Article
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

Equipment manufacturers are currently utilizing new digital technologies such as the Internet of Things (IoT), Artificial Intelligence, or Big Data, for new digital offerings. However, these offerings seldom enhance revenue, because companies struggle with business model (BM) dynamics. By analyzing 27 companies through an explorative case-study approach, the authors consider how companies can successfully achieve revenue enhancement through digital offerings. The result is a threefold framework for revenue enhancement through digital offerings. First, this framework distinguishes between three phases of BM dynamics: 1) augmenting products through a "hardware plus" logic, 2) developing a portfolio of multiple logics for creating customer value, 3) integrating this portfolio through platform logic. Second, the framework emphasizes that three barriers, which we refer to as confidence, mixing, and collaboration barrier, limit the progress from Phases 1 to 3. Third, the framework reveals that each phase contains certain modifications of BM components. In the first phase, companies adapt their BM components slightly, so as to advance toward a "hardware plus" logic. In the second phase, companies embrace more radical BM innovations in order to convert services into an outcome-based BM and develop a new software subscription BM. In the third phase, companies modify BM components in order to integrate the BMs internally and to open them up for external collaboration partners.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Traditional firms often find selling digital-enabled solutions challenging, not realizing that in many cases, "digital products" are in fact "services" [2]. They also miss the interplay between digitally enabled and traditional offerings [3]. The digitally-enabled solutions force an adaption to the firm's underpinning business model and lead to challenges internally with the delivery of digitally-enabled solutions and externally in terms of the sales processes. ...
... The integration of digital solutions into the market offering affects the business model [3] and its configuration. This is because the addition of digital solutions enables the creation of new value propositions, transforming the product by means of the servitization process [3]. ...
... The integration of digital solutions into the market offering affects the business model [3] and its configuration. This is because the addition of digital solutions enables the creation of new value propositions, transforming the product by means of the servitization process [3]. Transforming a traditional manufacturing firm to one that sells digital offerings based on Industry 4.0 technologies is not without its challenges [5]. ...
Chapter
This paper describes and analyses the application of Demings PDCA circle in combination with action learning methods to support the commercialization of digitally-enabled products and services. It does this through a single use case where one of the authors was embedded. The paper considers the challenges for a traditional firm selling solutions based on digital technology and how this is then converted into a value proposition. PDCA provided a change management framework that supported the action learning that was taking place by providing iterations with refection phases. This allowed the firm to proactively identify the barriers that it had to overcome and then to understand how it overcame these barriers. In doing so, it built new knowledge within the firm that could be standardized. This is an initial study, and additional studies should be made of alternative cases to allow for a deeper comparison.
... Business model challenges Existing business model Chen et al., 2017;Fruhwirth, 2018;Gebauer et al., 2020;Grover et al., 2018;Günther, et al., 2017a;Najjar & Kettinger, 2017;Parvinen et al., 2020;Rashed & Drews, 2021;Wiener et al., 2020;Woerner & Wixom, 2015 Value proposition Brownlow et al., 2015b;Buff et al., 2015;Chen et al., 2017;Davenport, 2016;Fruhwirth, 2018;Gandhi et al., 2018;Hanafizadeh & Harati Nik, 2020;Hunke et al., 2017;Muhtaroglu et al., 2013;Parvinen et al., 2020;Rantala et al., 2018;Thomas & Leiponen, 2016;Wiener et al., 2020;Wixom, 2014;Wixom & Farrell, 2019 Customer relationship Alfaro et al., 2019;Buff et al., 2015;Fruhwirth, 2018;Gandhi et al., 2018;Günther, et al., 2017b;Hanafizadeh & Harati Nik, 2020;Lange et al., 2021;Liu & Chen, 2015;Najjar & Kettinger, 2017;Parvinen et al., 2020;Rantala et al., 2018;Wixom, 2014;Wixom & Farrell, 2019 Business partnership Buff et al., 2015;Chen et al., 2017;Fruhwirth, 2018;Gandhi et al., 2018;Gebauer et al., 2020;Günther, et al., 2017a;Hanafizadeh & Harati Nik, 2020;Hunke et al., 2017;Lange et al., 2021;Muhtaroglu et al., 2013;Najjar & Kettinger, 2017;Wixom, 2014;Wixom & Farrell, 2019 Profitability Al-Zahrani, 2020a;Bataineh et al., 2016;Chen et al., 2017;Fruhwirth, 2018;Gandhi et al., 2018;Grover et al., 2018;Lange & Drews, 2020;Muhtaroglu et al., 2013;Najjar & Kettinger, 2017;Parvinen et al., 2020;Wiener et al., 2020;Wixom, 2014 Legal & regulatory challenges ...
... Business model challenges Existing business model Chen et al., 2017;Fruhwirth, 2018;Gebauer et al., 2020;Grover et al., 2018;Günther, et al., 2017a;Najjar & Kettinger, 2017;Parvinen et al., 2020;Rashed & Drews, 2021;Wiener et al., 2020;Woerner & Wixom, 2015 Value proposition Brownlow et al., 2015b;Buff et al., 2015;Chen et al., 2017;Davenport, 2016;Fruhwirth, 2018;Gandhi et al., 2018;Hanafizadeh & Harati Nik, 2020;Hunke et al., 2017;Muhtaroglu et al., 2013;Parvinen et al., 2020;Rantala et al., 2018;Thomas & Leiponen, 2016;Wiener et al., 2020;Wixom, 2014;Wixom & Farrell, 2019 Customer relationship Alfaro et al., 2019;Buff et al., 2015;Fruhwirth, 2018;Gandhi et al., 2018;Günther, et al., 2017b;Hanafizadeh & Harati Nik, 2020;Lange et al., 2021;Liu & Chen, 2015;Najjar & Kettinger, 2017;Parvinen et al., 2020;Rantala et al., 2018;Wixom, 2014;Wixom & Farrell, 2019 Business partnership Buff et al., 2015;Chen et al., 2017;Fruhwirth, 2018;Gandhi et al., 2018;Gebauer et al., 2020;Günther, et al., 2017a;Hanafizadeh & Harati Nik, 2020;Hunke et al., 2017;Lange et al., 2021;Muhtaroglu et al., 2013;Najjar & Kettinger, 2017;Wixom, 2014;Wixom & Farrell, 2019 Profitability Al-Zahrani, 2020a;Bataineh et al., 2016;Chen et al., 2017;Fruhwirth, 2018;Gandhi et al., 2018;Grover et al., 2018;Lange & Drews, 2020;Muhtaroglu et al., 2013;Najjar & Kettinger, 2017;Parvinen et al., 2020;Wiener et al., 2020;Wixom, 2014 Legal & regulatory challenges ...
... Data usage Buff et al., 2015;Cech et al., 2015;Günther, et al., 2017b;Hanafizadeh & Harati Nik, 2020;Parvinen et al., 2020;Thomas & Leiponen, 2016;Wixom, 2014 Ownership and legal liability Grover et al., 2018;Günther, et al., 2017aGünther, et al., , 2017bHunke et al., 2017;Thomas & Leiponen, 2016 Cross-border data trade Mohammadzadeh et al. 2018;Najjar & Kettinger, 2017;Schroeder, 2016;Wiener et al., 2020Standardization Fruhwirth, 2018Schroeder, 2016;Wiener et al., 2020 Security & privacy challenges Transparency Günther, et al., 2017a;Hanafizadeh & Harati Nik, 2020;Morey et al., 2015;Najjar & Kettinger, 2017;Schroeder, 2016 Data confidentiality Al-Zahrani, 2020;Günther, et al., 2017aGünther, et al., , 2017bHanafizadeh & Harati Nik, 2020;Parvinen et al., 2020;Thomas & Leiponen, 2016;Wiener et al., 2020 Conflict of interest Gandhi et al., 2018;Günther, et al., 2017aGünther, et al., , 2017bParvinen et al., 2020;Thomas & Leiponen, 2016 Organizational challenges Analytical capability Alfaro et al., 2019;Brownlow et al., 2015a;Buff et al., 2015;Davenport, 2016;Elsaify & Hasan, 2021;Fruhwirth, 2018;Gandhi et al., 2018;Gebauer et al., 2020;Hanafizadeh & Harati Nik, 2020;Lange et al., 2021;Muhtaroglu et al., 2013;Najjar & Kettinger, 2017;Parvinen et al., 2020;Wixom & Farrell, 2019 Organization type Chen et al., 2017;Elsaify & Hasan, 2021;Günther, et al., 2017a;Lange et al., 2021; Par inen e al., 2020; Thomas & Leiponen, 2016;Van Spijker, 2014 Data management challenges Data acquisition Brownlow et al., 2015b;Buff et al., 2015;Chen et al., 2017;Davenport, 2016;Fruhwirth, 2018;Fruhwirth et al., 2020;Günther, et al., 2017b;Hunke et al., 2017;Lange et al., 2021;Najjar & Kettinger, 2017;Parvinen et al., 2020;Rantala et al., 2018;Schroeder, 2016;Thomas & Leiponen, 2016;Wiener et al., 2020;Wixom & Ross, 2017b Data quality Brownlow et al., 2015b;Chen et al., 2017;Lange & Drews, 2020;Parvinen et al., 2020 Data processing Buff et al., 2015;Fruhwirth, 2018;Hanafizadeh & Harati Nik, 2020;Lange et al., 2021;Najjar & Kettinger, 2017;Rantala et al., 2018;Wiener et al., 2020;Wixom & Rodriguez, 2021;Wixom & Ross, 2017b Data visualization Davenport, 2016;Hunke 2017;Rantala et al., 2018;Wiener et al., 2020 Data agreement Grover et al., 2018;Lange et al., 2021;Najjar & Kettinger, 2017;Thomas & Leiponen, 2016 ...
Full-text available
Conference Paper
Over the last decades, researchers and practitioners have looked at data as a valuable asset for improving business processes in organizations. However, nowadays, they see data more as a tradable asset that can be monetized. Data monetization here refers to generating revenue from selling data and data-based products and services. Despite providing opportunities for generating new revenue streams, data monetization is not without challenges, especially in established organizations. Previous research shows tha an organi a ion da a mone i a ion capabili i con rained b i e i ing b ine model, infrastructure, and organizational culture. Although Information Systems (IS) research and practice have shown an increasing interest in data monetization, we lack a thorough understanding of its challenges. As a first step in addressing this gap, we set out to identify challenges that established organizations face in monetizing their data. To that end, we conducted a systematic literature review and identified 21 challenges reported in the extant literature. Based on their nature, we divided these challenges into five categories, including business model, legal & regulatory, security & privacy, organizational, and data management challenges. Our study has several implications for IS research and practice.
... Environmental settings affect how businesses implement changes and transform their activities during crises (Schneider, 2019) with businesses implementing changes to three interconnected dimensions of their business models: value proposition, value creation and value capture (Clauss, 2017;Müller et al., 2018;Teece, 2010;Foss and Saebi, 2018). These result in business model adaptation and innovation (Gebauer et al., 2020;Saebi et al., 2017;Witschel et al., 2019). The former is defined as 'the process by which management actively aligns the firm's business model to a changing environment' (Saebi et al., 2017: 569), and the latter 'considers the business model instead of products or processes as the subject of innovation' (Clauss, 2017: 387) and is strategic in nature (Martins et al., 2015). ...
... SMEs, including start-ups, change their business models in response to crises. For this study, we differentiate between two types of changes business model adaptation and business model innovation (Gebauer et al., 2020;Saebi et al., 2017;Witschel et al., 2019). Changes in business models as a response to crises have been empirically examined in different ways. ...
... There has also been a focus on the main functions of business models (Chesbrough, 2007) or analysis of the interdependencies between business model design themes (Kulins et al., 2016). For our purposes, we follow a widely accepted definition of business models; this includes value proposition, value creation and value capture as interconnected dimensions (Clauss, 2017;Müller et al., 2018;Teece, 2010;Foss and Saebi, 2018) and also distinguish between business model adaptation and business model innovation (Gebauer et al., 2020;Saebi et al., 2017;Witschel et al., 2019). ...
Article
This article investigates how start-ups have been affected by, and have responded to, the COVID-19 pandemic by analysing interview data from 32 Australian start-ups during Australia’s second wave of COVID-19. A framework and visualisation were developed, capturing unexplored heterogeneity within these start-ups, depending whether the emphasis was upon opportunities or adversity, and the type and extent of business model changes. Six start-up types were identified: stable beneficiaries, business-as-usual continuers, digital adjusters, adversity survivors, opportunity graspers and lemonade makers. The findings suggest that most start-ups responded to the crisis through business model changes because of crisis-induced opportunities and crisis-induced adversity The anaysis found that the interplay between firm size and crisis influences whether start-ups focus on business model adaptation or business model innovation or a combination of both We thus contribute to the literature on business models, crisis management and a newly emerging field focusing on the implications of the COVID-19 pandemic for start-ups.
... This description implies a reconfiguration of the manufacturer's resources, capabilities and structures-that is, an organizational transformation. However, the so-called digital paradox means that few manufacturers have achieved this organizational transformation when digitalizing because it is unfeasible to reorganize a firm for digital services when these account for only 1-4% of turnover (Gebauer, Arzt et al., 2020). As a service-induced change in the offering (Nilsson et al., 2001) or business model, service infusion is a more limited change than servitization . ...
... In light of the digital paradox, most manufacturers remain focused on the 'bread and butter' of product sales and service provision while developing and testing new digital business models. Gebauer, Arzt et al. (2020) found that manufacturers who focus on adding digital services to product sales find it difficult to reach challenging targets for digital service infusion. As compared to traditional service infusion, there is a need for better customer knowledge at a more granular level (see to ensure a better fit between service portfolio and customer segments. ...
... According to Gebauer, Arzt et al. (2020), manufacturers face three particular difficulties when moving into digital services: (1) failure to make progress towards changing the main business logic; (2) failure to overcome the management barrier; and (3) failure to fully develop and modify the value proposition and profit formula. A further key obstacle that is rarely discussed is the need to identify the right customer segments for digital services. ...
... Despite these recent advancements in this research area, we still lack understanding on how the business models of incumbent firms are innovated during digital transformation. This gap is of a high theoretical and practical relevance, considering that many firms still struggle with a holistic transformation of their business models [26] and as Gebauer et al. [27] recently highlights the digital paradox "which means that they invest in digital offerings, but struggle to achieve the expected revenue growth, despite the proven growth potential of digital technologies." To fill this gap we analyze the literature regarding BMI and digital transformation. ...
... More recently, the literature showed that digital transformation has to go beyond the electrification of existing processes and structures by implementing new technologies (i.e., digitization), but requires the holistic change and innovation of a firms' business model [11], [14], [27]. Verhoef et al. [14] highlight that digital transformation is a companywide phenomenon that changes the logic of value creation and value capture through the use of digital technologies. ...
... The redesign of an organization's structures is more important than simply integrating a certain amount of digital technology [39]. This is particularly important if the idea of digital BMI is a greater service-orientation and customer interaction to achieve value creation across the boundaries of the firm [27], [28], [40], [41]. ...
Article
The literature argues that a real digital transformation of firms requires holistic changes of the business model. Despite knowledge about this ambitious goal, understanding of how digital business model transformation can be achieved is still very limited. In this study, we explore how firms achieve digital business model transformation. We apply a case study design to investigate how incumbents have changed their respective business model dimensions during digital transformation. Our findings center on interview data and complementary archival rec-ords from 15 cases. We present a framework for digital business model transformation along the dimensions of value proposition, value creation, and value capture. Our results emphasize the importance of a preparatory phase in which the strategic course is set. Furthermore, our findings demonstrate that transforming a company’s business model is most effective when a single person, namely the Chief Digital Officer (CDO), is responsible. Our findings contribute to the business model literature, by providing a more holistic view on how BMI can be utilized during digital transformation.
... This study contributes to the current body of literature by theorizing about the transition process of manufacturers toward platform-based service business models. Past studies have already shown the potential of platforms for servitization (e.g., Cenamor et al., 2017;Eloranta and Turunen, 2016) and provide several typologies of digital service business models (e.g., Frank et al., 2019;Gebauer et al., 2020a;Kohtamäki et al., 2019), yet the literature remains ambiguous about how manufacturers actually transform their business model toward platform-based servitization. Therefore, we integrate prior knowledge on digital and smart servitization (Kamp et al., 2017;Paschou et al., 2020), platform leveraging and BMA to establish the foundation of a new theory that suggests multiple transformation pathways. ...
... This logic enables a quantum leap in value co-creation and significantly supports manufacturers in creating tailor-made, integrated solution packages (Constantinides et al., 2018;Teece, 2018). For instance, Gebauer et al. (2020a) reported a case of an equipment manufacturer who created digital platforms to integrate and process data on the entire customer manufacturing system in order to develop solutions for their customers. Following the FR logic, Bosch established an IoT Suite software platform for IoT developers that later became the technical foundation for a broad range of connected solutions, consisting of hardware (e.g., sensors and industrial gateways), software and services for the manufacturing, mobility, energy and smart home sector. ...
... In practice, established manufacturers usually adopt IIoT to transform their own internal infrastructure first, before moving on to finding better ways to manage their partner network and finally developing new value propositions for customers (Kiel et al., 2017;Lager, 2017;Laudien and Daxböck, 2016). The recent work by Gebauer et al. (2020a) displayed how B2B manufacturers were adapting their strategies and business step by step to achieve the advanced, service-oriented business model. Therefore, continuous BMA is considered a key dynamic capability in sustained value creation and capture (Achtenhagen et al., 2013;Dottore, 2009). ...
Full-text available
Article
Digitization is receiving a lot of interest in recent servitization research, but the use of platform-based Industry 4.0 technologies to boost product-service innovation (PSI) is less covered. This study aims to explore how companies successfully leverage platforms for servitization in an Industry 4.0 context. Building on theories of PSI, platform leverage and business model adaptation (BMA), we use longitudinal and interpretive research methods to conduct an exploratory study of the servitization pathways of four Chinese textile and apparel manufacturing companies. Results reveal companies' roadmaps in undertaking digital and smart servitization strategies enabled by platform leveraging, and show the implementation approaches for related BMA. Further analysis identifies platform-based servitization destinations and pathway dynamics. This study constructs a theoretical basis and a typology for explaining platform-based servitization.
... Despite these recent advancements in this research area, we still lack understanding on how the business models of incumbent firms are innovated during digital transformation. This gap is of a high theoretical and practical relevance, considering that many firms still struggle with a holistic transformation of their business models [26] and as Gebauer et al. [27] recently highlights the digital paradox "which means that they invest in digital offerings, but struggle to achieve the expected revenue growth, despite the proven growth potential of digital technologies." To fill this gap we analyze the literature regarding BMI and digital transformation. ...
... More recently, the literature showed that digital transformation has to go beyond the electrification of existing processes and structures by implementing new technologies (i.e., digitization), but requires the holistic change and innovation of a firms' business model [11], [14], [27]. Verhoef et al. [14] highlight that digital transformation is a companywide phenomenon that changes the logic of value creation and value capture through the use of digital technologies. ...
... The redesign of an organization's structures is more important than simply integrating a certain amount of digital technology [39]. This is particularly important if the idea of digital BMI is a greater service-orientation and customer interaction to achieve value creation across the boundaries of the firm [27], [28], [40], [41]. ...
... Despite these recent advancements in this research area, we still lack understanding on how the business models of incumbent firms are innovated during digital transformation. This gap is of a high theoretical and practical relevance, considering that many firms still struggle with a holistic transformation of their business models [26] and as Gebauer et al. [27] recently highlights the digital paradox "which means that they invest in digital offerings, but struggle to achieve the expected revenue growth, despite the proven growth potential of digital technologies." To fill this gap we analyze the literature regarding BMI and digital transformation. ...
... More recently, the literature showed that digital transformation has to go beyond the electrification of existing processes and structures by implementing new technologies (i.e., digitization), but requires the holistic change and innovation of a firms' business model [11], [14], [27]. Verhoef et al. [14] highlight that digital transformation is a companywide phenomenon that changes the logic of value creation and value capture through the use of digital technologies. ...
... The redesign of an organization's structures is more important than simply integrating a certain amount of digital technology [39]. This is particularly important if the idea of digital BMI is a greater service-orientation and customer interaction to achieve value creation across the boundaries of the firm [27], [28], [40], [41]. ...
Conference Paper
Building on business model and digitalization literature in combination with a qualitative data analysis, we provide insights for a digital transformation of the business model. Objective of this study is to explore different dimensions of the transformation process by analyzing how incumbent companies change their re-spective business model induced by digitalization. Following a grounded theory approach, we center our findings on interview data from 18 business firm. Build-ing on top managers reception, we present a process structure for the digital transformation along different dimensions of the business model and emphasize the important preparatory phase. We connect our findings to the literature and contribute to a more holistic view on the process of a digital business model transformation.
... The paper addresses three main gaps in the extant literature. First, while several recent studies have identified digital servitization archetypal pathways (e.g., Coreynen et al., 2017;Hsuan et al., 2021) and business models (e.g., Gebauer et al., 2020;Paiola and Gebauer, 2020), there has been no attempt to develop such a typology of DSIs or groupings of DSIs. While archetypal pathways and business models may signal strategic intent, they do not necessarily provide a perspective on the range of DSIs that a manufacturer may develop, despite DSIs being important aspects of many manufacturers' servitization efforts. ...
... While much of the literature discusses the revenue potential of digital service offerings (e.g., Gebauer et al., 2020), this study finds that creating a new revenue stream is not the priory of digital servitization for many manufacturers. Equally, the progression of value espoused in much servitization (e.g., Baines and Lightfoot, 2014) and digital servitization (e.g., Coreynen et al., 2017) work is not supported by our study. ...
Full-text available
Article
Servitization increasingly requires the use of digital technologies such as the Internet of Things (IoT), cloud computing, and predictive analytics. This paper investigates digital service innovations (DSIs) that use these technologies. Using a service innovation lens, it is distinguished from most prior servitization research through specifying DSIs from incremental to radical modes, rather than measuring service innovation on self-reported scales. Data were collected using expert interviews and secondary sources from 20 manufacturers from four sectors. Using changes from baseline service offerings, the study identified nine DSIs with varying degrees of innovativeness. The paper develops a framework within which each DSI can be placed, with two axes representing innovation mode (incremental, intermediate, radical) and impact of innovation (customer, manufacturer, hybrid). This latter dimension addresses concerns about the lack of focus on customer value in prior service innovation research. The study also develops a new typology of DSI groupings (Business enabler, Service enhancement, Digital service offering) demonstrating that DSIs have mainly enabling or service enhancing roles for manufacturers rather than one that is predominantly designed to create digital service offerings. The exceptions are ‘predictive maintenance’ and ‘process improvement’, which are radical/intermediate DSIs respectively and provide strong value for both manufacturers and customers.
... In the next form of characteristic, the partial transfer of risk of infrastructure provision to the customer can take place by using the lock-in effect so that the customer makes an advance commitment of a minimum purchase level. For instance, price reductions or a larger volume can be offered by taking out an annual as opposed to a monthly subscription [22,57]. This kind of incentive makes the customer more loyal to the company. ...
... This pay-per-performance revenue mechanism takes into account the added value for the customer during service use when setting a price [56]. In this phase, offerings such as temperature as a service, in which tenants pay for the actual room temperature compared to the outside temperature [55], or services in the industrial sector, where equipment availability, equipment performance, or improvements in efficiency are guaranteed, are feasible [57]. ...
Full-text available
Conference Paper
Increasing digitization and the associated tremendous usage of technology have led to data of unprecedented quantity, variety, and speed, which is generated, processed, and required in almost all areas of industry and life. The value creation and capturing from data presents companies with numerous challenges, as they must create or adapt appropriate structures and processes. As a link between corporate strategy and business processes, business models are a suitable instrument for meeting these challenges. However, few research has been conducted focusing on data-based monetization in the context of data-driven business models so far. Based on a systematic literature review the paper identifies five key components and 23 characteristics of data-driven business models having crucial influence on data-based value creation and value capturing and thus on monetization. The components represent key factors for achieving commercial benefits from data and serve as guidance for exploring and designing suitable data-driven business models.
... P 18 : Smart service interaction Continuously interacting with the customer through the user interface of the IIoT platform (e.g. smart product and smart terminals) and providing intelligent supports to solve the problem whenever customers need assistance (Gebauer et al. 2020). ...
... mobile App or smart vehicle terminal) of the platform (Alam et al. 2017;Siegel et al. 2016; Shao, Xu, and Li 2019). Besides, the firms can continuously interact with customers by connecting these smart products and smart terminals with the IIoT platform, and provide intelligent supports to solve the problem whenever customers need assistance (Gebauer et al. 2020). In light of the above consideration, we summarise seven service platform leverage practices (SPLPs) as important indicators for evaluating the IIoT platform capabilities in facilitating industrial service deployment, as shown in Table 2. ...
Article
Digital servitisation has emerged as an important strategy to enhance industrial companies' competitiveness. Leveraging the IIoT (industrial internet of thing) platform is considered an essential way to facilitate digital servitisation. Selecting an appropriate IIoT platform from numerous alternatives in the market is a difficult task for the firms due to lack of deep understanding of the required IIoT platform capabilities for deploying industrial service. To help firms make wise decision, we propose a feasible multi-criteria decision making framework for IIoT platform selection. Firstly, a practice-oriented technical-managerial-service criteria system is derived from typical platform leverage logics for digital servitisation. Next, an integrative approach combining cloud hierarchical BWM (best-worst method) and cloud TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) is proposed for selecting the best IIoT platform. Using this approach, the criteria weights and the ranking of potential platforms can be accurately determined by considering the fuzziness and randomness of linguistic decision information. Finally, a case study of a Chinese crane manufacturer illustrates the feasibility and reliability of the proposed framework. The analysis results can help the managers find the best IIoT platform and provide them with deep insight and direction for leveraging the IIoT platform towards digital servitisation.
... erefore, marketing model innovation must also be coupled with information technology to play an important role. e Internet economy is developing rapidly and big data-driven innovation models have become a popular research direction at present [5][6][7][8]. Many companies are now using big data technology to achieve knowledge mining. ...
Full-text available
Article
With the booming development of Internet information technology, e-commerce platforms in the era of network economy have undergone great changes, triggering a new marketing model change. Innovative research on marketing models can help the transformation and development of small and medium-sized e-commerce companies, which has important practical significance and theoretical value. The prediction of e-commerce sales is one of the key aspects of the evaluation of innovative marketing models, and only an accurate prediction of future sales can lead to a reasonable marketing plan. Therefore, a big data-driven e-commerce sales forecasting method is proposed. First of all, for 1703 real e-commerce companies, a large number of relevant data that affect sales are selected, including sales records, product information, product evaluation, and other information. A knowledge graph was then used to preprocess the data samples to produce a sample set containing concepts, entities, and relationships. Next, the knowledge graph K-modes clustering model is established. By fixing the affiliation matrix and the clustering cluster matrix in turn, the minimum of the objective function is continuously solved to obtain the cluster centres. Finally, sales prediction is achieved based on the clustering results. The experimental results show that the proposed clustering model is able to obtain better performance in terms of cluster purity, NMI, and F-value. The proposed clustering model has high sales prediction accuracy and has certain reference value for e-commerce enterprises of different scales to formulate innovative marketing models.
... The underlying advance guarantees that the individual answerable for the record is genuinely proficient was essential (Gebauer et al., 2020). They should choose to change following any financial techniques and accounting programming the association has used. ...
Full-text available
Article
Running a business is a job that requires high efficiency and productivity. This productivity can also come from the company's bookkeeping or accounting work efficiency. The use of digital technology is one of the goals to gain efficiency towards profitable and sustainable company productivity. For this reason, we have carried out this study intending to get the benefits and benefits of using digital technology to ease the company's accounting work. In order to be able to answer the questions and hypotheses of this study, we have conducted a series of data searches on accounting and technology databases from several international publications. The data we collect we examine using a phenomenological approach to search for as much data as possible to get plant parts that can answer this royal question. The process has involved data coding, data interpretation, and critical evaluation in obtaining relevant answers to questions. Based on the study and discussion of the data, we can conclude that several benefits and advantages are obtained when companies, especially the accounting department, can utilize digital applications in handling the company's financial work tasks, all of which are useful for improving the company's accounting performance. Hopefully, this new finding will be a significant input for efforts to develop a similar study in digital financial applications towards improving the accounting performance of both public and private companies.
... Linde et al. (2021) conducted a study to effectively evaluate digital business model opportunities and proposed a phased framework for avoiding three typical digitalisation traps based on a cross-case analysis of eight firms averaging 40,000 employees each. Gebauer et al. (2020) describe how manufacturing companies can successfully achieve revenue enhancement through digital offerings, conducting an explorative case-study approach on 27 companies in different industries, whose sizes range from 3000 to 48,000 employees. Jovanovic et al. (2021) study BtoB industrial digital platform architecture evolution in terms of services and governance, with founding evidence based on four global equipment manufacturers. ...
Article
The present article contributes to the theory of Business Model Innovation by incumbent firms via digital servitization. Our research explores the conditions affecting manufacturers' ability to innovate their business models by developing and supplying advanced, digitally-based services. The authors performed a Qualitative Comparative Analysis via a qualitative investigation of the novel business models adopted by 19 Italian small- and medium-sized incumbent manufacturers. Our study found a series of theoretically relevant causal factors for the targeted outcome variable: size and investments, customer intimacy, and external service suppliers are crucial paths for developing successful digitally-based advanced services. The findings suggest three managerial implications: first, managers must capitalise on corporate knowledge and assets, mapping and leveraging useful people and technologies. Second, they should seek external service providers related to technology and strategy/organisation to help them update the value proposition. Third, they must build and foster customer intimacy and capitalise on key customers, either leveraging the extant sales/field service structures or envisioning new direct data exchange channels.
... Many of the most valuable companies today have entered the resulting "Industry 4.0", relying heavily on advanced digital technologies in their business models and supply chains (Büyüközkan & Göçer, 2018;Choi, Wen, Sun, & Chung, 2019). According to several scholars (e.g., Gebauer et al., 2020;Kohtamäki, Parida, Oghazi, Gebauer, & Baines, 2019), Industry 4.0 technologies hold the key to reaping the benefits of digital servitization, defined as the "transformation in processes, capabilities, and offerings within industrial firms and their associate ecosystems to progressively create, deliver, and capture increased service value arising from a broad range of enabling digital technologies" (Sjödin, Parida, Palmié, & Wincent, 2021, p. 574). Some of the main challenges associated with digital servitization are rooted in external relationships and frictions between firms (Khanra, Dhir, Parida, & Kohtamäki, 2021;Porter & Heppelmann, 2014;Rabetino, Kohtamäki, Brax and Sihvonen, 2021). ...
Article
The exponentially growing literature on Industry 4.0 technologies and their implications for supply chains exhibits valuable insights alongside considerable fragmentation. While prior systematic literature reviews (SLRs) started to consolidate the literature, an SLR that simultaneously (a) covers several core technologies of the Industry 4.0, (b) synthesizes their positive and negative implications for supply chain performance in a broad sense, and (c) accounts for the critical success factors that foster or impede these implications is still missing. We contribute to establishing a cumulative body of knowledge by conducting such an SLR. We synthesize 221 articles published on 11 Industry 4.0 technologies between 2005 and 2021. Rather than aggregate implications, our SLR presents the benefits, challenges, and critical success factors of each core technology vis-à-vis supply chain performance individually. We integrate our findings into a framework of Industry 4.0 supply chain performance and derive promising avenues for future research. Specifically, we call for more research on (a) the challenges and critical success factors of Industry 4.0 technologies; (b) hitherto underexplored core technologies of the Industry 4.0; (c) the interaction of multiple core technologies (are they complements or substitutes?); as well as for (d) further consolidation and interdisciplinary dissemination efforts.
... Our analysis reveals that only about 15 papers matched the search for the term "Artificial Intelligence" and "AI" in IMM. Besides, most if not all of these articles were concerned with business investments (Plangger, Montecchi, Danatzis, Etter, & Clement, 2020), crisis management (Farrokhi, Shirazi, Hajli, & Tajvidi, 2020), and business model perspectives (Gebauer et al., 2020). This implies that there is minimal understanding of the B2B buyer-related phenomenon and the application of artificial intelligence (Agnihotri, 2020). ...
Article
Business-to-business (B2B) buying consists of a complex set of activities and processes involving numerous stakeholders and touchpoints that have attracted robust scholarly inquiry for several decades. This research extends the current knowledge on the B2B buying phenomenon by undertaking a broad literature review and offering a comprehensive agenda for future research. In particular, the paper focuses on the emerging use of concepts, theories, and frameworks from the consumer behavior (CB) literature to explain B2B buyer behavior. This approach represents a much-needed evolution in B2B buying research that breaks from the traditional research perspectives that have guided B2B buying research to date. Hence, this research addresses three goals: First, it reviews B2B buying studies in specialty B2B marketing journals and FT-50 marketing strategy journals to identify the predominant themes that guide the research in this stream of literature. Second, it assesses the use of CB theories and frameworks in grounding empirical examinations of B2B buying phenomenon. Third, the paper sets out a prospective agenda that highlights various research propositions related to B2B buying by leveraging key themes in the CB literature that are relevant to B2B buyer behavior research.
... The potential advantages of AI to develop multiple business models that provide customers with numerous advantages can be realized with AI-driven business models (31), by reducing costs, improving service quality, coordination, productivity, and improving delivery efficiency (7,11,32,33). Advances in AI have enabled organizations to shift from a product-centric model to a more advanced (i.e., platform or result-based) digital business model with higher value creation potential (10,34,35). ...
Full-text available
Article
The negative impact of COVID-19 pandemic has seen SME's struggling around the world. With many quickly adopting digital technologies, such as AI, in their manufacturing or services operations to achieve sustainable development. This study aims to develop a framework that informs AI-enabled sustainable development for SMEs by integrating the relevant research in the field. In this framework, we identify the opportunities that the deployment of AI technology can do to alleviate the plights of SMEs in the post-pandemic era, including the impacts on work, organizations, and performance. We further explore the challenges that SMEs face in AI transformation and recommend strategies to take on those challenges. Finally we propose an agenda for future research based on technological challenges and environmental threats.
... If obstructed with business model modifications, three different types of barriers (confidence, mixing, and collaboration) can increase revenue generated by digital offerings such as AI. B2B organizations must (1) match customer needs with digital offerings, (2) advance from descriptive to prescriptive analytics, and (3) build ecosystems for storing, analyzing, and combining data to produce data-driven solutions (Gebauer et al., 2020). From a sociological and experiential consumer context, Puntoni, Reczek, Giesler, and Botti (2021) identify both positive and negative effects of AI capabilities like listening (served vs. exploited), predicting (understood vs. misunderstood), producing (empowered vs. replaced), and interacting (connected vs. alienated). ...
Full-text available
Article
Artificial intelligence (AI) rests at the frontier of technology, service, and industry. AI research is helping to reconfigure innovative businesses in the consumer marketplace. This paper addresses existing literature on AI and presents an emergent B2B marketing framework for AI innovation as a cycle of the critical elements identified in cross-functional studies that represent both academic and practitioner strategic orientations. We contextualize the prevalence of AI-based innovation themes by utilizing bibliometric and semantic content analysis methods across two studies and drawing data from two distinct sources, academics, and industry practitioners. Our findings reveal four key analytical components: (1) IT tools and resource environment, (2) innovative actors and agents, (3) marketing knowledge and innovation, and (4) communications and exchange relationships. The academic literature and industry material analyzed in our studies imply that as markets integrate AI technology into their offerings and services, a governing opportunity to better foster and encourage mutually beneficial co-creation in the AI innovation process emerges.
... The previous literature on digital servitization provides detailed evidence of the transition from product manufacturing to the provision of smart solutions (Baines et al., 2020;Cusumano et al., 2015;Rabetino et al., 2021) and how manufacturers' business models change (Forkmann et al., 2017;Kohtamäki et al., 2019;Gebauer et al. 2020;Sjödin et al., 2020). However, it fails to present detailed microlevel evidence on how resources, capabilities (Coreynen et al., 2020;Ulaga and Reinartz, 2011), and associated processes and routines (Immelt, 2017(Immelt, , 2021 change when manufacturers move towards product-service-software solutions (Hsuan et al., 2021) even though it acknowledges that these elements are key sources of inertia in such a strategic transition (Lenka et al., 2018). ...
Full-text available
Article
The present study analyzes how a product manufacturer alters its strategic capabilities to become a smart solution provider by employing its dynamic capabilities. We scrutinize how a manufacturer facilitates strategic change by realigning its strategic capabilities and processes from a focus on technical product-development capabilities to product-service-software development capabilities, reconfiguring organizational routines focused on efficiency to routines focused on customer productivity, and shifting from a product logic to a service logic. By studying six leading manufacturing firms based on 86 manager interviews, the present study finds that strategic capabilities are renewed through dynamic capabilities, which involve a reconfiguration of strategic capabilities and processes. Furthermore, manufacturers need to consider the dynamic interplay between resource realignment modes (building digital capabilities, leveraging existing capabilities, accessing external capabilities, and releasing decaying capabilities), hence stressing their reinforcing mechanism to converge products, services, and software. For managers, our study highlights several strategic renewal practices designed to assist and benchmark how strategic capabilities are altered.
... Such smart, connected products let product companies extend their physical product and services offerings toward digital offerings-for example, digital services and software applications. Such digital offerings embrace more service-centric business models associated with letting customers pay for product usage, performance, or outcome, and/ or subscribing to the offering rather than buying the product (Gebauer et al. 2020;Paschou et al. 2020). Thus digital services transform revenue structures in product companies from non-recurring revenues into recurring revenues. ...
Article
The Internet of Things (IoT) offers product companies the opportunity to develop an IoT business. Existing performance measurement systems (PMS) are unsuitable for measuring and managing the business logic of IoT business. Based on research conducted with 31 product companies, we present three measurement traps, a key performance indicators (KPI) set suited for steering IoT business in product companies, and three recommendations for implementing the KPI set. Companies can use the KPI set to manage their IoT businesses more effectively and avoid the measurement traps.
... The rapid development of digital financial tools has drastically changed the work of financial organizations, transforming every aspect of their business models. Literature reviews [1][2][3][4][5][6][7][8] have shown that regardless of social and economic development level, most countries consider digitalization as a tool to strengthen their economic position in the world, which contributes to improving their stability and the welfare of their populations. ...
Full-text available
Article
Digitalization processes affect all levels and spheres of human activities, from personal communications to public events. The widespread implementation of digital technologies has an ambiguous effect on the personal, social, and economic paths of modern society’s development. At the moment, there is no single approach to the estimation of digitalization’s impact, particularly on the financial and economic properties of a company. The objective of this study was to create multiple models for the assessment of digitalization’s impact on company performance. To accomplish this objective, the following steps were performed: conducting a literature survey on the experience with digital technologies’ implementation; selecting the most appropriate mathematical tools for correlation and regression analyses; determining a functional relationship between the factors and consequences of digitalization in terms of companies’ performance; identifying digitalization factors, risks, and their impact on the financial sustainability of companies; and creating a multiple regression model of the functional relationship between digitalization factors and the financial sustainability of companies. In the course of the study, a correlation analysis of the dependence of companies’ financial sustainability on a number of digitalization factors has been conducted, and different ways of using company performance data as effective features and predictive factors are offered. The article includes sampling data on the parameterization and quality evaluation of multiple regression models. The validity of the multiple models suggested was tested with actual statistical data obtained from 16 Russian companies. The application of the multiple regression model was devised to estimate digitalization’s impact on companies’ performance, and their financial sustainability can be seen as the most important practical implication of this study.
... Some scholars have focused on the profitability of business models, such as Barua et al. (2004), who demonstrated empirically that traditional firms are using the Internet to change the way they align value with stakeholders to improve corporate performance. Gebauer et al. (2020) found through a case study that the business models of green manufacturing companies went through three dynamic stages of development, enhancing products, creating customer value, and integrating product portfolios to increase corporate revenues under a "hardware+" logic and a platform logic, respectively. Another group of scholars focused on the value creation network of business models and studied the impact of Industry 4.0 on the business models of green manufacturing companies in terms of value creation. ...
Full-text available
Article
In the era of Industry 4.0, the innovative applications of the industrial internet of things continue to deepen, and the trend of digital transformation of the green manufacturing industry continues to expand. In this context, the study of digital finance innovation in green manufacturing enterprises is conducive to transforming and upgrading enterprises and national economic development. In order to review the theoretical foundations and the current state of research under this topic, this paper provides an overview of digital finance innovation in green manufacturing companies based on 296 papers published between 1900 and 2021 through bibliometric and scientific visualization methods. This paper uses HistCite to identify the most influential authors, institutions, and countries and uncover the lineage of research on digital finance innovation in green manufacturing companies. At the same time, VOSviewer is used to identify research hotspots and research clusters under the topic. Finally, on this basis, this paper classifies the types of digital innovation from the perspective of value creation. It proposes a theoretical framework for the realization path of digital finance innovation in green manufacturing enterprises based on intelligent servitization and orchestration capabilities. The findings of this paper enrich the existing innovation theory and facilitate scholars to conduct future research more effectively.
... In addition, the users' perception of intimate relationships with service stakeholders and other users can be facilitated by continuous interaction based on SCPs and other digital channels. For instance, the service providers can provide real-time and online supports to solve the problem whenever users need assistance [35][36][37]. ...
Article
The rapid deployment of digital technologies drives the conventional product service system (PSS) to shift into a new paradigm known as smart PSS. Empowered with smart capabilities, smart PSS has great potential in creating positive user experience (UX). The requirements analysis is an essential task for successful development of smart PSS with strong UX. Nevertheless, there is still a lack of research on the requirement analysis of smart PSS by incorporating smart-enabled UX perspective. Hence, this paper proposes a framework of user experience-oriented smart service requirement (UXO-SSR) analysis for smart PSS development. At first, the relevant factors (e.g., user personas and activity journey) are integrated to conceptualize the UX in smart PSS context. Second, a four-phase model is proposed for identifying UXO-SSR, which can provide an effective tool for acquiring UX requirements of smart PSS from holistic perspective. Third, a novel asymmetric trapezium cloud-based uncertain linguistic BWM approach is developed to evaluate the priority of the identified UXO-SSRs. The approach can appropriately handle the hybrid uncertainties (i.e., hesitancy, fuzziness and randomness) of linguistic evaluation information, thereby improving the accuracy of evaluation results. Finally, a case study of smart sleep service system is presented to demonstrate the feasibility and reliability of the proposed framework.
... We detail how the process unfolds over four phases: mapping digital opportunities, selecting digitalization partners, codeveloping digital solution contracts, and promoting continuous digital innovation. Thus, we complement existing studies on the procurement process (e.g., [24]) and provide additional contingencies for digital servitization (e.g., [6], [27]). Third, we summarize our findings in an overall framework for Procurement 4.0, highlighting key overarching principles for capturing business value from digital innovation. ...
Article
The rapid development of digital technologies can revolutionize industrial companies’ operations through the procurement and application of digital solutions following a logic of digital servitization. However, industrial customers must refine their internal processes to exploit the potential servitization. In this transition, the procurement organization is pivotal in orchestrating relationships between its internal functions and supplier's ecosystems. Yet, traditional procurement processes are poorly suited to the evaluation and procurement of digital servitization offerings, hampering value cocreation between suppliers and customers. The purpose of this article is to investigate how procurement process models can be adapted to address the opportunities and challenges of digital servitization for industrial customers. The investigation is based on a case-study design, drawing on data collected through in-depth interviews with informants from 11 leading customers and 8 global suppliers. Based on the data analysis following the Gioia methodology, in this article, we describe key challenges with the traditional approach and identify novel procurement practices to capture value from digitalization. The article's key contribution is to propose a process model for Procurement 4.0, highlighting four phases: mapping digital opportunities, selecting digitalization partners, codeveloping digital solution contracts, and promoting continuous digital innovation. Furthermore, we define three overarching principles for procurement 4.0: nurture digital ecosystem generativity, orchestrate cross-functional integration, and leverage supplier capabilities through agile cocreation.
... However, servitization in general and digital servitization in particular are highly challenging for organizations because of the need for customer contacts to realize service design through co-creation as well as the pace of change and complexity of digital systems (Gebauer et al., 2020;Grönroos, 2011). Nowadays, servitization requires manufacturers to adopt open innovation strategy to transform their products into platforms that incorporate outside in (using external partners' ideas in a firm's own business) and inside out (allowing external partners to use a firm's ideas in their businesses) knowledge and solutions. ...
Full-text available
Article
Services constitute strategic components of firms’ value proposition, specifically for manufacturing firms currently called to servitize their products to develop product-service systems. In order to develop new services, they need to acquire, assimilate, transform and exploit external knowledge, thereby partnering with external stakeholders, a strategy labelled open service innovation. Yet research on innovation management in general and open innovation in particular has mostly focused on product innovation, leaving this area of research scantly understood. This is particularly true for manufacturing firms involving a family in the business, namely family manufacturing firms, acknowledged for adopting distinctive innovation behavior. With the intention of addressing this gap, we conceptually investigate open service innovation in family manufacturing firms by embracing a relational perspective. In so doing, we identify drivers and contingencies of family manufacturing firms’ innovation behavior that might trap them in their own net(work) and suggest managerial solutions to escape from such trap.
Article
Purpose Digital solutions (DS) that build on recurring revenue models (RRMs) offer new opportunities to continuously create and capture superior value. However, many firms fail to engage their sales force in digital solution selling (DS selling), leading to agency problems that receive little attention in literature. This study aims to examine the drivers of agency problems that surface in the transition toward DS selling and the sales control systems that resolve these problems. Design/methodology/approach The authors conducted a qualitative, inductive study. Data were collected from interviews with 72 marketing and sales managers representing 53 industrial firms transitioning toward DS selling. Findings DS selling is subject to adverse selection and moral hazard caused by motivation-related, opportunity-related and ability-related drivers. Input, capability, activity and outcome controls – detailed in this study – can resolve these agency problems. Research limitations/implications The limitations of this study’s methodology and scope suggest several directions for future research. Methodology-wise, the authors mainly relied on cross-sectional interview data from informants in Central and Northern Europe. Scope-wise, more research is needed on the capabilities, processes and steering instruments supporting DS sales. Finally, only now do the authors begin to understand which compensation plans motivate DS selling. Practical implications The controls identified in this study help managers to steer their sales force in DS sales. Originality/value To the best of the authors’ knowledge, this study is the first to investigate DS sales control systems. Thereby, the authors enhance prior understandings of solution selling, agency problems and sales control systems.
Article
Supporting fast and extensive data transfer, connectivity technologies entail opportunities for stronger inter-firm collaboration and new value propositions, resulting in business model innovation. Whereas prior research has mainly focused on connectivity-induced changes in the business models of ecosystem orchestrators, we turn our attention to (prospective) ecosystem complementors. We examine how digital service providers can configure business model mechanisms to enter an ecosystem and connect themselves to its value proposition. Based on an explorative qualitative study of four cases in mobility, we develop four archetypical connection strategies for complementors. We observe that the four archetypes differ in their implications for the ecosystem value proposition, for the role of other actors in the ecosystem, and the triple-bottom-line performance of the ecosystem. Connectivity technologies can combine economic, environmental, and social benefits.
Article
Purpose This study aims to investigate the complex relationship between digitalization capability (DC) and radical innovation performance (RIP). In particular, this study sheds new light on the results of previous studies on the effects of DC on firm innovation. Design/methodology/approach The authors obtained questionnaire data from 271 IT managers of randomly selected high-tech Chinese firms. The data was used to empirically test the proposed hypotheses using hierarchical regression analysis. Findings The findings of this study reveal that DC has an inverted U-shaped effect on RIP. Knowledge accumulation (KA) has a partial mediating effect on the DC–RIP link. Knowledge integration capability (KIC) was found to moderate the DC–RIP relationship: the higher a firm’s KIC, the flatter the DC–RIP curve. Moreover, there is empirical evidence of the shape-flip phenomenon of the DC–RIP curve: when KIC > 1.82, the DC–RIP relationship is no longer an inverted U-shaped but presents as a U-shaped curve. Research limitations/implications This study explores the DC–RIP relationship from the perspective of knowledge management, deepens the research scope of digitalization and lays the foundation for subsequent research. Originality/value This study provides potential explanations for contradictory views of the effect of DC on innovation in the existing literature by revealing the nonlinear relationship of DC and RIP and the important roles of KA and KIC in that relationship. The new insights into the role of KIC as a threshold for the DC–RIP link provide a direction for firms to control the pace of digital transformation.
Chapter
Manufacturing companies operate in global environments where competition is increasingly aggressive. To remain competitive, they need to differentiate themselves by updating and expanding their offerings to customers, for instance through the digitalization and servitization phenomena, which allow companies to innovate business models in this direction. This paper deals with an analysis of the subscription business model, which has recently attracted the attention of manufacturing companies for the possibility to establish long-term partnerships with customers by providing services on a continuous basis in return of recurring payments. After a first analysis of the literature on this topic, the effective implementation of the subscription model in the manufacturing environment is analyzed through a case study. The analysis shows that the development of subscription models is strengthened by the utilization of digital tools since they enable processing customers’ data for new service offering generation, leading companies to differentiate their business towards customer-centric solutions. In conjunction, the case study shows how barriers to the implementation of subscription models in the manufacturing sector are still present. Despite this, the Covid-19 pandemic has highlighted the potential of this offer, allowing companies to stay in touch with their customers, and to maintain, or even increase, the revenue streams.
Article
Strategic management has extensively contributed to the development of business model research. Although marketing concepts (e.g., customers, value creation, delivery, and exchange) form an essential part of any business model description, from an academic standpoint, the strategy literature has been slow to incorporate contributions from the marketing literature on business model research. Drawing on mixed bibliometric techniques combining co-citation analysis (CCA) and bibliographic coupling analysis (BCA), we seek to fill this gap by exploring the origins and trends of business model research in marketing journals (285 articles published in 38 marketing journals). The CCA reveals three theoretical pillars labelled ‘business model rationale in marketing’, ‘business model conceptual origins’, and ‘business model literature developments’ that provide a consistent base for cross-fertilization. The BCA uncovers eight conversations organized into two research streams, namely ‘holistic perspective’ and ‘downstream perspective’. Considering these results, we discuss the partial appropriation of marketing issues by strategists and propose a three-pronged research agenda based on consumer data as a major source of competitive advantage.
Article
Stakeholders' pressure for environmental sustainability asks firms to develop ecosystem-based business models (EBMs) driven by a disruptive technology that strategically prioritizes green innovation. Given the infancy of the relevant issues, there is scarce empirical evidence addressing how blockchain technology (BT) as a typical disruptive technology triggers the formation of EBMs with higher levels of platformisation and stakeholder diversity. To address this need, from the dynamic capability view, we identify value appropriation capability (VAC) as a vital catalyst translating BT into realizing green innovation in EBMs. Our results indicate that BT and VAC positively affect green innovation performance, while VAC also mediates the BT-green innovation relationship in EBMs. The main contribution is to offer new insight into the mechanisms between disruptive technology and the evolution towards EBMs through the lens of a previously under-researched dynamic capability, VAC. We also provide feasible, practical guidance for organizations to inspire green innovation and establish sustainable EBMs.
Full-text available
Article
The present study extends the discussion on product manufacturers' digital servitization toward smart solutions by outlining and reviewing the existing literature on digital servitization and smart solutions. We focus on potential configurations based on technologies, business models, and ecosystems to understand how this transition can be managed through the process of reconfiguration. We define smart solutions as an advanced state of product-service-software systems, and we use moving vehicles as a case in point. We base our discussion on a configurational research approach, examining the role of advanced technologies (e.g., artificial intelligence), novel business models, and modern ecosystems (e.g., platforms and innovation ecosystems) in shaping digital servitization toward smart and autonomous solutions. We identify gaps in the literature, offer an analytical framework, suggest avenues for future research, and contribute by laying the theoretical foundations and proposing managerial directions for a digital servitization journey toward smart solutions. By so doing, we present the papers accepted to the current IMM special issue on “Moving toward autonomous solutions: The role of Product-Service-Software Systems”, which this review article introduces.
Chapter
The transformation process from a product-oriented company to a service-oriented company is known as servitization. The following research focuses on how a shared understanding of servitization can be enhanced through the application of business model design methods and discusses the role of co-creation in this process. The continuous adaptation of the business model is crucial to move from the exploration phase to the engagement phase in the servitization process and to overcome the tipping points between these two phases through a common understanding and conviction. The research at hands ads to literature as it discusses how a business model analysis, and the applied methods support the development of a shared understanding.KeywordsServitizationBusiness modelShared framework
Article
Industry 4.0 is dramatically affecting firms' strategies. In particular, technologies like the Internet of Things (IoT) are offering firms the possibility to manage product functions, remotely and globally, enabling the design of innovative business models. The aim of the article is to investigate how incumbent small and medium enterprises can manage the evolution of a new IoT-based business model in parallel with its extant one. A qualitative and longitudinal case study research has been conducted on two Italian firms involved in a process of IoT-driven business model innovation. The empirical evidence show that the process of business model innovation is incremental in terms of resources dedicated to the new business, with a fine tuning based on trial-and-error learning. During the phases of this process, namely inception, experimentation, and replication, the effective management of the interaction between the two business models with their dedicated resources and the customer-related capabilities play a crucial role.
Article
Purpose As various different and even contradictory concepts are proposed to depict a firm's capabilities related to big data, and extant relevant research is fragmented and scattered in several disciplines, there is currently a lack of holistic and comprehensive understanding of how big data alters value creation by facilitating firm capabilities. To narrow this gap, this study aims to synthesize current knowledge on the firm capabilities and transformation of value creation facilitated by big data. Design/methodology/approach The authors adopt an inductive and rigorous approach to conduct a systematic review of 185 works, following the “Grounded Theory Literature-Review Method”. Findings The authors introduce and develop the concept of big data competency, present an inductive framework to open the black box of big data competency following the logic of virtual value chain, provide a structure of big data competency that consists of two dimensions, namely, big data capitalization and big data exploitation, and further explain the evolution of value creation structure from value chain to value network by connecting the attributes of big data competency (i.e. connectivity and complementarity) with the transformation of value creation (i.e. optimizing and pioneering). Originality/value The big data competency, an inclusive concept of firm capabilities to deal with big data, is proposed. Based on this concept, the authors highlight the significant contributions that extant research has made toward our understanding of how big data alters value creation by facilitating firm capabilities. Besides, the authors provide a future research agenda that academics can rely on to study the strategic management of big data.
Article
Purpose: The emergence of Internet of Things (IoT) platforms in product companies opens up new data-driven business opportunities. This paper looks at the emergence of these IoT platforms from a business-model perspective. Design/methodology/approach: The study applies a mixed method with two research studies: Study I–a cluster analysis based on a quantitative survey, and Study II–case studies based on qualitative interviews. Findings: The findings reveal that there is no gradual shift in a company's business model, but in fact three distinct and sequential patterns of business model innovations: (1) platform skimming, (2) platform revenue generation and (3) platform orchestration. Research limitations/implications: The results are subject to the typical limitations of both quantitative and qualitative studies. Practical implications The results provide guidance to managers on how to modify the components of the business model (value proposition, value creation and/or delivery and profit equation) in order to enable platforms to advance. Social implications: As IoT platforms continue to advance, product companies achieve better performance in terms of productivity and profitability, and more easily secure competitive advantages and jobs. Originality/value: The paper makes three original contributions: (1) it is the first quantitative study on IoT platforms in product companies, (2) identifies three patterns of business model innovations and (3) offers a first process perspective for understanding the sequence of these patterns as IoT platforms advance.
Chapter
The steady rise of new digital technologies offers many opportunities for business model innovation in different industries. This also affects more traditional companies, which need to keep up with technological development to be able to compete with innovative firms. Notably, the Industry 4.0 paradigm has largely drawn the attention on digital-driven business model innovation among manufacturing companies, while less is known about how this is developing in other industries. This chapter aims at filling this gap and contributes to an ongoing debate by providing a thorough analysis of a digital-driven business model innovation in a product/service firm, thereby showing how data can act as an enabler of change and innovation in existing organizations.
Full-text available
Conference Paper
This paper aims to introduce the case for digital transformation of business models (DTBM) via artificial intelligence (AI) as it takes place in the Israeli InsurTech. For this purpose, we have mapped that landscape using archival data and conducted 10 semi-structured interviews with experts in the field. External (e.g. Change in the customers' preferences) and internal challenges (e.g. low IT capabilities) have highlighted the need for DTBM with AI technology playing an important role as a driver for such. In this paper, we introduce these challenges and the value-creation opportunities AI entails within the industry. We also present how Israeli InsurTech start-ups shape the industry, solve challenges, and create value. In this way, we help bridge many gaps, e.g. how AI is used for value creation, how Data-Driven-Business-Models rely on big-data analytics as key activity for value creation, and how DTBM innovation generally works in practice.
Full-text available
Article
Despite the increasing attention on the role of the business model in affecting firm performance , knowledge of how to leverage the influence of business models remains scarce. Drawing on resource orchestration theory, we theorize how firm capabilities, such as technology capability and marketing capability, moderate the relationship between the business model and firm performance in the context of small and medium-sized enterprises (SMEs). Matched survey data and objective performance data were collected from 140 Chinese manufacturing SMEs in two waves to test our model. The results reveal that the interaction of the efficiency-centered business model with technology capability and the interaction of the novelty-centered business model with marketing capability both positively impact SME performance. Theoretical and practical insights on how firm capabilities can leverage the performance impact of business models are discussed.
Article
Over the last few years digital servitization has become a very popular topic in the industrial marketing and technology management literature. The present article contributes to the extant literature on business models for digital servitization by investigating the roles and effects of prior technological knowledge. To date, this rich and growing body of literature has underestimated a crucial corporate asset for value creation, and that is firms’ past experience and knowledge. Such a corporate heritage may have relevant implications for a firm's approach and decisions regarding digital servitization, however, especially if it is related to one (or more) of the I4.0 technologies. The research question posed in the present article is thus: how does a company's prior knowledge affect its digital servitization strategies? To answer this question, we conducted a multiple case study, collecting and analyzing primary and secondary data about Italian medium- to large-sized enterprises that had recently implemented digital servitization. The findings illustrate the different effects of the technological solutions adopted on the companies’ business models, and delineate an inductive matrix with four different ideal-typical business models: expert industrializer; explorative solutioner; explorative industrializer; and expert solutioner.
Full-text available
Article
Artificial intelligence (AI) is predicted to radically transform the ways manufacturing firms create, deliver, and capture value. However, many manufacturers struggle to successfully assimilate AI capabilities into their business models and operations at scale. In this paper, we explore how manufacturing firms can develop AI capabilities and innovate their business models to scale AI in digital servitization. We present empirical insights from a case study of six leading manufacturers engaged in AI. The findings reveal three sets of critical AI capabilities: data pipeline, algorithm development, and AI democratization. To scale these capabilities, firms need to innovate their business models by focusing on agile customer co-creation, data-driven delivery operations, and scalable ecosystem integration. We combine these insights into a co-evolutionary framework for scaling AI through business model innovation underscoring the mechanisms and feedback loops. We offer insights into how manufacturers can scale AI, with important implications for management.
Full-text available
Conference Paper
Summary: We break the concept of Industry 4.0 down into a series of technologies and look whether their adoption influences industrial firms’ servitization indicators. Likewise, we assess whether the existence of prior digital skills and training initiatives to work with the adopted technologies influence company scores on these indicators. We establish that there is a stronger influence on the development of intelligent services than on revenue generation from services. 1. INTRODUCTION Digitalization has been hailed many times as a catalyzer for servitization. Similarly, Industry 4.0 has been portrayed as an enabler for smart service development. However, in such occasions either digitalization and/or Industry 4.0 are often referred to in generic terms or as container concepts. Rarely are they broken down into a series of constituent technologies to see their relationship with (forms of) servitization. Therefore, in our proposed contribution we follow Gilchrist (2016) and dissect Industry 4.0 into 9 technologies that companies can apply, and look whether these have an impact on company’s servitization behaviour. We also look whether prior availability of specific (digital) skills inside the company adopting the respective technologies influences the servitization behaviour. Similarly, we look whether the companies count with a training strategy and programmes to prepare the employees for working with the technologies adopted. We draw from a survey organized in 2019 among industrial firms from the Basque Country, which resulted in valid 271 answer sets. 2. THEORETICAL BACKGROUND Our work combines insights from studies that look into the concept of Industry 4.0 and servitization. Furthermore, it builds upon studies that investigate the role of skills and training for service business development amidst industrial companies (Marcos Martínez and Martín Peña, 2016). Industry 4.0 refers to a family of technologies that entail the use and coordination of information, automation, computation and sensing activities (Acatech 2015; Posada et al. 2015). Servitization refers both to industrial firms expanding their service business and income from services (Vandermerwe and Rada, 1988) and to their attempts of sophisticating or making their service offering more advanced (Baines and Lightfoot, 2013). Skills crafting and training for service business is an area that has been approached from a knowledge development angle (Maglio and Spohrer, 2008) and a competence shaping perspective (Barile and Saviano, 2013) with regards to servitization behaviour. 3. RESEARCH METHODOLOGY We process data from a large-scale survey drawn from 271 industrial firms. As independent variables we look at: the adoption of 9 technologies that correspond to Gilchrist’s (2016) categorization of Industry 4.0. Similarly, we enquire after the existence of prior digital skills to work with the adopted technologies in the company, and whether the company counts with a training strategy and/or programme to allow employees getting to grips with the implemented technologies. As dependent variables, regarding servitization behaviour, we look at income generation from services and the development of intelligent services as a consequence of the adoption of the respective technologies. We control for company size in terms of number of employees and annual turnover. We formulate corresponding hypotheses and test these by means of hierarchical logistic regressions. 4. FINDINGS We find that certain technologies are more likely to boost the servitization of business than others. In addition, we find that the uptake of Industry 4.0 technologies is more likely to foster the development of intelligent services than the generation of income from services. Alternatively, Industry 4.0 technologies seem to have more impact on the “smartization of services” than on the “servitization of revenues”. This also leads us to think that the offering of intelligent services requires more technology, or are more technology-intensive, than services in general. As for the relevance of available skills and training schemes, we find that the implementation of training strategies for the right utilization of new technologies raises the chances of companies developing intelligent services. 5. THEORETICAL AND PRACTICAL CONTRIBUTIONS The findings show that developing services is one thing, but that charging for them is another thing. This may hint at industrial companies having difficulties of shifting from “services for free” to “services for a fee” or that they tend to offer integrated “product service offerings” or “package deals”, where the service part is not charged or accounted for separately. They also provide insights on the relevance of skills development for exploiting Industry 4.0 technologies for the sake of servitization. Finally, the study raises questions around how to conceptualize and measureservitization behaviour. I.e., depending on the way that servitization behaviour is measured, its determinants could vary to a great extent.
Full-text available
Article
Purpose This study aims to enhance the theoretical foundations of servitization research by establishing a theoretical connection with complexity management. The authors develop a conceptual framework to describe complexity management mechanisms in servitization and digital platforms' specific role in allowing synergies between complexity reduction and absorption mechanisms. Design/methodology/approach A theory adaptation approach is used. Theory adaptation introduces new perspectives and conceptualization to the domain theory (servitization, with a focus on the role of digital platforms) by informing it with a method theory (complexity management). Findings This study provides four key contributions to the servitization literature: (1) connecting the servitization and complexity-management terminologies, (2) identifying and classifying complexity-management mechanisms in servitization, (3) conceptualizing digital platforms' role in servitization complexity management and (4) recognizing digital platforms' complexity-management synergies. Originality/value This study highlights that by using digital platforms in servitization and understanding the platform approach more thoroughly, companies can gain new capabilities and opportunities to manage and leverage complexity.
Conference Paper
The Internet of Things (IoT) is enabling new business opportunities for companies in various B2B environments. Many companies are investing in developing data-driven business models around IoT platforms. However, there is still little systematic research on the elements and patterns of these business models. Based on an exploratory study in the energy industry, this paper examines patterns and elements of business models in the IoT platform context. Furthermore, based on a qualitative study, IoT platform differences and similarities of companies at different position in the value chain are considered.
Article
Purpose The purpose of this paper is to provide a theoretical lens on digital servitization (DS) for future research purposes. By developing a multilevel framework that helps structure and untangle its complexity, the authors aim to increase understanding into the persistent challenge of DS. Design/methodology/approach Building on a problematization approach, critical incident technique was applied to a comparative, longitudinal, multiple-case study in which DS journeys from one Italian and one Belgian manufacturing firm were analyzed. Findings Analysis revealed that different levels and elements of the multilevel framework were simultaneously involved in the identified critical incidents. This huge interconnectedness severely challenged the DS journeys. Managerial (un)responsiveness played a central role in the organizational outcome for both firms. Originality/value The authors answer the call for a more holistic approach toward DS. A multilevel framework is provided to be employed by future researchers and practitioners alike. A mid-range theory for DS and propositions for future research are developed.
Article
Purpose This study shows various pathways manufacturers can take when embarking on digital servitization (DS) journeys. It builds on the DS and modularity literature to map the strategic trajectories of product–service–software (PSSw) configurations. Design/methodology/approach The study is exploratory and based on the inductive theory building method. The empirical data were gathered through a workshop with focus groups of 15 servitization manufacturers (with 22 respondents), an on-site workshop (in-depth case study), semi-structured interviews, observations and document study of archival data. Findings The DS trajectories are idiosyncratic and dependent on design architectures of PSSw modules, balancing choices between standardization and innovation. The adoption of software systems depends on the maturity of the industry-specific digital ecosystem. Decomposition and integration of PSSw modules facilitate DS transition through business model modularity. Seven testable propositions are presented. Research limitations/implications With the small sample size from different industries and one in-depth case study, generalizing the findings was not possible. Practical implications The mapping exercise is powerful when top management from different functional departments can participate together to share their expertise and achieve consensus. It logs the “states” that the manufacturer undergoes over time. Originality/value The Digital Servitization Cube serves as a conceptual framework for manufacturers to systematically map and categorize their current and future PSSw strategies. It bridges the cross-disciplinary theoretical discussion in DS.
Full-text available
Article
Manufacturers increasingly look to digitalization to drive service growth. However, success is far from guaranteed, and many firms focus too much on technology. Adopting a discovery-oriented, theories-in-use approach, this study examines the strategic organizational shifts that underpin digital servitization. Notwithstanding strong managerial and academic interest, this link between digitalization and servitization is still under-investigated. Depth interviews with senior executives and managers from a global market leader revealed that to achieve digital service-led growth, a firm and its network need to make three interconnected shifts: (1) from planning to discovery, (2) from scarcity to abundance, and (3) from hierarchy to partnership. Organizational identity, dematerialization, and collaboration play a key role in this transformation. For managers, the study identifies a comprehensive set of strategic change initiatives needed to ensure successful digital servitization. Highlights: • Three strategic organizational shifts are needed for digital servitization success. • The key role of organizational identity, dematerialization, and collaboration • Digital servitization requires changes within both the firm and its entire network. • New business models centered around big data are driving competitive advantage. • Agile mindset and ways of working are imperative for digital servitization.
Full-text available
Article
The present study investigates the effect of the interaction between digitalization and servitization on the financial performance of manufacturing companies. We challenge the simple linear assumption between digitalization and financial performance with a sample of 131 manufacturing firms and hypothesize a nonlinear U-shaped interaction effect between digitalization and servitization on financial performance. From low to moderate levels of digitalization, the interaction effect between digitalization and high servitization on company financial performance is negative and significant. From moderate to high levels of digitalization, the interplay between digitalization and high servitization becomes positive and significant, improving companies’ financial performance. The results demonstrate the need for an effective interplay between digitalization and servitization, the digital servitization. Without this interplay, a manufacturing company may face the paradox of digitalization. For managers of manufacturing companies, the study provides insights into the complex relationship between digitalization and financial performance, emphasizing the value of servitization in driving financial performance from digitalization. Thus, the study demonstrates how manufacturing companies can become data-driven by advancing servitization.
Full-text available
Article
Data based on qualitative judgments are prevalent in both academic research in marketing and applied marketing research. Reliability measurement of qualitative data is important to determine the stability and quality of the data obtained. The authors assume a decision theoretic loss function, formally model the loss to the researcher of using wrong judgments, and show how this produces a new, proportional reduction in loss (PRL) reliability measure that generalizes many existing quantitative and qualitative measures. Because the PRL measure is often cumbersome to compute directly, they provide reference tables that enable the researcher to apply their approach easily. They then use this new approach to explore several important practical issues in conducting marketing research with qualitative judgments. In particular, they address the issues of (1) how reliable qualitative data should be (extending directly from Nunnally's rule of thumb for Cronbach's alpha in quantitative measurement), (2) how many judges are necessary given a known proportion of agreement between judges, and (3) given a fixed number of judges, what proportion of agreement must be obtained to ensure adequate reliability.
Full-text available
Conference Paper
The convergence of services and digital technologies is generating unprecedented opportunities in manufacturing, by adding value to products, allowing more efficient processes, and supporting improved managerial decisions with richer, faster and sounder information. Yet, despite its high relevance, there is still a lack of scientific knowledge regarding this phenomenon. We analyse the merging trends of manufacturing digitization and servitization with the main purpose to describe and explain if and how the evolving technological landscape facilitates, habilitates and supports manufacturing servitization. More specifically this paper aims to put the current knowledge on the topic into order. We present a systematic review of the scientific literature concerning how digital technologies enable ser-vitization in manufacturing, as the first step of a research programme on how these two megatrends are jointly disrupting resources, competences, skills and consequently business models. We show that the knowledge about how digital technologies support service transformation in manufacturing is still at an early stage and rather limited. Then, key challenges and future research directions within this topic are highlighted.
Full-text available
Article
This paper presents a review of the Internet-of-Things (IoT) through four conceptualizations: IoT as liquification and density of information of resources; IoT as digital materiality; IoT as assemblage or service system; and IoT as modules, transactions, and service. From the conceptualizations, we provide a definition of IoT and present its implications and impact on future research in Marketing that interfaces with information systems, design and innovation, data science and cybersecurity, as well as organizational studies and economics. By integrating the implications of IoT with extant literature, we then propose a set of priorities for future research in this area.
Full-text available
Article
There is a broad consensus that the transformative power of the Internet of Things (IoT) will affect all kinds of industries; or, to put it in a more optimistic light, that almost no domain is excluded from the opportunities to leverage the IoT. But, what does this mean for the future of industrial processes? This article introduces the concept of high-resolution management (HRM). IoT enables the collection of high-resolution data for the physical world where, as in the digital world, every aspect of business operations can be measured in real-time. This capability facilitates high-resolution management, such as short optimization cycles in industrial production, logistics and equipment efficiency, comparable to methods like A/B-Testing or Search Engine Optimization, which are state of the art in digital business. We take the following two perspectives on leveraging high-resolution management. First, through greater insights into their industrial processes, companies that apply HRM in their operations are able to achieve higher efficiency, quality and flexibility. The example of vehicle fleet management illustrates this effect. Second, we build upon the St. Gallen Business Model Navigator in order to look in greater detail on how the IoT affects industrial processes. Gassmann et al. Gassmann, O., Frankenberger, K., and Csik, M. (2014). The business model navigator: 55 models that will revolutionise your business. Financial Times. introduce 55 generic business model patterns, of which our extended research identified 20 that could profit significantly from the IoT Fleisch, E., Weinberger, M., and Wortmann, F. (2014). Geschäftsmodelle im Internet der Dinge. HMD Praxis der Wirtschaftsinformatik, 51(6), 812–826; Gassmann, O., Frankenberger, K., and Csik, M. (2014). The business model navigator: 55 models that will revolutionise your business. Financial Times. . Analyzing these 20 patterns allowed for the identification of six key components: Remote Usage and Condition Monitoring , Object Self Service , Digital Add-on , Digital Lock-in , Product as a Point of Sales and Physical Freemium . These building blocks help companies to supply HRM-supported offerings. Finally, the example of remote monitoring of process parameters shows that these business model components can also be deployed to create offerings that enable others to apply HRM.
Full-text available
Article
Purpose The purpose of this paper is to consolidate the servitization knowledge base from an organizational change perspective, identifying developed, developing and undeveloped topics to provide a platform that directs future research. Design/methodology/approach This paper addresses three objectives: it comprehensively examines organizational change management literature for selection of a theoretical framework; it classifies extant studies within the framework through a systemic literature review; and it analyses 232 selected papers and proposes a research agenda. Findings Analysis suggests increasing global awareness of the importance of services to manufacturers. However, some topics, especially related to servitization transformation, remain undeveloped. Research limitations/implications Although the authors tried to include all publications relevant to servitization, some might not have been captured. Evaluation and interpretation relied on the research team and subsequent research workshops. Practical implications One of the most significant challenges for practitioners of servitization is how to transform a manufacturing organization to exploit the opportunity. This paper consolidates literature regarding servitization, identifying progress concerning key research topics and contributing a platform for future research. The goal is to inform research to result eventually in a roadmap for practitioners seeking to servitize. Originality/value Although extant reviews of servitization identify themes that are examined well, they struggle to identify unanswered questions. This paper addresses this gap by focusing on servitization as a process of organizational change.
Full-text available
Article
This study addresses the question of how established organizations develop new business models over time, using a process research approach to trace how four business model innovation trajectories unfold. With organizational learning as analytical lens, we discern two process patterns: ‘drifting’ starts with an emphasis on experiential learning and shifts later to cognitive search; ‘leaping’, in contrast, starts with an emphasis on cognitive search and shifts later to experiential learning. Both drifting and leaping can result in radical business model innovations, while their occurrence depends on whether a new business model takes off from an existing model and when it goes into operation. We discuss the implications of these findings for theory on business models and organizational learning.
Full-text available
Article
The Whitepaper can be downloaded on http://www.iot-lab.ch/?page_id=10738
Full-text available
Article
Unternehmen, die heute primär in nicht-digitalen Branchen agieren, benötigen theoretisch und praktisch fundierte Hilfestellungen bei der Entwicklung und Umsetzung von Geschäftsmodellen im Internet der Dinge (Internet of Things, IoT). Durch unsere Untersuchung der Rolle des Internet in Geschäftsmodellen kommen wir zum Schluss, dass die Bedeutung des Internet in der Geschäftsmodellinnovation seit den 90er Jahren laufend zugenommen hat, dass jede Internet-Welle zu neuen digitalen Geschäftsmodellmustern geführt hat und dass die größten Umbrüche bisher in digitalen Branchen stattgefunden haben. Wir zeigen, dass digitale Geschäftsmodellmuster neu auch in der physischen Industrie relevant werden. Die Trennung von physischen und digitalen Branchen ist damit endgültig vorbei. Der Schlüssel dazu ist das IoT, das physische Produkte und digitale Services zu hybriden Lösungen verschmelzen lässt. Wir leiten eine sehr allgemein gehaltene Geschäftsmodelllogik für das IoT ab und stellen konkrete Bausteine und Muster von Geschäftsmodellen vor. Für die zentralen Herausforderungen bei der Umsetzung solcher hybriden Geschäftsmodelle zeigen wir erste Lösungsansätze auf.
Full-text available
Article
The bottom of the pyramid (BOP) in the global distribution of income has been promoted as a significant opportunity for companies to grow profitably. Under the BOP approach, poor people are identified as potential customers who can be served if companies learn to fundamentally rethink their existing strategies and business models. This involves acquiring and building new resources and capabilities and forging a multitude of local partnerships. However, current BOP literature remains relatively silent about how to actually implement such a step into the unknown. We use two BOP cases to illustrate a strategic framework that reduces managerial complexity. In our view, existing capabilities and existing local BOP models can be leveraged to build new markets that include the poor and generate sufficient financial returns for companies to justify investments.
Full-text available
Article
Digital technology is increasingly important in achieving business goals, and its pervasive effects have resulted in the radical restructuring of entire industries. Consequently, managers’ extensive interest in handling digital innovation is not surprising. Recent research has illustrated how digital technologies give rise to a vast potential for product and service innovation that is difficult to control and predict. Therefore, firms need dynamic tools to support themselves in managing the new types of digital innovation processes that emerge. The nature of these processes forces firms to challenge prior assumptions about their product and service portfolio, their digital environment, and ways of organizing innovation work. In this article, we present a managerial framework that supports firms in this undertaking. The framework, geared at supporting ongoing improvements in digital innovation management, covers five key areas: user experience, value proposition, digital evolution scanning, skills, and improvisation. We also present a diagnostic tool that can be utilized as firms begin the process of implementing the framework. Finally, we conclude with our thoughts on the managerial implications of the framework when going forward in a rapidly changing digital innovation landscape.
Full-text available
Article
Our era is one of increasingly pervasive digital technologies, which penetrate deeply into the very core of the products, services, and operations of many organizations and radically change the nature of product and service innovations. The fundamental properties of digital technology are reprogrammability and data homogenization. Together, they provide an environment of open and flexible affordances that are used in creating innovations characterized by convergence and generativity. An analysis of convergence and generativity observed in innovations with pervasive digital technologies reveals three traits: (1) the importance of digital technology platforms, (2) the emergence of distributed innovations, and (3) the prevalence of combinatorial innovation. Each of the six articles in this special issue relates to one or more of these three traits. In this essay, we explore the organizational research implications of these three digital innovation traits and identify research opportunities for organization science scholars. Examples from the articles in this special issue on organizing for innovation in the digitized world are used to demonstrate the kind of organizational scholarship that can faithfully reflect and inform innovation in a world of pervasive digital technologies.
Full-text available
Article
Sustainable technologies challenge prevailing business practices, especially in industries that depend heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the specific characteristics of sustainable technologies into new ways to create economic value and overcome the barriers that stand in the way of their market penetration. A key issue is the respective impact of incumbent and entrepreneurial firms’ path-dependent behaviour on the development of such new business models. Embedded in the literature on business models, this paper explores how incumbent and entrepreneurial firms’ path dependencies have affected the evolution of business models for electric vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a five-year period (2006-2010), the paper identifies four business model archetypes and traces their evolution over time. Findings suggest that incumbent and entrepreneurial firms approach business model innovation in distinctive ways. Business model evolution shows a series of incremental changes that introduce service-based components, which were initially developed by entrepreneurial firms, to the product. Over time there seems to be some convergence in the business models of incumbents and entrepreneurs in the direction of delivering economy multi-purpose vehicles.
Full-text available
Article
The current literature on business models lies mainly in the literature on strategy and competitive advantage and focuses on their role as descriptors of actual phenomenon, often by reference to taxonomic categories. In this essay we explore how business models can be seen as a set of cognitive configurations that can be manipulable in the minds of managers (and academics). By proposing a typology of business models, that emphasises the connecting of traditional value chain descriptors with how customers are identified and satisfied, and how the firm monetizes its value, we explore how business model configurations can extend current work on cognitive categorization and open up new possibilities for organisation research.
Full-text available
Article
The term “business model” has been misinterpreted and misused over the years, resulting in it being inadequately understood and applied by both practitioners and scholars. It is frequently confused with other popular terms in the management literature such as strategy, business concept, revenue model, economic model or even business process modeling. Our findings suggest that while business model describes what an organization currently is, it needs to be complemented with a strategy and capabilities in order to face upcoming changes. Besides clarifying the meaning and use of the business model terminology, we theorize about its roots through a combination of the resource-based view and transaction cost economics. Finally, we identify new avenues for further research such as the investigation of path dependency in a business model and the meaning of business model innovation. “The definition of a business model is murky at best. Most often, it seems to refer to a loose conception of how a company does business and generates revenue... The business model approach to management becomes an invitation for faulty thinking and self-delusion” (Porter, 2001, p. 73).“While the term ‘business model’ has gained widespread use in the practice community, the academic literature on this topic is fragmented and confounded by inconsistent definitions and construct boundaries” (George & Bock, 2011, p. 83).
Article
This study draws on depth interviews with 49 managers in customer firms and 55 managers in supplier firms and on discussions with 21 managers in two focus groups to propose a new way of thinking about customer solutions. Extant literature and suppliers interviewed for this study view a solution as a customized and integrated combination of goods and services for meeting a customer's business needs. In contrast, customers view a solution as a set of customer–supplier relational processes comprising (1) customer requirements definition, (2) customization and integration of goods and/or services and (3) their deployment, and (4) postdeployment customer support, all of which are aimed at meeting customers' business needs. The relational process view can help suppliers deliver more effective solutions at profitable prices. In addition, field research suggests that the effectiveness of a solution depends not only on supplier variables but also on several customer variables. Supplier variables include contingent hierarchy, documentation emphasis, incentive externality, customer interactor stability, and process articulation. Customer variables include adaptiveness to supplier offerings and political and operational counseling that a customer provides to a supplier. Several of these variables underscore the importance of suppliers developing social capital with customers. The authors discuss implications for solution suppliers and identify areas for further research.
Article
Moving from free to “free and fee” for any product or service represents a challenge to managers, especially when consumers have plenty of free alternatives. For one online content provider, this article examines (1) the sources of long-term revenue loss (through attracting fewer free subscribers) and (2) how the firm's marketing actions affect its revenue gains (through attracting paid subscribers). The authors quantify revenue loss from several sources, including the direct effects of charging for part of the online content and the reduced effectiveness of search-engine referrals and e-mails. The analysis suggests several managerial implications. Managers should focus their price promotions on stimulating new monthly subscriptions, rather than the current promotional focus on stimulating new yearly contracts. In contrast, e-mail and search-engine referrals appear to be effective at generating yearly subscriptions. Meanwhile, free-to-fee conversion e-mail blasts are a double-edged sword; they increase subscription revenue at the expense of advertising revenue. Finally, further analysis shows that the move was preceded by the buildup of momentum in new free subscriptions, which appears to be beneficial for the move's success. The decomposition and comparison of the sources of revenue loss versus gains reveals several trade-offs facing companies moving from free to free and fee.
Article
Despite the demonstrated opportunities for revenue enhancement through digitalization, companies often experience a digitalization paradox. This paradox suggests that although companies may invest in digitalization, they often fail to achieve the expected revenue enhancement. In reporting research on 52 companies, we make the following four contributions: First, we focus on industrial companies in the business-to-business context, which largely have been neglected in previous research on digitalization. Second, we introduce the digitalization paradox as an important phenomenon in the discussion of revenue enhancement through digitalization. Third, we describe three growth paths: (1) commercializing digital solutions, (2) utilizing product connectivity, and (3) establishing an IoT-platform-based application business. For each growth path, the article takes a dynamic perspective on business models, highlighting triggers and modifications in business-model components (including value prop