digitalization and its influence on business model innovation

This strategy is the foundation and shows a company the business models that could spell success in the future. Three interview respondents stated that they had been using digitalization in their value proposition for several years (A1, A4, A6). 415-435. 1, pp. Most of the investigated media companies capture value through approaches like subscription models (M1), advertising and the sale of products (e.g. This process of coding was iterative. 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. Furthermore, interview respondent A6 emphasized that they believed that digitalization will have major impact on value proposition in future. 34 No. Their use of technology in innovative BMs questioned the way established media companies produce and deliver value as well as their respective capabilities (M2, M3, M4). Such changes may include the value chain or the value proposition to the customer or other partners of the company (Wirtz, 2011; Matzler et al., 2013). The following steps were taken: Establishment of a provisional coding scheme: the initial coding scheme was derived deductively based on theoretical considerations. 2, pp. While digitization describes the process of the conversion of analogue and noisy information into digital data (Brennen and Kreiss, 2016), digitalization is used to describe any changes in the organization and the organization’s BM due to their increasing use of digital technologies to improve both the performance and the scope of the business (Westerman et al., 2011). The findings of this research have contributed to the literature on BM and digitalization. Furthermore, since digital processes and interfaces are partly used in critical areas (e.g. Table II provides an overview of the BM elements in investigated industries and the allocation of these elements to dynamic capabilities phases. Inductive coding of the data gathered: all interviews were coded according to the previously developed coding scheme. “Scalability” refers to a SME’s ability to grow quickly without being hindered by constraints imposed upon its business model … 5, pp. Key informants were chosen, not because they were representative for the members of a company in any statistical sense, but because they were knowledgeable about the topic of interest and “able and willing to communicate about it” (Kumar et al., 1993, p. 1634). (2018), “Business models and dynamic capabilities”, Long Range Planning, Vol. In a second step, appropriate respondents were selected, all of whom were either working in the top management level and had a strategic perspective on the topic or were responsible for digitalization and/or BM development in the business. The extent, however, to which digitalization impacts corporate activities and leads to BMI differs from industry to industry and takes time since “business models are more context-dependent than technology,” depending on resources and capabilities that are available within the respective company (Teece, 2018, p. 45). However, small- and medium-sized enterprises (SMEs) have scarce time and resources for experimenting with their … Interview respondent A3 emphasized that digitalization facilitated collaboration among partners across industry sectors (external) as well as internally between business segments, which did not compete with each other. Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. 93 No. cloud technologies, sensors, big data, 3D printing) opens unforeseen possibilities and offers the potential to create radically new products, services and BM (Matzler et al., 2016). An example is internet streaming of media content, which relies on a completely different infrastructure to that of conventional radio and television (M5). Interview respondents recognized that, by publishing content via digital channels, their companies became more accessible and they potentially created additional value for customers. (2016), “Capturing value from big data − a taxonomy of data-driven business models used by start-up firms”, International Journal of Operations & Production Management, Vol. Although digitalization seemed to already be an integrated part of business processes for value creation, one respondent mentioned that his company had not seized all the options and possibilities provided by digitalization (A4). Wer gewinnt. The development of digital business models and services often requires different processes and methods than e.g. Souto, J.E. They highlighted the importance of businesses possessing additional competences and know-how in order to offer new services or solution packages, respectively. 0000096927 00000 n If the single BM elements and how they change is examined more carefully, the findings of the recent studies have pointed out that the value proposition, internal infrastructure management and customer relationships are mainly influenced by digitalization (Arnold et al., 2016; Kiel et al., 2017). The pace of digital development is steadily increasing, and technology lifecycles in the media industry are continuously shortening. 143-152. Digitalization is not just a way to use data to improve performance. The world is now online, and it is necessary for the businesses … 53 No. Developments in digital technology offer new opportunities to design new products and services. ... C. Müller, W. Vorraber, E. SchirgiDigitalization and its influence on business model innovation. Second, making a comparison between a (mainly) manufacturing and a service-oriented industry allowed the varying importance of digital technologies in the context of BMs to be contrasted. Influences of digitalization on BM elements and their associations with dynamic capabilities. Chesbrough, H. (2010), “Business model innovation: opportunities and barriers”, Long Range Planning, Vol. In general, further analyses are certainly needed to determine the importance and influence of digitalization concerning company strategies and BMs. 6, pp. 2016, pp. (2018), “Strategies for business model innovation: how firms reel in migrating value”, Long Range Planning, Vol. These include the Industry 4.0 movements, although industries in the automotive sector still remain car manufacturers themselves or ancillary industries and not digital businesses (Svahn et al., 2017). H�lUˎ�6��+���E�hQZ�-R�@� q�E�-�6�@R�q>��~o���L4��\�>Ϲ��޽��a�X�E�E.7����J|ܓ����Tֈ�D�&+�n�:g�l�ć�١�ၣ(�7ߖ�B���3����Vo��b�?�ꬩ�r��o��)ץ*3�����_��������+�u.��"���2˷y�\��~�%�7ogSY���������U�U�VUÚ��ϡ����ȳ� |�Τ8����s�Lt��R��2�`��S7ɥ���n�����9��v �\t�����Ia�n>��L)jDi�~2�����)�����(U��5+�&k���� WMÀ��h;�OZ�E@��߯�— CQ�p#���`�M}�l�`����i��~�H%����&�Z0����`��ځq�;��Q Digitization (i.e. However, while digitalization led to an intensified collaboration with some partners (e.g. The choice of this research design was determined by the current knowledge of digitalization BMI, which implies research questions such as those presented above. Kaufmann, T. (2015), Geschäftsmodelle in Industrie 4.0 und dem Internet der Dinge, Springer Vieweg, Wiesbaden. Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. The need to adapt to changes and developments in a company’s environment and achieve increasingly shorter technology cycles represented triggers for digitalization activities in companies (A1, A4). These findings are also supported by those of studies such as Arnold et al. 0000011658 00000 n 8, pp. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial & non-commercial purposes), subject to full attribution to the original publication and authors. consider that “digitalization has been identified as one of the major trends changing society and business in the near- and long-term future the impact of digitalization will be major; it has been compared to the industrial revolution by several authors” [] (p. 64).Citing E. Stolterman and A. C. Fors, Parviainen et al. This has led to challenging situations in a corporate context: manifold new technological opportunities are perceived, but people are uncertain how to use and implement them simultaneously in terms of product and service offers (Lerch and Gotsch, 2015). From … The main limitation of this research was the restricted number of informants included in each case study. Fleisch, E., Weinberger, M. and Wortmann, F. (2014), “Business models and the internet of things”, Bosch IoT Lab White Paper, University of St. Gallen, Bosch Software Innovations GmbH, Zürich, St. Gallen, August. 3, pp. Due to the pressure resulting from decreasing profit margins, investments in digital technologies were perceived as attractive (M1). Chancen und Risiken für den Maschinen- und Anlagenbau”, Dr Wieselhuber & Partner GmbH und Fraunhofer IPA, Munich, March. In the media industry, digitalization affected the value creation through adjusted processes for content generation as well as the need for technological reconfiguration. Was sie bedeutet. 8-13. Arnold, C., Kiel, D. and Voigt, K.-I. Predominantly changes in the form of new offers (products, services, or solution packages in the form of cloud computing or predictive maintenance) are driving changes in the BM. According to interview respondent M1, the media industry dealt with this influence at a relatively early stage (beginning in the 1990s), and digital technologies have been used for several years (M6). The research study was explorative by nature and used an embedded multiple-case study design (Yin, 2009), whereby each of the two industries chosen constituted one case. 2, pp. How does “open BPM” fit into value-driven … (2015), “Digitalisierung zwischen Erwartung und Implementierung”, IM+io Fachzeitschrift für Innovation, Organisation und Management, Vol. Another aspect that was mentioned by interview respondents M1 and M5 was the secure handling of personal data and the strict implementation of legal regulations (M1, M2, M5, M6). 5, pp. The study was conducted on a broad basis in Austria and Hungary in 2017. 19 No. 0000005854 00000 n Digitalization is a top priority but efforts are stalling Eighty-seven percent of senior business leaders say digitalization is a company priority, yet only 40% of organizations have brought digital initiatives to scale. between different systems or value creation processes) was mentioned as a pressing issue in this regard (M1, M2, M6). As stated by interview respondent M1, opportunities offered by digitalization, such as social media platforms and personalization, were used to generate additional revenue (e.g. Digitalization and business model innovation 1. (2000), “Dynamic capabilities: what are they?”, Strategic Management Journal, Vol. Berman, S.J. 69-75. Massa, L., Tucci, C.L. Downloadable! (Information Technologies and Business Informatics, © 2018, Michael Rachinger, Romana Rauter, Christiana Müller, Wolfgang Vorraber and Eva Schirgi, Creating value through business model innovation, How the Industrial Internet of Things changes business models in different manufacturing industries, International Journal of Innovation Management, Geschäftsmodell-Innovation durch Industrie 4.0. This also included their production facilities (A4). These findings are also supported by Bourreau et al. Interview respondents M3 and M4 perceived options provided by digitalization as an addition to the companies’ existing BMs and did not see the need to change established BMs. Over the past few decades, global industries not only have faced technological changes that have led to opportunities such as greater flexibility, reactivity and product individualization, but also have presented diverse challenges such as rapid technological change, increased complexity and changing customer preferences and legal requirements. 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. personalization of content or real time automatization) particularly requires investments (M1, M6). 0000001892 00000 n Was jetzt zu tun ist”, Roland Berger Strategy Consultants and BDI, Munich, Berlin, February. 82-110. As stated by interview respondent M5, the use of external platforms was also considered to be critical, since companies are usually not able to generate income from content placed on these platforms. Respondent A1 also saw that challenges were imposed by short technology cycles. Burmeister, C., Lüttgens, D. and Piller, F.T. This may be because the media industry has a strong business to customer focus, causing the companies to place a greater emphasis on value proposition and value capture aspects. For example, interview respondent M4 stated that digitalization influenced the customer channels of the company but left the residual BM unchanged. Wer gewinnt. A second valuable contribution from this paper is the distinction made from digitization to the term digitalization. In this context, the business environment is seen as a variable that can be selected and shaped by the company, but also vice versa. 0000004901 00000 n A2 also added that, despite digitalization, the human workforce continues to have high relevance. Decisions about new resources must be made, and the replacement of existing ones is important. The paper aims to discuss these issues. The main issue, according to interview respondent M6, was the interfaces within a company and to the customer. Although research on entrepreneurial intention and business models is gaining attention, there is still a large knowledge gap on both fields. For example, one respondent (A1) explicitly mentioned data-driven business as a new aspect for value proposition. Industry 4.0) (Linz et al., 2017). (2017), “A critical assessment of business model research”, Academy of Management Annals, Vol. Lerch, C. and Gotsch, M. (2015), “Digitalized product-service systems in manufacturing firms: a case study analysis”, Research-Technology Management, Vol. �DS�Di�!� �>����eI]t�Yi�߹�z�f"����6n���ꈋbZ|�|ܛ��0JŞ��:ӹ��s��ŧ�]��뉓ʕ�7�k��i���}�t��n���3(jhC�xR�lz�m���xa����Z����\� p����.��OS�� ��i�g�S�Kph}�+ߞZ��l_o2a���%��Q}��/y* S �å’���j�{�p@�����������?M���TІ.%�`�L�M��5��d������]�Q`� &5�PU����/7��-�z��q�r����JK��]��u�g�p��)�i>O�}���@jK K%���ю2Kؓ}�ρ ��K���P�8��m%��8:�.�2�WS�)�>7/��` �ǧ Ernst & Young (2011), The Digitisation of Everything. The diffusion of digital technologies can manifest as digitization (the straightforward replacement of discrete processes or tools with digital analogues) or digitalization (the use of digital … Changing customer Behaviour, ernst & Young ( 2011 ), “ business model innovation changes digitalization and its influence on business model innovation! 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S BM, Rothenbuhler, E.W., Pooley, J.D support the product development processes ( A5 ) since! Resonates the findings of Linz et al customer is digitalization and its influence on business model innovation distinction made from Digitization to the literature on BM digitalization! Form selection criteria customer relationships are intensified studies such as process optimization were mentioned as a for. The literature on BM and digitalization groups with tailored content this, respondent. Processes ( A5 ) for this as drivers for digitalization investigated industries and the media industry, the Consulting! But left the residual BM unchanged are they? ”, Journal of Mixed methods,. Inductive coding of the investigated media companies recognized the importance and influence of digitalization and its influence on business innovation! ) on business models ”, Academy of Management Annals, Vol intelligent systems is important. 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