Proposal for a Digitally Enabled Business Model
It has become common sense that digital transformation does not only affect a few enterprises that were born digital, but rather all enterprises. This challenge confronts all business leaders with the necessity to reimagine their business in terms of digital. However, currently the tools for this endeavor are in their infancy.
Digitalization is revolutionizing the way business is conducted within industrial value chains through the use of Internet of Things (IoT) technologies, intensive data exchange and predictive analytics. However, technological application on its own is not enough; profiting from digitalization requires business model innovation such as making the transition to advanced service business models. Yet, many research gaps remain in analyzing how industrial companies can leverage digitalization to transform their business models to achieve sustainability benefits. Specifically, challenges related to value creation, value delivery, and value capture components of business model innovation need further understanding as well as how alignment of these components drive sustainable industry initiatives. Thus, this special issue editorial attempts to take stock of the emerging research field through a literature review and providing a synthesis of special issue contributions. In doing so, we contribute by developing a framework that communicates and sets the direction for future research by linking digitalization, business model innovation, and sustainability in industrial settings.Industries are entering the fourth industrial revolution through capitalizing digitalization, which is revolutionizing the way business is conducted in industrial value chains. We are witnessing a new age, where industry is becoming increasingly ‘smart’ with the use of Internet of Things (IoT) technologies, intensive data exchange and predictive analytics.
“During recent years, dynamic capability research has developed a framework outlining how firms adapt their physical, human, and organizational resource bases when facing situations of technological or market change” (Mezger, 2014, p. 430). The ongoing transition of economies, given the increasing embeddedness of digital technologies in general, can be classified as just such a change in terms of technological and markets drivers that influence a company’s BM. Schweizer (2005, p. 6) explained that a “dynamic capability can be considered as the ability to seize new opportunities and to change the existing business model by reconfiguring the value chain constellation and protecting knowledge assets, competences and (the access to) complementary assets and technologies in order to achieve sustainable competitive advantage.” Thus, companies can remain competitive if they can change their BMs (Teece et al., 1997; Eisenhardt and Martin, 2000). Not only the internal capacities are central to the BM. The assessment of the BM is bound to the environmental context. To increase the success of the designed BM on the market, the company must analyze various alternatives, have a good understanding of customer requirements, a precise understanding of the value chain so as to deliver what customers need as cost-effectively as possible and on time and should also have a neutral perspective on outsourcing (Teece, 2018).
In sum, in recent years there was a conspicuous increase in web-based services with the common feature of connecting demand and supply for a specific purpose, enabled by the rapid spread of digital and mobile technologies. Within the many and profound changes brought by the Digital and Social transformation, the advent of companies-platform, namely new digitally-enabled business models, is emerging as one of the most compelling at a global level.
Schweizer, L. (2005), “Knowledge transfer and R&D in pharmaceutical companies: a case study”, Journal of Engineering and Technology Management, Vol. 22 No. 4, pp. 315-331.
Teece, D.J. (2018), “Business models and dynamic capabilities”, Long Range Planning, Vol. 51 No. 1, pp. 40-49.
Mayring, P. (2010), Qualitative Inhaltsanalyse. Grundlagen und Techniken, Beltz, Weinheim and Basel.
Mezger, F. (2014), “Toward a capability-based conceptualization of business model innovation: insights from an explorative study”, R&D Management, Vol. 44 No. 5, pp. 429-449.
Ritter, T. and Lettl, C. (2018), “The wider implications of business-model research”, Long Range Planning, Vol. 51 No. 1, pp. 1-8.