Competition intensity and business model innovation: The distinctive role of strategic innovation readiness in European family and non-family SMEs

This study proposes and tests a model that extends the knowledge of business model innovation (BMI)'s drivers, introducing strategic innovation readiness (SIR) as a fundamental mediating mechanism. Drawing on the Resource-Based View theory and the Socioemotional Wealth approach, we test the contingent effect of family firm on this model. Data were obtained from an international European Commission project to assess the relationships proposed. A sample of 417 Small and Medium-sized Enterprises was analyzed using partial least squares structural equation modelling. The results indicate that competition intensity positively influences both BMI novelty and BMI scope, with SIR acting as a partial mediator in these relationships. A significant contribution of our multigroup analysis is that the indirect effect of competition intensity on BMI via SIR is stronger in non-family SMEs than in family SMEs. In addition, for non-family firms, SIR fully mediates the competition intensity-BMI scope relationship, whereas for family firms, this mediation is partial. These findings underscore that while both firm types need SIR to innovate, non-family firms exhibit a more pronounced and fully mediated response in broadening their BMI, suggesting distinct strategic pathways driven by inherent firm characteristics. These insights advance the BMI literature, particularly concerning the unique innovation dynamics of family versus non-family firms.