The creation of successful business models through the extended application of design in business in Latvia and Estonia

Purpose – The purpose of this paper is to identify the dominant strategy and business models of companies and to analyse the awareness of design and the stage of design application in business in its broader sense from the perspective of business executives in the manufacturing sector and professional designers in the design industry that lead to creating successful business models in Latvia and Estonia. Design/methodology/approach – The questionnaire was used with two target groups – business executives (based on NACE 2, B-E sections, i.e. manufacturing companies) and professional designers in the design industry (NACE 2, M 74.10 section). In the first target group, 374 responses of business executives in Latvia and 371 responses of business executives in Estonia were received; in the second target group, 85 respondents in Latvia and 42 respondents in Estonia providing professional design services were analysed to identify the level of design awareness and its application in business in the respective countries. Findings – There are national and regional specifics in Latvia and Estonia based on the development level of micro and macro factors that influence the entire innovation ecosystem. When comparing both countries in these terms, both target groups specify that design is applied more frequently in the processes of product development in Estonia, thus leading to new forms of innovation, than it is in Latvia. Conversely, in Latvia, many business managers still focus on short-term business solutions and cost-reduction as a sole challenge, with limited awareness of management approaches based on the broader application of design as a powerful innovation source for product development, improvement, and renewal of business models. Research limitations/implications – A suggestion for further research is to replicate the study in Lithuania and explore the perspective of other stakeholders. Practical implications – The results of this research demonstrate the necessity to change the thinking patterns of business managers in order to develop their skills and capabilities to recognize emerging new driving forces of innovation unfolding through awareness of design and opportunities for its extended application that create successful business models for continuous value generation. Originality/value – This paper makes a contribution to understanding the current stage of awareness of design and its application in the manufacturing sector in the Baltic States.