Digitization as a catalyst for business model innovation a three-step approach to facilitating economic success

Abstract

Purpose – Incorporating digitization and innovative digital approaches can make or break an organization. Companies need suitable instruments to identify and exploit digital value drivers. Decision makers need management tools that enable them to translate digital value drivers into sustainable economic success. This paper introduces an integrated framework for analysing the strategic potential of digitization in business model development.

Design/methodology/approach – The framework integrates Osterwalder and Pigneur’s Business Model Canvas, Parmar et al.’s five patterns for IT-facilitated value creation, and Kim and Mauborgne’s Blue Ocean Strategy. By applying the framework to three cases, digital innovation drivers and their strategic relevance are highlighted.

Findings – The findings suggest that the three-step approach has the potential to guide decisionmaking. The research revealed the categories “enabling”, “complementary”, and “functional”, indicating the scope for strategic action.

Research limitations/implications – The limitations lie in the empirical relevance, as the framework is limited to three cases. The revealed categories might encourage future research activities that develop corresponding generic strategies.

Practical implications – The paper offers strong practical recommendations for organizations confronted with digitization challenges. The framework offers a strategic perspective for practitioners by offering an instrument to systematically encourage innovation.

Social implications – Digitization is an important economic factor for job creation, GDP growth, and productivity and has a strong impact on society.

Originality/value – Business model research is of undiminished interest for academics and practitioners. This paper aims to provide a model that can be applied in industry and contribute to model building. The integration of three existing models is a new approach.