Page 271 - ISC PROCEEDINGS 21.4

Recent practical developments indicate that many Vietnamese private enterprises
have proactively implemented business model innovation, particularly through e-
commerce, digital financial services, and online platform applications. These models have
facilitated broader distribution channels, accelerated customer access, and enhanced
integration into global value chains. Nevertheless, implementation remains constrained
by institutional limitations, managerial capability gaps, restricted access to capital, and
shortages in high-quality digital human resources. Such challenges have diminished the
overall effectiveness of innovation efforts, preventing many firms from fully capitalizing
on the opportunities presented by the digital economy. Against this backdrop, a
comprehensive analysis of the current conditions and key drivers of business model
innovation within Vietnamese enterprises is of both academic and practical significance.
Such analysis contributes to evidence-based policy recommendations aimed at unlocking
the full potential of the private sector, thereby improving firm-level performance and
strengthening national competitiveness in the digital era.
2. Theoretical background
2.1. Business model innovation
Business model innovation (BMI) refers to the process through which firms redesign
or transform their existing business models to adapt to competitive environments and
exploit emerging opportunities. According to Teece (2010), BMI extends beyond
incremental improvements; it involves a comprehensive reconfiguration of how firms
create, deliver, and capture value, thereby transforming technological innovation into
economic advantage. In this sense, the business model functions as a dynamic mechanism
that enables firms to identify, shape, and commercialize innovative opportunities. Foss
and Saebi (2017) conceptualize BMI as encompassing both modifications to existing
business model components and the design of entirely new configurations. More
importantly, they emphasize that BMI is a complex organizational process requiring the
integration of innovation capabilities, strategic alignment, and industry context. Similarly,
Zott and Amit (2010) argue that BMI should not merely be viewed as a reactive response
to market changes, but rather as a deliberate and transformative strategy capable of
reshaping value creation mechanisms. Despite its strategic potential, BMI faces significant
barriers, including managerial cognition constraints, limited organizational resources, and
institutional rigidities (Chesbrough, 2010). These challenges are particularly pronounced
among small and medium-sized enterprises (SMEs), which often operate under financial
and capability constraints that hinder large-scale transformation initiatives.
2.2. Firm performance
Within the field of strategic management, firm performance remains a central
construct, reflecting an organization’s ability to achieve its objectives while sustaining
long-term development. Dess and Robinson (1984) suggest that performance
measurement should not rely solely on objective financial indicators such as profitability
or revenue growth. In many contexts, subjective managerial assessments provide
complementary insights, particularly when financial data are limited or undisclosed.
Venkatraman and Ramanujam (1986) broaden the performance construct by
incorporating non-financial dimensions, including market share, customer satisfaction,
and innovation capability. This multidimensional perspective highlights that performance
is not confined to short-term financial outcomes but also encompasses adaptive capacity
and sustained competitive advantage. Combs et al. (2005) further categorize
organizational performance into three primary dimensions: financial performance,

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