Responding to harsh environment with strategy renewal: the role of external support

In the last decades, the city of Venice has emerged as the epitome of over-tourism and the undesired consequences of extremely high global tourist demand: rising housing costs, depopulation, and displacement of local stores and activities. Then, on November 12, 2019, Venice suffered one of the worst floodings of her history. The tide rose to 187cm, submerging most parts of the city and damaging many businesses, houses, and ancient monuments. Finally, the pandemic of COVID-19 suddenly emptied the city, disrupting the few remaining successful businesses (i.e., those directly and indirectly tied to tourism). In this paper, we discuss the impact of a privately financed project aimed at contrasting the consequences of the unfavourable external environment faced by Venetian manufacturing SMEs, promoting local artisanal productions, and preserving cultural heritage. Participating SMEs were offered several supporting initiatives, such as education, consulting, and the possibility to sell some of their products on an e-commerce platform. The project offered a unique opportunity to observe the changes induced by the exposition to external stimuli on strategic renewal and business model innovation. While the project was aimed at offering an immediate outlet for SME products, the participation had a few “side effects”, such as the exposure to new international customers and the need to rethink the firms’ communication with potential customers. We investigate the impact of such indirect effects on the configuration of the strategy through a survey and a multiple case study. What emerges is that participation in the project activities is positively associated with strategy renewal and performance.