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Received: 2023-01-18 | Accepted: 2023-05-08 | Published: 2023-06-30

Title

Innovation of the production process of engineering companies in relation to business portfolio

Abstract

The paper is aimed at the innovation process in the context of the business portfolio of micro-enterprises. This type of companies is typical of and prevalent in the southern region of the Czech Republic, and the presented conclusions have general validity. A newly developed method of assessing the innovative technological potential of enterprises called "Business technology assessment system" (BTAS), with the contribution of "Criteria analysis of systems". The research answers the question, what economic efficiency can innovations in the production process bring to SMEs dealing with custom manufacturing in the engineering sector. Technological backwardness including corporate infrastructure was proven. Companies compensate for this shortcoming by an increased focus on satisfying customer needs and a high degree of flexibility and innovation in production. From the point of view of production processes, there is a high degree of interconnectedness between individual operations and sub-processes. The business portfolio of most of these companies is disproportionately broad, and this is reflected in the negative findings in terms of the disproportionate number of methods and technologies that these companies possess, but do not fully utilize. Such behaviour of the companies can be explained by the absence of active creation and updating of business strategy. The economic evaluation of the innovative process (BTAS) proved that the very implementation of innovations did not lead to a major increase in the profit margin. The situation was different when evaluating the benefits of the digitization process, which brought an increase in sales and corporate margins. A completely new finding has been demonstrated, i.e., if a company has unused equipment which brings opportunity costs as well, it is possible to create space for innovation by removing it, and at the same time the sale of equipment can be a significant financial contributor to innovation.

Keywords

strategic management, innovation, industry production process, BTAS

JEL classifications

M11 , M21 , O14

URI

http://jssidoi.org/jesi/article/1083

DOI

DOI 10.9770/jesi.2023.10.4(8)

Pages

118-134

Funding

This paper has been prepared as a part of internal research competition at the department of management for 2022 entitled: "A new approach in the generation of corporate (business) strategy based on the parameterization of business processes". PID: IVSUPS004.

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Talíř, Milan

Brno University of Technology, Brno, Czech Republic https://www.vutbr.cz

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Straková, Jarmila

Institute of Technology and Business in České Budějovice, České Budějovice, Czech Republic https://www.vstecb.cz

Articles by this author in: CrossRef | Google Scholar

Journal title

Entrepreneurship and Sustainability Issues

Volume

Number

Issue date

June 2023

Issue DOI

DOI 10.9770/jesi.2023.10.4

ISSN

ISSN 2345-0282 (online)

Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Article views & downloads

HTML views: 666 | PDF downloads: 359

References

Al-Omoush, K. S., Ribeiro-Navarrete, S., Lassala, C., & Skare, M. (2022). Networking and knowledge creation: Social capital and collaborative innovation in responding to the COVID-19 crisis. Journal of Innovation & Knowledge, 7(2), 100181. https://doi.org/10.1016/j.jik.2022.100181