Challenges Associated with Frugal Business Modelling: An Exploratory Factor Analysis

Abstract

The research conducted in this study focused on exploring the challenges associated with frugal business modelling in the context of agribusinesses. The study employed a cross-sectional survey design and targeted managers and operational staff working in agribusinesses affiliated with the National Association of Seed Traders of Ghana (NASTAG). The collected data underwent a series of statistical analyses, including exploratory factor analysis, principal component analysis, and varimax rotation. These analyses were performed on the questionnaires, which contained variables assessing the challenges related to frugal business modelling. The findings of the study revealed that several challenges hinder the frugal business modelling in Ghana. These challenges were categorised into six factors: coordination, information and dissemination, regulation and supervision, funding, service delivery, and the institutional framework. These factors emerged after applying exploratory factor analysis, principal component analysis, and varimax rotation techniques. Together, these six factors accounted for 65.6% of the explained variance in the data. The identified challenges have both theoretical and practical implications for enhancing the sustainability of agribusinesses. They provide valuable insights into the specific areas that need attention and improvement to promote the long-term viability of agribusiness operations. However, despite the significance of these findings, the study also recommended the exploration of longitudinal studies. Conducting longitudinal research would enable a deeper understanding of the enduring impact of frugal business modelling on agribusiness sustainability. By examining agribusinesses over an extended period, researchers can gain insights into the dynamics and long-term effects of frugal practices on sustainability outcomes.