future. Similarly, Schramm et al. see a
clear trend away from simply organizing transportation and logistics
activities towards the providing of information technology (IT)
platforms and other value-adding services, such as planning, analytics,
and monitoring. Consequently, fourth-party logistics (4PL) business
models are coming to the fore. These 4PL providers are seen as almost
asset-free integrators between their clients and 3PLs to manage global
supply chains. While 4PL concepts and business model innovation
facilitated by digital technologies have been often addressed in extant
literature, special emphasis on sea freight services and maritime
transportation is rather scant. Thus, the analysis of a case study,
which successfully implemented a digital 4PL business model, promises
further insights into the digital transformation of sea freight
services. Against this background, the main objective of the present
study is to assess and compare traditional 3PL business models with
disruptive 4PL business models to better understand how the automation
of informational processes, such as freight brokering, might affect
future operations in maritime transportation. Accordingly, the following
research questions (RQs) guided this study.
RQ1: What are the fundamental differences between FreightHub's business model and a traditional 3PL business model?
RQ2:
What opportunities and risks does the disruptive potential of
digitalization have for sea freight services and maritime
transportation?
To answer these research questions, the authors
applied a qualitative and conceptual approach of abductive reasoning, structuring the present study in the following way. Section 2.1
presents an overview on classifying services in the logistics sector,
with a special emphasis on 3PL/4PL literature. Further, we analyze
conceptual and empirical literature on digital business models to give
an overview on the potential impact of digitalization and digital
technologies on the logistics sector in general (Section 2.2), and on
maritime freight transport in particular (Section 2.3). This literature
review in Section 2 is followed by the case study of FreightHub in
Section 3, highlighting the innovation potential of digitization within
4PL business models. Analyzing the FreightHub case, new constructs and
business model elements are inductively explored, while constant
comparisons with extant literature are pursued in a deductive manner. As
a result, Section 4 links the existing, conceptual constructs of
business model value dimensions with those empirically explored to
elaborate on the effects of automating informational processes in
maritime transportation, also discussing the results within a larger
body of literature. Lastly, Section 5 draws conclusions from the
findings, also showing the limitations of this study and potential
future research avenues. This project accordingly contributes to theory,
by refining business model research in the maritime transportation
context, and to practice, by giving managerial implications about the
opportunities and threats of a digital transition in this industry.
Literature Review
Logistics service providers constantly review their business strategies in order to provide high quality, modern services to their customers, whose requirements are becoming more demanding in the dynamic world. Thus, in this section, we firstly review and classify logistics business strategies based on attributes of their operations. Further, we carry out intensive literature analysis on digital business models in general, to apply these elements and the identified impacts of digital technologies on the maritime transportation sector with a specification on a digital FreightHub's business model.
Classification Scheme of Business Models of Logistics Services
In
the logistics industry, business models of logistics service providers
are categorized by their service range and structure. A popular
classification scheme is the 1PL to 5PL scheme. Single service (1PL)
providers offer single logistics services, such as freight forwarding
or warehousing. Second-party logistics (2PL) service providers carry out
all classic logistics operations in transport, handling, and storage.
This is a typical business model for freight forwarders, sea freight
carriers, and parcel service providers. A 3PL service provider extends
classic logistics to include adjacent logistics services, such as cross
docking, inventory management, and packaging design. In this
respect, 3PL service providers are often companies that operate globally
and, therefore, are able to implement advanced strategies, such as
decision support systems, to optimize means of transport, routes, and
capacity use. With its own assets, a 3PL service provider offers
comprehensive solutions for coordinating and integrating all members of
the supply chain. In addition to this, 4PL service providers
combine resources, capabilities, and technologies to create
comprehensive supply chain solutions and provide network-integrated
logistics planning and consulting. Thus, 4PL service providers are
often specialized consulting companies, which do not conduct any
business operations of their own (so-called non-asset owning service
providers). Since a 4PL provider does not have any logistics assets of
its own (e.g., its own vehicle fleet or storage capacities), the
services of other logistics service providers (1PL, 2PL, or 3PL) are
combined for customers according to their individual requirements. As
the 4PL provider operates exclusively in the areas of planning and
coordinating using modern IT solutions, customers expect high quality
service at low costs. In contrast, lead logistics (5PL) service
providers carry out certain operations by owning or buying physical
logistics infrastructures. Since the business model of 4PL/5PL providers
is rather theoretical and has, so far, been limited to a niche role in
practice, it is precisely here that digitalization offers the
potential for a comprehensive digital business model to emerge. To
further build on this, Table 1 and Table 2 provide an overview of
selected papers on 3PL and 4PL, respectively.
Table 1. Selected papers on third-party logistics (3PL).
Study | Summary |
---|---|
Gammelgaard et al. |
Gammelgaard et al. empirically study the role of the different parties in logistics. They define three types of 3PL service providers: carriers, logistics service providers, and logistics service intermediaries. The authors create a collaborative logistics management model, which captures the different actors and presents the information and material flows between the actors. |
Halldórsson et al. |
Halldórsson et al. examine whether environmental issues are a 3PL provider selection criterion. Their study is based on nine cases (three 3PLs and six buyers of 3PL services). The authors conclude that 3PL providers show an increased interest in environmental issues on the one hand, while 3PL buyers' decisions continue to strongly depend on performance targets, such as price, quality, and timely delivery. |
Jayaram and Tan |
Jayaram and Tan have found that there are differences in the performances of companies that involve logistics providers in their operations and those that do not. Based on survey research, their study shows that 3PL selection criteria and relationship building positively influence company performance. |
Lai et al. |
Lai et al. collect data from 134 3PL customers to test different hypotheses. After their evaluation, the authors state that relationship quality plays a critical role in logistics outsourcing relationships. They show that, through inter-organizational relationships and integration, customers of 3PL service providers can use their dependency on those providers to effectively improve their financial performance. |
Leuschner et al. |
Leuschner et al. carry out a meta-analytical approach and conduct a review of empirical literature regarding 3PL. They find that a close and collaborative relationship between the 3PL customer and the 3PL service provider can improve the logistics service and overall business performance. However, they note that there are no conclusive statements in the literature regarding trust and commitment in 3PL-supplier-buyer relationships. Trust, therefore, should be built through safeguarding mechanisms to avoid opportunistic behavior. |
Govindan and Chaudhuri |
Govindan and Chaudhuri analyze the risks faced by logistics service providers. For this purpose, they used a multi-criteria-decision-making approach called the "Decision Making Trial and Evaluation Laboratory" (DEMATEL). They find that the relationship, at distance, between the logistics provider and the customer is a risk, and call for more collaboration and integration. It is particularly important to build up trust, which leads directly to cooperation and indirectly to the development of commitment. |
Hofmann and Osterwalder |
Hofmann and Osterwalder particularly look at the impact of digitalization on 3PL business models. By proposing a theoretical framework, they conclude that logistics service providers face significant hardships from new technologies, such as autonomous vehicles and 3D printing, as well as from platform-based business models and the sharing economy. They further see digitalization as an opportunity to enable forward or backward integration between 3PL customers and their suppliers. |
Singh et al. |
Singh et al. state that logistics providers have an important role in making cold supply chains for perishable food and pharmaceutical products more efficient. The authors identify ten criteria (e.g., warehousing facilities, customer service, etc.) that are suitable for the 3PL selection process. They state that 3PL providers must work in cold chain under highly uncertain conditions and, therefore, must develop a hybrid fuzzy approach. The results imply that a 3PL provider should focus on continuous process improvement (e.g., by using advanced technologies). |
Table 2. Selected papers on fourth-party logistics (4PL).
Study | Summary |
---|---|
Krakovics et al. |
Krakovics et al. create a robust performance measurement model to evaluate logistics operators. They consider the case of a company, which decided to terminate its direct contract with a 3PL for operating its logistics activities and, instead, contracted a 4PL to handle the entire outsourcing process, and to hire and monitor the necessary 3PL services needed. As a result, efficiency indicators (e.g., for distribution efficiency or internal storage inventory accuracy) were defined to evaluate 3PL performance and determine 4PL goals. |
Hsiao et al. |
Hsiao et al. provide a framework to analyze the effect outsourcing various business activities has on logistics service performance. They show that outsourcing has no direct impact on service performance (delivery reliability, flexibility, and lead-time). Through network and overall supply chain optimization, however, 4PL providers could step in to deal with this demand complexity, as they generally have superior capabilities for combining and managing different resources. |
Hingley et al. |
Hingley et al. conduct an exploratory qualitative study with three participating suppliers, three logistics service providers, and one grocery retailer, aiming to determine the general drivers and barriers that can arise when 4PL service providers are introduced to promote horizontal collaboration. The authors find that large 3PL service providers can deliver 4PL services. Despite the performance benefits achieved through 4PL services, 4PL providers negatively impact retailer-supplier collaboration. The grocery retailer would rather keep control of the supply chain than become more cost efficient with a 4PL service. |
Saglietto |
Saglietto proposes an analysis of the 4PL community based on an empirical study of all logistics service providers operating in France, using information obtained from the DIANE database and selected websites. As a result, the author presents a new taxonomy and definition of the 4PL, and states that 4PLs require more intensive use of information technology, pooling of resources, and skilled human capital than other logistics service providers. |
Mehmann and Teuteberg |
Mehmann and Teuteberg examine and describe the long-term implementation of 4PL in the agricultural bulk logistics sector. The authors identify and validate 4PL attributes with seven case studies. The key contribution of their study lies in describing the usage, benefit, and organizational structure of the 4PL approach with elements of the work system theory. |
Schramm et al. |
Schramm et al. analyze the potential future of the 4PL concept based on expert opinions, with a special emphasis on digitalization. Their research follows an explorative mixed methods approach with semi-structured interviews and an online survey questionnaire. The authors find that IT capabilities will be an important differentiator for 4PL providers in the future. Further, relationships between 4PL providers and their clients can become closer and more strategic, which leads to a customer valuing, not only direct cost reductions, but rather improvements resulting from optimized operations through superior analysis and planning functions. |
Innovation Potential of Digital Business Models
Study | Summary |
---|---|
Porter and Heppelmann |
Porter and Heppelmann examine how smart, connected products reshape competition in industries and can expand industry boundaries. These products consist of three elements: physical components, smart components (IT as an integral part of the product), and connectivity components (additional functions in the product's cloud and its interaction with other devices). Smart, connected products require companies to build and support a new technology infrastructure ("technology stack"). The authors discuss ten strategic choices through which companies may gain competitive advantage. These include choosing between building functionalities into the product or into the cloud, between internal development and outsourcing of smart capabilities and infrastructures, and between the product portfolio itself and disintermediate distribution channels and service networks. The authors also identify pitfalls to avoid, such as adding functionalities for which customers will not pay, underestimating security and privacy risk, or failing to anticipate new, competitive threats with superior technology. |
Porter and Heppelmann |
Porter and Heppelmann focus on the internal perspective and explore how smart, connected products affect functions within companies. Core functions - such as product development, IT, manufacturing, logistics, and marketing and sales - are affected, and new functions - such as data organization or customer success management - emerge. Concerning logistics, the authors state that the roots of smart, connected products are in logistics, and, today, these allow for continuous tracking of products, their conditions, and their surrounding environments, which bears the potential for transformation. Smart, connected products allow companies to move from traditional ownership models to new business models, such as the product-as-a-service model, in which customers pay for the use of a product rather than buying the product itself. To support this new model, companies must learn to track customer usage and satisfaction to adapt marketing and service activities accordingly. |
Ehret and Wirtz |
Ehret and Wirtz use entrepreneurship and transaction cost theories to examine conditions for designing non-ownership business models for the Industrial Internet of Things (IIoT). Entrepreneurship theory, thereby, focuses on the positive form of uncertainty upsides, and outlines opportunities for machine owners to offer assets and outputs as a service. Transaction Cost Theory, on the other hand, stresses that IIoT opportunities enable companies to better manage uncertainty downsides, and encourage users of machines to give up ownership and only purchase the output. The authors identify three types of IIoT-enabled business models: business models for asset-driven IIoT opportunities, business models for service innovation aiding manufacturing, and service-driven business models targeted at end users. Research gaps with respect to IIoT business models are seen in empirical research, revealing evidence about the role of infrastructures, how best to orchestrate human actors and machines, and how best to design the architecture of ownership for the diverse assets needed to provide services. |
Bressanelli et al. |
Bressanelli et al. examine the role of digital technologies (IoT, big data, analytics) as enablers of the Circular Economy (CE) in usage-focused business models. They develop a research framework to describe how eight functionalities of digital technologies affect value drivers for CE. The eight enabling functionalities are: improving product design, attracting target customers, monitoring and tracking product activity, providing technical support, providing preventive and predictive maintenance, optimizing product usage, upgrading the product, and enhancing renovation and end-of-life activities. The research then uses a case study to analyze how these functionalities affect the three CE value drivers: increasing resource efficiency, extending product lifespan, and closing the loop. The findings show that companies need to couple IoT with big data analytics to move to CE. Moreover, four of the functionalities increase resource efficiency and extend product lifespan in the use phase, but do not effect closing the loop. Therefore, to close the loop, companies should focus on functionalities at the start and the end of product life. Research gaps still exist with respect to product-focused and result-focused business models, as well as other digital technologies. |
Rachinger et al. |
Rachinger et al. state that a research gap exists in examining how digitalization impacts business model innovation insofar as empirical insights in this field are still limited. Therefore, they carry out a qualitative investigation, collecting data from 12 informants working in two industries: the media and the automotive industry. In their results, they outline the influences of digitalization on business model elements (value proposition, value creation, value capture) and the associations with dynamic capabilities for both industries. The findings show that digitalization is generally considered important. It is the value proposition itself, as well as the position in the value network, that determine the perceived available options for business model innovation when it comes to digitalization. The study identifies organizational capacities and employee competences as future challenges. |
Annarelli et al. |
Annarelli et al. discuss Product Service Systems (PSS) as a business model focused on providing a marketable set of sustainable products and services to fulfill customer needs. They analyze PSS using the Business Model Canvas and Business Model Innovation Process. Six key elements of a PSS business models are introduced: design of the offering, value co-creation, functional integration with partners, degree of servitization, pre-sale and after-sale value communication, short-term and long-term commitment, and customer retention. Digitalization can make the transition to PSS more scalable, offering gradual servitization of value chains. |
Parida et al. |
Parida et al. propose a research agenda on leveraging digitalization for business model innovation. Their literature review identifies five theoretical perspectives regarding digital business models in the B2B context: resource-based view and dynamic capabilities, transition theory, entrepreneurship, transaction cost theory, and platform theory. They also discuss how digitalization can enable innovation across the three business model elements of value creation, value delivery, and value capture. |
Pflaum and Klötzer |
Pflaum and Klötzer discuss strategic approaches for transforming from product-oriented business models to data-oriented business models. They differentiate two pathways for this transition. First, companies may digitalize their own products and services, turning them into smart products and services. Second, companies may use digital solutions from third parties to make corporate processes more effective, efficient, and agile. A key consequence of transitioning toward a digital business model is that the data produced by the smart product becomes the key asset instead of the physical product itself. Furthermore pipeline-shaped supply-chains are replaced by data-driven and platform-based ecosystems with multiple corporate actors. |
Value Dimensions | Selected Opportunities and Risks for DBMs | |
---|---|---|
Value Creation: What is offered to the customer? | Opportunities |
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Risks |
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Value Delivery: How is the promised value delivered to the customer? | Opportunities |
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Risks |
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Value Capture: How is the value delivered to the customer, transformed into revenues and profits for the firm? | Opportunities |
|
Risks |
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Digitalization in Maritime Freight Transportation
Actors | Responsibilities | Documents |
---|---|---|
Freight forwarder | Appointing the freight carrier | Forwarding contract |
Carrier | Carrying out shipment via road, rail, or inland waterway | Contract of carriage |
Seaport forwarder | Determining the seaports, terminal operator, and shipping company | Issue of bill of lading |
Terminal operator | Handling at the port or terminal (clearance of the freight carrier, temporary storage of goods) | |
Shipping company | Carrying out sea transport, crewing, maintenance, and ship repair; if applicable, drawing up stowage plans for container ships, ship financing | Sea freight contract, presentation of bill of lading |
Shipping broker | Brokering charterer and shipping company (or cargo space and charterer) | Charter parties (BIMCO) |
Port clearance agent | Registering and de-registering ships with the port authorities, handling customs clearance, procuring necessary equipment and provisions, etc. | Various documents for port authorities, customs, and shipping company |
FreightHub's Business Model
4PL providers operating in a maritime context generally seek to minimize costs related with sea freight brokering. FreightHub embarked on this endeavor, too, and currently partners with over 1000 carriers to quickly draw up offers for suitable shipping spaces without the high margins charged by ship brokers. FreightHub provides a central platform, called Single Source of Truth Checklists and AI (SCAI), which serves as an interface covering the complete process: requests for quotations, booking, document management, worldwide real-time tracking of freight, proactive problem solving, and supply chain data analysis. Thus, the entire exchange of communication and flow of information between all involved actors is available in one place. To this end, there is a joint workspace for each specific operation/order, in which the entire order process, including all the relevant documents and various reports, can be displayed with maximum transparency.
With their SCAI platform, FreightHub has developed an internal system that uses new, digital technologies to meet the demand of networked operations. The basis for efficiently organizing the transport process and effectively communicating with the customer is a reliable database founded on real-time information. Customers benefit from proactive communication, particularly in situations where emerging problems can be detected and assessed in advance. This is ensured by having a single point of contact, who accompanies the customer through the entire shipping process.
Increased transparency also reduces complexity. All the data from the internal systems, the transport management system (TMS), the sales department, and business partners converge in one place and are automatically processed. This prevents data silos, which can lead to duplicate sets of data with different time stamps. It also creates very high-quality data. Every employee has real-time access, from any location, to the entire dataset of schedules, pending tasks, and previous communications. Information and documents, from the shipment booking to the delivery of the goods at the final destination, can be viewed and monitored by all employees at the same time. Instead of multiple contact persons, a central point of contact is responsible for supervising the entire transport process, from booking to delivery, and provides assistance for each step. This not only leads to higher employee satisfaction, but also to greater reliability and a better customer experience.
Higher quality data aggregated in a single source also enables fast and uncomplicated data exchange and leads to agility and proactive situation analysis. FreightHub's SCAI system, using AI, makes accurate predictions at an early stage, which leads to proactive problem solving and, in turn, increasingly reliable delivery performance. Among other advantages, the customer particularly benefits from avoiding high delay charges - e.g., through warehouse overloads. Agile dispatch scheduling further enables intelligent re-routing. In sea transport, various complications can occur at loading or discharge ports, which can cost valuable time. In such events, it is difficult for customers to react in time. FreightHub continuously monitors the entire transport chain, and can prevent this from happening. For example, if a customer's warehouse has reached capacity, a FreightHub employee will suggest an inexpensive inland terminal for temporary storage to avoid demurrage and detention.
Digital checklists are used to process all shipments. These checklists are special because they are not only digitized, but also fully automated. Behind the checklists is an intelligent system consisting of more than 80 algorithms. The data is sorted according to urgency, and the system sends a notification if action is required. This ensures that any information requiring immediate attention appears on the screen. The automated processes again lead to data transparency, which enables all parties involved to work together smoothly and without complications. Based on the dual control principle, the system permanently checks incoming data, detects any need for action, and reports this autonomously. FreightHub states that the "most important feature, however, is [its] ability to prioritize and assign tasks to the required hierarchical level before they reach a critical stage. In the event of unscheduled developments, a previously defined responsible person at management level would be notified, whereby the warning can be linked to a defined sequence of appropriate actions". The systematic aggregation of individual data by means of AI effectively assists risk management along the transport chain. In addition, routine, time-consuming tasks, such as filling out forms by hand, are no longer necessary. This makes "every day" work easier, and allows employees to focus on the most important tasks.
SCAI also provides the
option to monitor the supply chain in real time. Through real-time
updates of all shipment schedules, it is possible to track the
whereabouts of each individual shipment. Shipment tracking for sea
transport is carried out via Automatic Identification System (AIS) ship
tracking. The AIS is a data exchange system introduced to improve
shipping safety and enable the exchange of data, at national and
international levels, about passengers, ships entering or leaving ports,
and hazardous or environmentally harmful goods being transported by
ship. The main purpose of introducing AIS is to provide a wider range of
available, continuous, and reliable navigational data. It has become
common practice to use data transmitted by AIS to increase shipping
safety. Apart from being useful for marine traffic control, AIS data can
be a very important source of information for avoiding collisions.
Conceptualization of a 4PL Digital Business Model in Sea Freight Logistics
Comparison of 3PL and 4PL Business Model Elements
Digitalization
has a major impact on maritime freight transport. However, while
logistics services in sea freight are only a small part of an intermodal
transport chain, there is a growing trend toward consumer-oriented,
door-to-door transport being managed from a central source. When
comparing the benefits of outsourcing to a 4PL service provider, such as
FreightHub, with the services of a 3PL service provider, the foremost
difference is that 3PL providers do not have a complete overview of the
supply chain network. Since 3PL service providers rely on their own
assets, it is in their interest to primarily use their own resources to
capacity. In contrast, 4PL service providers, like FreightHub, operate
more neutrally, and try to further reduce interfaces in the supply
chain. To compare FreightHub's 4PL business model with those of 3PLs,
Table 6 applies the business model dimensions of value creation, value
delivery, and value capture.
Table 6. Comparison of 3PL and 4PL business models.
Value Dimensions | 3PL Business Models | 4PL Business Models | |
---|---|---|---|
Value Creation | Opportunities |
|
|
Risks |
|
|
|
Value Delivery | Opportunities |
|
|
Risks |
|
|
|
Value Capture | Opportunities |
|
|
Risks |
|
|
Value Creation, Delivery, and Capture in Sea Freight Logistics
Value Creation
Value Delivery
Value Capture
Conclusions
Contribution, Limitations, and Future Research Avenues
The
present study contributes to theory and practice by refining business
model research in the maritime transportation context, and providing
managerial implications about the opportunities and threats of a digital
transition in this industry. However, despite its valuable insights,
this study has some limitations, which may be addressed by future
research. While aiming to complete the picture of how digital business
models may impact maritime freight transportation, it was not possible
to extensively consider all parts of the SC while analyzing FreightHub's
documentation. Another limitation found in qualitative research, is the
limited number of cases, which prevents the findings from being
generalized. This limitation is explained by small and idiosyncratic
samples within case studies, where data is predominantly non-numerical,
thus leaving little chances to establish the probability that the data
is representative of some larger population, or for the other branches. This limitation implies the generalizability of the research
findings being limited, which was also highlighted by Chiarini, who
used a case study within a SME with lean production at an early stage
of application. Therefore, future studies in other business models or
organizational situations must test these results using survey research.
Additional investigations of the links between the developed
conceptualization and classical management theory will also more fully
define the connections between the connections between the constructs
evaluated in this paper. Future research might also tackle the link
between business models and scenario analysis to further inform
transformation pathways in this context.