Digitalization and its influence on business model innovation

TLDR

Digitalization reshapes business models by enabling new forms of cooperation, product and service offerings, and customer and employee relationships, while simultaneously pressuring firms to rethink strategy early, yet empirical insights into these effects remain scarce. This study investigates how digitalization influences value creation, proposition, and capture, and how firms in media and automotive industries cope with related challenges, aiming to discuss these issues. Using qualitative interviews with 12 key informants from media and automotive sectors, the authors examined differences and similarities in digitalization’s impact on value creation, proposition, capture, and coping strategies. The study finds that digitalization’s influence on business model innovation depends on the value proposition and position within the value network, with organizational capacities and employee competencies emerging as future challenges for both industries.

Abstract

Purpose Increased digitalization has influenced various business activities including companies’ business models (BMs) by enabling various new forms of cooperation between companies and leading to new product and service offerings as well as new forms of company relationships with customers and employees. At the same time, this digitalization has put pressure on companies to reflect on their current strategy and explore new business opportunities systematically and at early stages. While research on digitalization in the context of BMs is now gaining increased attention, a research gap still exists in this field since the number of empirical insights is limited. The paper aims to discuss these issues. Design/methodology/approach Qualitative empirical data collected from 12 key informants working in two distinctive industries, the media and automotive industries, were collected. An investigation was carried out to examine the differences and similarities among how digitalization influences a company’s value creation, proposition and capture, as well as how firms cope with challenges presented by increased digitalization. Findings The findings of the study show that, whilst digitalization is generally considered to be important, the value proposition itself as also the position in the value network determine the perceived available options for business model innovation (BMI) by digitalization. Moreover, the organizational capacities and employee competences were identified as future challenges that will be faced by both industries. Originality/value The findings of this study have revealed that representatives of the media and automotive industries perceive both the pressures and opportunities of digitalization regarding BMI; its application and exploitation, however, remain challenging. This study contributes to the existing body of knowledge by providing empirical insights in the context of digitalization and BMI.