Research Cites Keys to Integrating New Business Services

Anuja Gupta

Anuja Gupta

To keep up with an evolving business landscape, savvy business owners will sometimes add a new service to an existing business model to expand a company. But it’s not as easy as seamlessly fitting a new piece into the overall puzzle.

In her latest study, Anuja Gupta, an assistant professor of management at the Rutgers School of Business–Camden, warns business owners to not underestimate the difficulties involved in integrating new and old services.

“It creates significant challenges, especially when firms have to adapt their routines in a big way,” says Gupta, whose article on the topic, “Redesigning Routines for Replication,” will be published in a forthcoming edition of the Strategic Management Journal.

“To seek growth, companies need to replicate their operations,” says Gupta, who explains that fast food chains, for example, are adept at applying an established, successful business model to locations all over the country.

“As these companies grow, they replicate and refine their model over time to learn from past growth and thus improve upon it,” she says. “It’s a formula; a way to grow fast and do it better than the competition.”

However, the Rutgers University–Camden scholar says business managers not well-versed in a new business venture may be unfamiliar with the implications the new service may have on the existing model.

Gupta and two research colleagues performed a study of a quick printing company that sought to expand its business by also printing custom, large-scale banners and signs. The company consulted with a small firm that specialized in printing banners.

“The two businesses were very different on many dimensions and it proved unsuccessful for the quick printing company because it couldn’t simply use its existing resources and processes,” Gupta says. “If I were giving advice to a business manager, I’d tell them that to add something completely new, you have to throw away your old way of thinking to adapt the business to the new model.”

That’s not to say that business should abandon the idea of adopting a new service altogether.

Gupta points to well-known electronics and appliance stores that have added repair services to their retail venture as one example of businesses that expand on existing models without disrupting their primary goal.

She says business managers must first understand how the new service works, what costs it will incur, and “design new routines up front so they can fit into the existing set of routines.”

“Businesses must evolve to stay relevant,” Gupta says. “The need to change is there. Companies do it all the time, but they must first understand that it is a complex process and managers need to approach it with a very open mind and with the right incentive system in place.”

Gupta, a Princeton resident, teaches courses in strategic management and global business strategy at the Rutgers School of Business–Camden. She has presented her research at top global conferences and is an active member of the Academy of Management and the Strategic Management Society.

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