Knowledge Management Research & Practice

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Improving entrepreneurial knowledge and

business innovations by simulation-based
strategic decision support system

Min-Ren Yan

To cite this article: Min-Ren Yan (2018): Improving entrepreneurial knowledge and business
innovations by simulation-based strategic decision support system, Knowledge Management
Research & Practice, DOI: 10.1080/14778238.2018.1442994

To link to this article: https://doi.org/10.1080/14778238.2018.1442994

Published online: 05 Mar 2018.

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Knowledge Management Research & Practice, 2018
https://doi.org/10.1080/14778238.2018.1442994

ORIGINAL ARTICLE

Improving entrepreneurial knowledge and business innovations by

simulation-based strategic decision support system
Min-Ren Yan
Institute of International Business Administration, Chinese Culture University, Taipei, Taiwan

ABSTRACT ARTICLE HISTORY

In the globally competitive environment, open business innovations have become one of Received 18 December 2017
the essential strategies for enterprises to develop competitiveness and market potential. Revised 22 January 2018
However, the execution of innovative business model and dynamic management decision Accepted 16 February 2018
support requires a systematic development enabling the rationale of strategic decisions. KEYWORDS
Since knowledge assets are key value drivers for company’s competitiveness, the strategic Entrepreneurship;
management of entrepreneurial knowledge and business innovations would be critical for the innovation; strategy;
success of business practices. To enhance strategic planning capability with entrepreneurial business model; knowledge
knowledge and innovations, this paper integrates the principles of innovations and System management; decision
Dynamics methodology to develop a Simulation-based Strategic Decision Support System support; simulation
(SSDSS) for innovative business development. Two real world case studies with empirical data
are benchmarked to examine the effectiveness of SSDSS applications in supporting strategic
planning and innovation-driven business development. Iterative computer simulations
and scenario analysis were adopted to demonstrate the utilisations of market-oriented and
sustainability-oriented innovations to improve operating performance by creating market value
and shared value to the customer and the society.

1. Introduction proposed, such as Balanced Scorecard (BSC), Knoware

Tree and knowledge assets dynamics value map
In the globally competitive environment, open business
(KAVDM) (Schiuma, Carlucci, & Sole, 2012; Schiuma,
innovations have become a critical strategy for enter-
Lerro, & Carlucci, 2005). Since the importance of under-
prises to develop competitiveness and market potential.
standing the role of knowledge assets to organisation’s
However, in the process of innovations and business
performance objectives and strategic value propositions
development, in addition to technological innovations,
have been identified (Carlucci & Schiuma, 2007, 2008),
product/services and business model innovations com-
innovations and strategic resources should be better
prising the values of the social, environmental, and sus-
equipped with entrepreneurial knowledge and business
tainable development have been highlighted as a new
strategies that drive organisations towards their value
generation of business innovations in recent years. To
creations targets. Previous studies have proposed that
this greater vision, entrepreneurial thinking and stra-
a macro process of knowledge management for con-
tegic planning comprising innovation-driven business
tinuous innovation is required (Xu, Houssin, Caillaud,
development would encourage enterprises to redefine
& Gardoni, 2010). Firms which develop better knowl-
the concept of products and services, markets, customer
edge process capabilities can innovate better (Kamasak,
value chain and local clustering development.
Yozgat, & Yavuz, 2017). Learning and knowledge man-
As a driving force to innovations, entrepreneurial
agement through the process of innovation and strategic
thinking focused on transforming opportunity into
business development are significant enablers to firm
reality and the creation of social and economic values.
performance (Presbitero, Roxas, & Chadee, 2017; Roxas,
Therefore, entrepreneurial knowledge and practices are
Battisti, & Deakins, 2014; Venkitachalam & Ambrosini,
core elements to support innovations. Knowledge assets
2017).
have been recognised as key drivers for value creation
While entrepreneurial knowledge and practice have
that improves a company’s competitiveness. Scientific
been emphasised, design thinking and innovations
frameworks for visualising the relationships between
in diverse business models are increasingly adopted
knowledge assets and strategic value objectives were

CONTACT  Min-Ren Yan  mjyen@sce.pccu.edu.tw

© Operational Research Society 2018
2   M.-R. YAN
for building sustainable advantage in a marketplace
(Chesbrough & Schwartz, 2007; Sorescu, Frambach,
Singh, Rangaswamy, & Bridges, 2011). As an accelera-
tor of ideas generation, design thinking could be recog-
nised as a method for developing innovative solutions
for complex problems, by deliberately incorporating the
concerns, interests, and values of humans into the design
process (Brown, 2009; Meinel & Leifer, 2011). Design
thinking aims to rapidly develop and test multiple pos-
sible solutions to the needs, including economic and
social values (Brown, 2008; Denning, 2013; Geissdoerfer,
Bocken, & Hultink, 2016). In addition to ideas genera-
tion, a business model can be defined as “the rationale
of how an organisation creates, delivers and captures
value” (Joyce & Paquin, 2016; Osterwalder & Pigneur,
2010). Teece (2010) proposed that “A good business
model yields value propositions that are compelling to
customers, achieves advantageous cost and risk struc-
tures, and enables significant value capture by the busi-
ness that generates and delivers products and services”.
For both economic and social value, a wide range of
business model innovation or frameworks have been
proposed (Chesbrough & Rosenbloom, 2002; Joyce &
Paquin, 2016; Osterwalder & Pigneur, 2010; Richardson,
2008; Teece, 2010; Tukker & Tischner, 2006; Upward
& Jones, 2015; Zott & Amit, 2010). Previous studies
have proposed that business model innovation links
business aspirations and the platforms for reality and
success (França, Broman, Robèrt, Basile, & Trygg, 2017).
A product-service systems (PSS) approach has been pro-
posed as an opportunity for promoting sustainability
and strategic business model development (Manzini
& Vezzoli, 2003; Tukker, 2004, 2015). PSS reconsiders
the delivery of functional value to end-users through
an integrated mix of product and service (Mont, 2002;
Tukker, 2004).
Regarding the aforementioned framework of business
model development, five core components of a business
model have been identified, including value proposition,
technology system, customer segmentation, costs and
revenues, and connection with customers (Yun, Yang,
& Park, 2016). However, even though the entrepreneur-
ial thinking and business model development could be
facilitated by existing methodologies, framework of stra-
tegic planning for the execution of innovative business
model and dynamic management decision support was
limited. The strategic management of entrepreneurial
knowledge and business innovations would be critical
for the success of business practices.
To enhance company’s strategic planning capability
and business performance with entrepreneurial knowl-
edge and innovations, this study combines the principles
of innovations and System Dynamics methodology to
develop a Simulation-based Strategic Decision Support
System (SSDSS) for innovative business development.
SSDSS could be a management flight simulators (MFS)
for supporting the simulations of complex operational
and strategic issues in businesses and other organisa-
tions. The model could be a learning tool that allows
managers to conduct experiment with various strate-
gies, and learn from simulated decisions in a designed
learning environment that allow failure and reflection.
Simulation-based strategic scenario analysis thus can
improve stakeholder’s mental models and entrepreneur-
ial knowledge for innovative business development.
2.  The strategic architecture
To improve entrepreneurial knowledge and business
innovations, a systematic understanding of strategic
planning and dynamic capability is important. Previous
studies have proposed the importance of dynamic capa-
bility to firm performance in the changing business envi-
ronment (Mu, 2017; Pisano, 2017; Ringov, 2017). It is
especially true in an innovative business model and early
stage entrepreneurial business developments.
In this paper, System Dynamics (SD) methodol-
ogy is adopted to utilise the functions in simulations
and dynamic scenario analysis. Previous studies have
acknowledged that SD is a simulation enabled meth-
odology to modelling complex systems with consid-
erations of interactive influencing factors (Yan, 2015;
Yun, Won, Park, Yang, & Zhao, 2017). By focusing on
strategic management with the principles of SD meth-
odology, Warren (2005) proposed Strategy Dynamics
approach that integrates simulation model-based man-
agement and resource-based view for analysing a firm’s
strategy and resource utilisation that drive business
performance over time. As an integration of the meth-
odological framework to enhance the analytic capability
for strategic innovations and business developments, the
proposed SSDSS is shown in Figure 1. The proposed
model indicates that a firm’s strategic outcome as well
as business performance could be the results of inno-
vations, business development, and resource-based
management decisions over time. Since performance
reflects the state of business resources utilised, this
study supports a systematic evaluation for time-phase
performance with anticipated resources. In addition,
the strategic architecture of SSDSS is enabled to cover
the feedback structure of interrelated critical variables
among innovations, business model development, tech-
nology adoption, consumer awareness, and business
economics. The field of strategic management and inno-
vation are eager for dynamic theories that explain the
evolution of performance differences among different
business models and are increasingly looking to mana-
gerial decision-making as the source of dynamics (Yan,
2017). Therefore, the strategic architecture contributes to
address dynamics and systematic decision-making with
business model innovations. As shown in Figure 1, the
proposed SSDSS functions for strategic planning with
simulations. The relationships between variables and a
 KNOWLEDGE MANAGEMENT RESEARCH & PRACTICE   3

Figure 1. The framework and applications of the proposed SSDSS.

firm’s strategic outcomes are modelled based on three
fundamental principles: (1) business performance at
any time depends on resources, management decisions,
and external factors, (2) customers in different level of
awareness could be accumulated and depleted over time,
(3) the increase and decrease of customers are modelled
as inflows and outflows depending on existing resource
levels, management decisions, and external factors. The
aforementioned three elements constitute the strategic
architecture that explains how any innovation functions
and performs over time.
The frameworks can be used to improve business per-
formance, as part of a complete strategy for innovations.
To evaluate the impacts of various innovations on busi-
ness developments, the market response and the cus-
tomer awareness can be recognised through a series of
states (different level of customer awareness). As shown
in Figure 2, even though that active customers and loyal
customers were developed from potential customers,
they are moved through a number of stages at different
level of awareness. Therefore, a strategic architecture is
integrated to explain the relationships between market
environment, business innovations, and customer devel-
opment. Most importantly, enablers from product and
service innovations, marketing & promotions, and busi-
ness development strategies could be systematically eval-
uated and their impacts to different stages of customer
could be specifically analysed with the proposed SSDSS.
To promote any business innovations on new prod-
ucts or services, the marketing challenge is to move
consumers through a series of stages until they become
buyers of the product/service. Management may have

Disadvantageous factors affecting the outflows of customer base

Disregarded Loyal
Note: The strategic factors Customers
architecture is a generic
structure. Possible Disloyal
feedback structure Customers Become loyal per
could be customized by time unit
specific cases Informed
Customers First time buyers
per time unit
Aware
Customers Become informed
per time unit
Unaware
Customers Become aware per
Change of Market
Demand time unit
Enablers from Product and Service
Innovations, Marketing & Promotions,
External Factors from Economic Condition, and Business Development Strategies
Market Structure, Competition,
Technological Change, and Others

Advantageous factors promoting the inflows of customer development

Figure 2. The conceptual strategic architecture of business innovations and market development.
4   M.-R. YAN
a budget to split across four categories of spending:
(1) innovations and marketing on building customer
awareness; (2) communicating the brand’s values to
catch consumers’ interest; (3) promotions to persuade
interested consumers to purchase; and (4) loyalty pro-
motions to persuade consumers to purchase only this
brand. Therefore, the proposed SSDSS is important
because it helps to effectively utilise the investment of
innovation and marketing on the most critical parts of
customer developments. To identify the total revenue
streams, active customers could be divided into two
groups: “loyal” consumers, who always purchase the
brand when they need the product or service, and “dis-
loyal” consumers, who purchase between this brand and
its competitors.
This framework covers business customers and is not
limited to consumer markets or commercial cases. The
framework is useful in a wide variety of cases because
it captures how people move between states of mind, a
phenomenon that arises in numerous situations. Based
on the proposed model and simulation technique, the
longitudinal patterns of firm growth with various inno-
vations and business models could be illustrated and
analysed.
3.  Model-based case study with improved
entrepreneurial knowledge
In this section, two real world case studies are bench-
marked to examine the effectiveness of SSDSS
applications in supporting strategic planning and inno-
vation-driven business development. In depth interviews
with the executive managers were conducted to clarify
the business model innovations in practices. Empirical
data, iterative computer simulations, and scenario anal-
ysis were adopted to demonstrate the applications of the
proposed SSDSS that utilises market-oriented and sus-
tainability-oriented innovations to improve operating
performance by creating market value and shared value
to the customer and the society.
Various scenario analyses were conducted in the case
studies, while scenarios represent integration of possible
future development and chosen type of reaction (strat-
egy) to the development. In this way, scenarios become
the part of strategic planning increasing flexibility and
exploitability. Involvement work with scenarios into reg-
ular strategic planning and decision-making process is
the way to preserve performance and competitiveness
of organisations even if the environment shows unpre-
dictable turbulences.
4.  Case A: improving market-oriented
business innovations
This section takes a tea brand company for a case study
and demonstrates that how the proposed SSDSS helps
business innovations and market development. The
benchmarked Ten Ren Tea Group is the only one tea
company whose IPO’s officially began trading and
passed FSSC22000, HACCP, ISO9001 in Taiwan. With
the philosophy of “Old Business, New Management”, the
company concentrates on the product, store and organi-
sation innovations. Ten Ren Tea Group operates for more
than 10 billion NTD revenue annually from hundreds of
retail stores worldwide, comprising four business units
including Ten Ren’s tea retailing store, cha FOR TEA
chain-store restaurant, cha FOR TEA ToGo tea shop,
and CHAFFEE store. The company continues to build
on its sustainable competitive edge, excellent customer
service and a breakthrough culture, which aims to leave
a lasting legacy of innovation in the tea industry.
4.1.  The challenges of product and service
innovations for chain-store restaurants
Based on the strategic architecture of market develop-
ment, the characteristics and number of customers in
different stages have been identified. It was founded
that, even though the chain-store restaurants have estab-
lished steady level of customers and satisfaction, reve-
nue growth was stocked in the recent two years due to
fast-moving products and fiercely competitive environ-
ments. Business development and promotion strategies
in different stages are thus reviewed as the guidance for
actions, such as public advertising, B2B credit card, app
coupon, VIP services and etc. The company has iden-
tified opportunities and the challenges that the large
amount of potential customers were promoted to aware-
ness stage without further consumption. In the case
study, the estimated number of customers (including
loyal and disloyal customers) is approaching to 0.2 mil-
lion, while the estimated number of potential customers
is more than 1.8 million. The market potential could be
a dramatic growth if all the estimated future customers
are effectively accessed. Therefore, the stock of aware
customers without purchasing was identified as one of
the bottleneck for revenue growth. Strategies to enhance
the inflows from potential customers to loyal customers
have to be developed and tested by simulations.
4.2.  Evaluating the impacts of service and
marketing innovations with different strategies
To the target market, the company initiated some busi-
ness strategies through service and marketing innova-
tions. The rationale of innovations and strategic planning
as well as entrepreneurial knowledge is improved with
the simulation-based scenario analysis supported by
SSDSS.
The first strategic planning of the company (strategy
A) focused on target market segment of business lunch
and identified the target customers working in the bank-
ing and international trade industries from commercial
area. Abundant strategic alliances with diverse banks and

international traders were connected and strengthened
by B2B credit card consumption, business coupon, and
app coupon. This strategy focused on two major ideas
that strategic alliance could extend the customer con-
tacts with broader channels and could utilise the estab-
lished bank members with higher commitment from
the alliance. The scenario analysis and simulation results
suggest a two-year path of revenue growth, while the first
year revenue is not significantly increased. Most of the
potential customers will be promoted to buyers, while
disloyal customers are estimated 47.44% increased and
loyal customers are estimated 22.04% increased after two
years. For three years estimation, 66.42% disloyal cus-
tomers increased and 37.04% loyal customers increased.
Consequently, 10.3% cumulative profits increased after
two years and 16.9% cumulative profits increased after
three years could be estimated based on the data of oper-
ating cost and revenue (as shown in Table 1).
An alternative strategic planning of the company
(strategy B) focused on reinvestigating the menu and
service process redesign to satisfy customer’s choices and
fast-moving consumption. Conventionally the menu
was designed only for set meal but the new strategy tries
to propose more flexible choices of dishes to the custom-
ers. According, the estimated average consumption per
customer will be increased from 438NTD to 500NTD
(14%), while the operating cost per customer will also be
increased from 199NTD to 220NTD (10.5%). After the
redesign of the menu and the service package, the unit
price and the estimated operations cost are increased but
the simulated business performance suggest the feasi-
bility of this new branding and repositioning strategies.
Even though the overall operations cost is increased as
expected, the revenue streams could be significantly
increased and the expected profit could be even higher
than the conventional business model. With this strat-
egy, disloyal customers are estimated 42.34% increased
and loyal customers are estimated 19.10% increased
after two years. For three years estimation, 59.55% dis-
loyal customers increased and 32.79% loyal customers
increased. The two years and three years cumulative
profits will be increased by 27.2 and 34.1%, respectively.
As shown in Figure 3, the longitudinal patterns as
well as the estimated performance over time could be
Table 1. Impact analysis of innovations and strategies in promoting market development.
Impacts on the customers
gained in 2 years
Strategy A • Focus on increasing brand +47.44%
image by mass advertising and +22.04%
values advertising
• Cold calling
• Website and sales visiting
Strategy B • Focus on investigating new +42.34%
customer and trial promotions +19.10%
• Balance others
• Sample testing, coupon and
discount
KNOWLEDGE MANAGEMENT RESEARCH & PRACTICE   5
explained in the process of the entrepreneurial ideas and
strategic planning. X-axis represents time unit (month)
in this study. Y-axis represents the key measurable per-
formance concerned by the managers, such as revenue,
marketing cost, customer in each stage of mind, and
cumulative profit in this study. The longitudinal pat-
terns are the kinds of results we might expect from using
SSDSS, while running the model multiple times with
changes in managerial policies or other key influences.
5.  Case B: improving sustainability-oriented
business innovations
To demonstrate the sustainability-oriented innovations
and business development with innovative green sup-
ply chains, this section takes a 70 billion NTD annually
paper printing and publishing industry as the example.
Towards the concept of sustainability, even though the
green consumption and UPM green paper product inno-
vation have been a global trend in the international com-
munity (UPM annual output already reached 10 billion
euros), Taiwanese market is still in the early stages of
development for such sustainability-oriented innova-
tions and thus requires more entrepreneurial thinking
and promotions strategies.
5.1.  The Challenges of product and service
innovations for new market segment
Analysis of the global printing market shows that the tra-
ditional ink printing market registered an annual decline,
whereas other digital printing industries exhibited an
increasing trend. The publishing and printing market
will continue to decline as increasingly more printing
companies convert to digital printing. The printing
industry in Taiwan is rapidly advancing toward open
competition, digitisation, and network integration. Due
to the vigorous development of the digital printing tech-
nologies and the reduction of printing equipment and
consumable costs, more vendors in the printing indus-
try will turn to specialising in digital printing, invest in
relevant software systems in response to the prevalence
of cloud services, and transform their business model to
keep in line with the future consumption trend.
Impacts on the customers Impacts on Impacts on
gained in 3 years 2 years profits 3 years profits
+66.42% Increased by Increased by
+37.04% 10.3% 16.9%
+59.55% Increased by 27.2% Increased by 34.1%
+32.79%
6   M.-R. YAN
Figure 3. Simulated results of strategic business model innovations and key performance.
To respond the changing market, an urgent demand to
new product and service should be fulfilled by business
innovations with new technology and market. Based on
the five-stage strategic architecture of market develop-
ment, around 90 business customers and 10,300 poten-
tial business customers have been identified. Business
development and promotion strategies in different stages
are also established as the guidance for actions, such as
Google Adwords, mass-media advertising, remarketing,
exhibition, coupon, service, free tours and etc.
5.2.  Evaluating the impacts of business
innovations with different strategies
In the existing market, the company provides FSC-COC
papers (products made from responsibly managed for-
ests) and develops new service skills such as FSC-COC
integrated printing system, enabling the company to
cooperate with FSC-COC approved printing factories
to collectively receive orders from terminal customers
or publishing companies. Therefore, the company can
determine the types of papers customers need and earn
relatively more reasonable profit, while promoting an
integration of up- and downstream functions. Regarding
new markets, the company established a new affiliated
enterprise to be in charge of assisting printing companies
or timber/forestry companies to acquire FSC-COC cer-
tification. During this process, the company can engage
with multiple printing-related companies or timber-pro-
ducing companies, which can not only facilitate new
business development but also access new paper-related
business opportunities. Regarding new technological
markets, the company plans to set up a certification
system to develop new smart businesses such as an eco-
logical mattress, which is made from reusing of fibres in
plant cultivation, thereby advancing toward diversified
management.
In the scenario analysis, we test three strategies with
the aforementioned innovations. The first strategy
focuses on increasing brand image by mass advertising
and values advertising to the potential 10,000 business
customers, while the relationship with existing cus-
tomers is not emphasised. The second strategy focuses
on investigating new customer and trial promotions.
The target customers in aware and informed stage are
emphasised in transforming business opportunity to
reality. The third strategy focuses on loyal customers
and loyalty promotions. High value added products
and services to existing business customers are empha-
sised with the expectation of relationship enhancement
and value chain collaborations. As shown in Figure 4
and Table 2, the impacts of innovations by different
strategies in promoting market development could
be demonstrated and analysed. The simulation results
suggest that, for strategy A, 111.28% disloyal customers
increased and 47.04% loyal customers decreased after
two years, while 103.79% disloyal customers increased
and 54.42% loyal customers decreased after three years.
Consequently, 30.67% cumulative profits increased
after two years and 6.41% cumulative profits decreased
after three years could be estimated based on the data
of operating cost and revenue. The simulation results
for strategy B suggest that 33.37% disloyal customers
increased and 106.43% loyal customers increased after
two years, while 14.58% disloyal customers decreased
and 50.28% loyal customers increased after three years.
 KNOWLEDGE MANAGEMENT RESEARCH & PRACTICE   7

Figure 4. Simulated results and key performance comparison of different strategies.

Table 2. Impact analysis of innovations and strategies in promoting market development.

Impacts on the number of Impacts on the number of Impacts on Impacts on
customers gained in 2 years customers gained in 3 years 2 years sales 3 years sales
Strategy A • Focus on increasing brand +111.28% +103.79% Increased by Decreased by
image by mass advertising and −47.04% −54.42% 30.67% −6.41%
values advertising
• Cold calling
• Website and sales visiting

Strategy B • Focus on investigating new +33.37% −14.58% Increased by Increased by

customer and trial promotions +106.43% +50.28% 70.56% 30.60%
• Balance others
• Sample testing, coupon and
discount

Strategy C • Focus on loyal customer and −29.35% −48.69% Increased by Increased by

loyalty promotions +76.05% +47.36% 71.53% 63.12%
• Decreased expenditure on
mass advertising
• More customer events

Consequently, 70.56% cumulative profits increased after
two years and 30.6% cumulative profits increased after
three years could be estimated. For Strategy C, the sim-
ulation results suggest that 29.35% disloyal customers
decreased and 76.05% loyal customers increased after
two years, while 48.69% disloyal customers decreased
and 47.36% loyal customers increased after three years.
Consequently, 71.53% cumulative profits increased after
two years and 63.12% cumulative profits increased after
three years could be estimated.
The changes of customers in different stages are able
to be displayed systematically, while the estimated two
years sales and three years sales are comparable for
supporting decision-making with different strategic
objectives (ex: sales or number of customers). Through
computer simulation technique, the proposed model
helps enterprises to increase the dynamic planning
capabilities, business strategy performance and create
added value. In addition, the potential customers and
existing customers could be handled by five customer
8   M.-R. YAN
market stages in response to strategic planning under
different resources and market conditions. The analy-
sis of the customer base, product innovation strategy,
market development strategies, operating cost, business
performance assessment strategies could be performed
by computer simulation. The quality of decision-making
for industrial operations could be enhanced.
6.  Discussion and implications
Entrepreneurial knowledge and innovations are critical
driving forces to modern business development. From
knowledge-based perspective, a better understanding
and analytic skills in the process of strategic planning
for future scenarios with various business innovations
would enhance the feasibility of innovation-driven
business developments. In the previous studies, vari-
ous frameworks of design thinking and business model
developments have been proposed to improve entre-
preneurial thinking and inspire business innovations.
However, when innovative ideas and business models
have been identified, there is an urgent demand for a
quantitative analysis on the impacts of one’s ideas and
innovations on future business performance. What
types of resources will be critical and at what degree
the resources will be sufficient to promote the business
model and the expected performance? What will be
optimistic and worse cases if the business environment
evolves with the dynamic business strategy? The afore-
mentioned strategic architecture and scenario planning
are essential entrepreneurial knowledge and capability
to implement innovations from business strategies to
real performance. While the computer simulation tech-
nique is getting matured, the proposed simulation-based
strategic decision support system (SSDSS) would be a
critical and comprehensive application with the exist-
ing frameworks of design thinking and business model
developments that could make product, service and
technological innovations more connected to the market
and business performance. The proposed model helps
to explain how business performance has developed
up to the current date, and how to develop and imple-
ment strategies to improve future performance. Firms’
dynamic capability is improved with the improved
entrepreneurial knowledge and better organisational
learning in the process of strategic planning and group
decision-making.
The benefits of the proposed SSDSS to improve
entrepreneurial knowledge and business innovations
can be summarised in three characteristics. First, it
systematically enables virtual laboratory for business
experiments of individual and team decision-making.
Scientific experiments using management simulations
that incorporate feedback, delays, and nonlinearities
between variables support the decision-making environ-
ments of executives than merely relying on psychological
and subjective judgments in decision-making process.
Second, decision rules can be systematically investigated
with numerical data from the field. Managers’ decision
rules can be estimated from data on decisions and the
information available to managers at the time they made
those decisions. Third, it improves the understanding of
resource accumulation and implementation strategies
that facilitate knowledge management and organisa-
tional learning.
7. Conclusions
This paper demonstrates the strategic architecture of
SSDSS and explains the role of applications in inno-
vation-driven business developments. Two real world
case studies with SSDSS applications help to exam-
ine the applicability and the effectiveness of support-
ing business strategies. The model-based case studies
clearly demonstrated that, entrepreneurial knowledge
could be improved by the process of the proposed
simulation-based strategic business planning and the
foreseeing business performance can help the deci-
sion-makers to deliver better thoughts and actions in
business innovations.
The proposed SSDSS offers improvements in dealing
with issues in strategic planning for innovation-driven
business development. Entrepreneurial knowledge and
dynamic capability could be systematically developed
with the applications of SSDSS. To effectively apply the
proposed SSDSS on real practice, an understanding of
SD methodology and principles including measurable
performance over time and stock-flow characteristic of
variables is the foundation. Furthermore, the strategic
architecture should be recognised by decision-makers
and stakeholders in a group decision process. Historical
data as well as numerical analysis are the key of sys-
tem inputs and the parameters adopted for simulations
and scenario analysis should be carefully considered
in consistent to the real case environment as possible.
Simulations and scenario analysis should focus on the
intended strategies in innovations and business devel-
opment, while the resources-based decisions could be
supported. The aforementioned tactics of system appli-
cations on real world cases require iterative simulations
and discussion for managerial implications. However,
the model could be limited by the system boundary as
well as the variables considered in the strategic archi-
tecture. A model-based case study is not able to explain
the scenarios driving by excluded variables. Therefore,
as business model evolves, extended development of
strategic architecture with other critical variables will
be required for unresolved problems or further issues.
For further development, cloud computing technique
is able to be incorporated with the scientific approach.
Future research could benefit from the proposed SSDSS
as a structured framework for system extensions.

Acknowledgement
With an academia-industry collaboration with Ten Ren Tea
Group and DAYEH HOLDING ENTERPRISE, we thank
Tzu-Chieh Chiu and Jen-Ming Weng for their participations
in empirical data collection and case studies.
Disclosure statement
No potential conflict of interest was reported by the author.
Funding
This research has been supported by research grants from the
Ministry of Science and Technology in Taiwan and visiting
research project at Cornell University, USA.
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