Digitalization and its influence on business model innovation

Abstract

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. 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. 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. 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.