Digitalization Drives Business Model Innovation by Reshaping Value Propositions and Network Positions
Digitalization significantly influences business model innovation by creating new opportunities for value creation, proposition, and capture, but the extent to which these opportunities are realized depends on a company's existing value proposition and its position within the value network.
Journal of Manufacturing Technology Management · 2018
Key Findings
- 01Digitalization is perceived as important for business model innovation.
- 02The perceived options for business model innovation through digitalization are determined by the value proposition and the company's position in the value network.
- 03Organizational capacities and employee competences are identified as future challenges for industries adapting to digitalization.
Application
Design takeaway
When exploring business model innovation driven by digitalization, prioritize understanding how your existing value proposition and network position enable or constrain new digital opportunities, and proactively address internal skill gaps.
How to apply
When developing a new digital product or service, consider how it might alter your company's value proposition and its relationships within the broader industry value chain. Assess the internal readiness for digital transformation.
Project actions
- 01When researching a new product, consider how digital technologies could enable a new business model, not just a new feature.
- 02Analyze how your proposed product fits into the existing value chain and how it might change customer relationships.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Provides empirical insights into a growing area of research.
- +Focuses on practical aspects of business model innovation in response to digitalization.
Limitations
The findings are based on a small sample from specific industries, so they might not apply to all businesses or sectors. The qualitative nature means interpretations can vary.
Reliability & validity
The qualitative approach with a small sample size may limit the generalizability and statistical reliability. Validity is enhanced by focusing on in-depth insights from industry experts.
Think critically
To what extent do the identified challenges in organizational capacities and employee competences represent a barrier to innovation, and how can design interventions mitigate these barriers?
Design Principles
"Digitalization opportunities for business model innovation are contingent upon a firm's existing value proposition and its strategic positioning within the industry's value network."
Understanding how digitalization impacts business models is crucial for strategic planning and competitive advantage. Designers and strategists must consider how digital technologies can be leveraged not just for new products or services, but to fundamentally alter how value is delivered and captured within an industry.
What This Means for Your Design
Digital tools can help businesses change how they make and sell things, but how much they can change depends on what they already offer and their place in the market. Companies also need to make sure their staff have the right skills for these changes.
How to use in your project
- 1.Use this research to justify exploring business model innovation as part of your design project, especially if digitalization is a factor.
- 2.Reference the findings to explain why understanding value propositions and network positions is critical for successful business model adaptation.
Add to My Project
Quick Cite
(2018). Digitalization and its influence on business model innovation. Journal of Manufacturing Technology Management. https://doi.org/10.1108/jmtm-01-2018-0020 Retrieved from https://designdex.org/study/fe43dc0d-dc8c-4ef5-afcc-0e8012aeda07/digitalization-drives-business-model-innovation-by-reshaping-value-propositions-and-network-positions
Paragraph starter
This research highlights that digitalization's impact on business model innovation is significant, influencing value creation, proposition, and capture. However, the successful exploitation of these digital opportunities is heavily dependent on a company's existing value proposition and its position within the broader value network. Furthermore, the study identifies organizational capacities and employee competencies as critical factors for navigating these changes, suggesting that any design project aiming for business model innovation must consider these internal elements alongside external market dynamics.
Source
Journal of Manufacturing Technology Management
Digitalization and its influence on business model innovation
journal · 2018
View sourceQuestions about this research
- What does the research say about digitalization drives business model innovation by reshaping value propositions and network positions?
- When exploring business model innovation driven by digitalization, prioritize understanding how your existing value proposition and network position enable or constrain new digital opportunities, and proactively address internal skill gaps. Evidence: Journal of Manufacturing Technology Management (2018).
- Why does "Digitalization Drives Business Model Innovation by Reshaping Value Propositions and Network Positions" matter for design?
- Understanding how digitalization impacts business models is crucial for strategic planning and competitive advantage. Designers and strategists must consider how digital technologies can be leveraged not just for new products or services, but to fundamentally alter how value is delivered and captured within an industry.
- How can designers apply this research?
- When exploring business model innovation driven by digitalization, prioritize understanding how your existing value proposition and network position enable or constrain new digital opportunities, and proactively address internal skill gaps.
- What were the main findings?
- Digitalization is perceived as important for business model innovation.. The perceived options for business model innovation through digitalization are determined by the value proposition and the company's position in the value network.. Organizational capacities and employee competences are identified as future challenges for industries adapting to digitalization.
- What research method was used?
- Qualitative empirical research with 12 key informants.
- How strong is the evidence?
- Evidence strength is rated Moderate effect, based on a 2018 journal from Journal of Manufacturing Technology Management.
- What should I do differently in my next project?
- When developing a new digital product or service, consider how it might alter your company's value proposition and its relationships within the broader industry value chain. Assess the internal readiness for digital transformation.
- What are the limitations?
- The study is limited to two specific industries (media and automotive) and relies on qualitative data from a small number of key informants, which may limit the generalizability of findings to other sectors or a broader population.
- Is there evidence that business model affects design outcomes?
- While companies recognize digitalization's importance for business model innovation, their ability to capitalize on it is shaped by what they offer (value proposition) and where they sit in the industry's supply chain (value network position). Future success also hinges on developing the right internal skills and struc Source: Journal of Manufacturing Technology Management (2018).
- Where does this model innovation research apply?
- Media and automotive industries It sits within innovation & design research on designdex.org.
Related research topics
business model design research · evidence on business model · does business model improve design outcomes · model innovation studies for designers · business model and model innovation findings · innovation & design research evidence