This document discusses assessing strategic capacity for eco-innovation in business models for small and medium enterprises (SMEs) in the hospitality industry. It defines a business model as articulating value creation for customers and obtaining a competitive position. Strategy is defined as strategic objectives in light of resources. The document examines key elements of a business model that could be transformed through eco-innovation, including partnerships, activities, resources, cost structure, relationships with customers, communication channels, value propositions, and revenue streams.

1. Assessment of Strategic Capacity
ECOMODE - Fostering Eco - Innovative
Business Model Development in SMEs in
Hospitality Industry
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

2. Eco-innovation should concern all areas of your business model. Before
analysing the different elements to focus on in transforming SMEs, let's
start by defining a business model and a strategy.
“A business model articulates the logic of value creation for customers,
how the firm can be organised to best meet its customers’ needs, get
paid, and make a profit. Strategy defines strategic objectives in light of
environmental characteristics and available resources and delineates the
initiatives and policies necessary to obtain a sustainable competitive
position.”*
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Business model and strategy for
eco-innovation
*Vedovato, 2016.

3. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

4. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Key partners
When thinking about transforming a company in the perspective of eco-
innovation, it's very important to consider the partnerships: sometimes
it is necessary to find new suppliers and establish new relationships.
Partnerships are very important when it comes to share costs, seek for
complementary expertise, find different technologies and knowledge,
collaborate in an innovative network, especially in the fields of
sustainable mobility, waste regeneration and ICT-based projects.

5. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Reflection
Questions that may arise in this context to be analysed are:
- Do I need new partnerships to work on my eco-innovative idea?
- Who are my critical suppliers?
- Can I rely on new suppliers that are more eco-innovative?
- What type of partnerships would best suit my ecological needs?
Take a moment to reflect upon these questions.

6. Key activities represent the core business of your company and in this
area there could be numerous innovations to introduce, particularly
referring to R&D sector and product/process development.
Shifting to eco-innovative activities may concern: offering green value-
added products and more efficient services, relying on renewable energy
based systems, and gain higher efficiency in the product/process
development.
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Key activities

7. Reflection
And now reflect on these questions:
- What kinds of activities are crucial to my business?
- Which of them can be transformed to guarantee a more sustainable
approach?
- What kinds of activities are important to attract new eco-responsible
customers?
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

8. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Key resources
Every company needs to have access to resources to run its business; we
can distinguish different types of resources: material (buildings, vehicles,
devices, systems...), intellectual (patents, copyrights, alliances or the
customer database), human (employees), financial (cash, deposit,
credits, loans...).
In this area the first step is to understand how you can obtain a more
efficient management of resources and how you can save them. Waste
regeneration is a good example of this, which limits your ecological
footprint avoiding the extraction of natural resources. Also ICT can help
in resource use optimisation and saving.

9. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Reflection
Can recycling generate new streams of secondary resources?
Yes
No
Are customers interested in knowing about the origin of
resources used in products and the social and environmental
impacts of resource use across the supply chain?
A few customers
More and more customers
Not at all

10. The financial aspect is very important in every business and in some
cases eco-innovation is responsible for high initial investments. But often
environmental benefits include managing to reduce internal costs or
consumption of materials, or procure products that are more energy and
resource-efficient or have a longer lifetime.
Reflection
Have you considered the initial costs of an eco-innovative investment?
How much would you save with more efficient energy supply?
Can an improved resource productivity save money by
reducing costs of material and energy?
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Cost structure

11. This aspect involves the type of the relations between a company and
each customer segment, which is a crucial factor for every business.
Reflection
Please reflect upon these questions:
How can environmental considerations become integrated into
customer relationships and integral to our business model?
Can you engage existing and potential customers to receive positive or
negative feedback about your eco-innovative ideas?
Can self-service and automated services be implemented in your
business?
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Relation with clients

12. Channels are customer touch points that play an important role in the
customer experience. There are five channel phases:
- awareness
- evaluation
- purchase
- delivery
- after sales.
Companies need to address environmental aspects at all stages of the
customer experience.
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Communication channels

13. A clear communication about the green values of a product/service raise
environmental awareness within customers. True or False
Greener customers are influenced by recommendations of
trusted peers and third parties. True or False
Through a market research we can highlight important areas of
environmental concern related to existing or new eco-innovative
products, services or technologies. True or False
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Reflection - Communication
channels

14. Value proposition describes the benefits customers can expect from
your products and services. The value proposition provides value
through various elements: newness, performance, customization,
getting the job done, design, brand/status, price, cost reduction, risk
reduction, accessibility, convenience/usability.
Have you ever thought about the green value does your new product,
service or technology deliver to your customers?
What are the emerging trends that may influence your value proposition
in the short- and long-term?
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Value propositions

15. Revenue streams are related to the profit a business gets from the
revenue deriving from each business model element described above .
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Revenue streams

16. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.