Business model innovation and digital technology: The perspective of incumbent Italian small and medium-sized firms


Abstract

Objective: The aim of the article was to conduct an explorative study on the relationship between business model innovation and digital technologies in incumbent small and medium-sized enterprises (SMEs).

Research Design & Methods: A qualitative methodology supported the study by providing a novel perspective of analysis. Ten cases were selected from a sample of seventy SMEs engaged in a university-industry collaboration programme.

Findings: The study aimed to explore the implications of the business model innovation process in incumbent SMEs when they adopt digital technologies. This perspective helped to understand how digital technologies act as enabling factors that support SMEs in innovating their business models.

Implications & Recommendations: This study developed a conceptual framework to depict business model innovation when SMEs adopt digital technologies. Digital technology emerged as a necessary but not sufficient condition to achieve business model innovation.

Contribution & Value Added: The study shed light on the relationship between business model innovation and digital technologies in incumbent SMEs and unfolded its major underlying factors.


Keywords

business model; digital technology; SMEs; entrepreneurship; business model innovation

Anwar M. & Shah S.A. (2018). Managerial Networking and Business Model Innovation: Empirical Study of New Ventures in an Emerging Economy. Journal of Small Business and Entrepreneurship, 32(3), 265-286. https://doi.org//10.1080/08276331.2018.1490509

Anwar, M. (2018). Business model innovation and SMEs performance—Does competitive advantage medi-ate?. International Journal of Innovation Management, 22(07), 1850057. https://doi.org/10.1142/S1363919618500573

Baden-Fuller, C., & Haefliger, S. (2013). Business models and technological innovation. Long Range Planning, 46(6), 419-426. https://doi.org//10.1016/j.lrp.2013.08.023

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org//10.1016/S0742-3322(00)17018-4

Bivona, E. & Cruz, M. (2021). Can business model innovation help SMEs in the food and beverage industry to respond to crises? Findings from a Swiss brewery during COVID-19. British Food Journal, ahead-of-print(ahead-of-print). https://doi.org/10.1108/BFJ-07-2020-0643

Bollweg L., Lackes R., Siepermann M., & Weber P. (2019). Drivers and barriers of the digitalisation of local owner operated retail outlets. Journal of Small Business and Entrepreneurship, 32(2), 173-201. https://doi.org//10.1080/08276331.2019.1616256

Bowman, H., Nikou, S., & de Reuver, M. (2019). Digitalization, business models, and SMEs: How do business model innovation practices improve performanceof digitalising SMEs?. Telecommunications Policy, 101828. https://doi.org//10.1016/j.telpol.2019.101828

Breier, M., Kallmuenzer, A., Clauss, T., Gast, J., Kraus, S., & Tiberius, V. (2021). The role of business model innovation in the hospitality industry during the COVID-19 crisis. International Journal of Hospitality Management, 92, 102723.https://doi.org/10.1016/j.ijhm.2020.102723

Casadesus-Masanell, R., & Ricart, J.E. (2011). How to design a winning business model. Harvard business review, 89(1/2), 100-107.

Chesbrough, H. (2010). Business model innovation: opportunities and barriers. Long Range Planning, 43(2-3), 354-363. https://doi.org//10.1016/j.lrp.2009.07.010

Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innova-tion: evidence from Xerox Corporation’s technology spin‐off companies. Industrial and corporate change, 11(3), 529-555.https://doi.org/10.1093/icc/11.3.529

Christensen, C.M., Bartman, T., & Van Bever, D. (2016). The hard truth about business model innovation. MIT Sloan Management Review, 58(1), 31.

Ciulli, F., & Kolk, A. (2019). Incumbents and business model innovation for the sharing economy: Implica-tions for sustainability. Journal of Cleaner Production, 214, 995-1010. https://doi.org//10.1016/j.jclepro.2018.12.295

Cliffe, S., & McGrath, R.G. (2011). When your business model is in trouble. Harvard Business Review, 89(1/2), 96-98.

Corbin, J., & Strauss, A. (2014). Basics of qualitative research: Techniques and procedures for developing grounded theory. Thousand Oaks: Sage publications.

Cucculelli, M., & Bettinelli, C. (2015). Business models, intangibles, and firm performance: evidence on cor-porate entrepreneurship from Italian manufacturing SMEs. Small Business Economics, 45, 329-350. https://doi.org//10.1007/s11187-015-9631-7

Cucculelli, M., & Peruzzi, V. (2020). Post-crisis firm survival, business model changes, and learning: evidence from the Italian manufacturing industry. Small Business Economics, 54, 459-474. https://doi.org//10.1007/s11187-018-0044-2

Dubois, A., & Gadde, L.E. (2002). Systematic combining: an abductive approach to case research. Journal of business research, 55(7), 553-560. https://doi.org//10.1016/S0148-2963(00)00195-8

Eisenhardt, K.M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532-550. https://doi.org//10.4135/9781473915480.n52

Eisenhardt, K.M., & Graebner, M.E. (2007). Theory building from cases: Opportunities and challenges. Acad-emy of Management Journal, 50(1), 25-32. https://doi.org//10.5465/amj.2007.24160888

European Commission, (2020). Indice di digitalizzazione dell’economia e della società 2020 Italia. Retrived from: URL https://digital-strategy.ec.europa.eu/en/policies/desi on December, 2021

Foss, N.J., & Saebi, T. (2018). Business models and business model innovation: Between wicked and para-digmatic problems. Long Range Planning, 51(1), 9-21. https://doi.org//10.1016/j.lrp.2017.07.006

Foss, N.J., & Saebi, T. (Eds.). (2015). Business model innovation: The organisational dimension. Oxford: OUP Oxford.

Frankenberger, K., Weiblen, T., Csik, M., & Gassmann, O. (2013). The 4I-framework of business model inno-vation: A structured view on process phases and challenges. International Journal of Product Develop-ment, 18(3/4), 249-273. https://doi.org//10.1504/IJPD.2013.055012

Gassmann, O., Frankenberger, K., & Csik, M. (2014). The business model navigator: 55 models that will revolu-tionise your business. London: Pearson UK.

Habtay, S.R., & Holmén, M. (2014). Incumbents’responses to disruptive business model innovation: The moderating role of technology vs market-driven innovation. International Journal of Entrepreneurship and Innovation Management, 18(4), 289-309. https://doi.org//10.1504/IJEIM.2014.064211

Ibarra, D., Ganzarain, J., & Igartua, J.I. (2018). Business model innovation through Industry 4.0: A review. Procedia Manufacturing, 22, 4-10. https://doi.org//10.1016/j.promfg.2018.03.002

Kagermann, H., Lukas, W. D., & Wahlster, W. (2011). Industrie 4.0: Mit dem Internet der Dinge auf dem Weg zur 4. industriellen Revolution. VDI nachrichten, 13(1), 2-3.

Khanagha, S., Volberda, H. & Oshri, I. (2014). Business model renewal and ambidexterity: structural altera-tion and strategy formation process during transition to a cloud business model. RandD Management, 44(January 2013), 322-340. https://doi.org//10.1111/radm.12070

Kiel, D., Arnold, C., & Voigt, K.I. (2017). The influence of the Industrial Internet of Things on business models of established manufacturing companies-A business level perspective. Technovation, 68, 4-19. https://doi.org//10.1016/j.technovation.2017.09.003

Kim, S. K., & Min, S. (2015). Business model innovation performance: when does adding a new business model benefit an incumbent? Strategic Entrepreneurship Journal, 9(1), 34-57.https://doi.org/10.1002/sej.1193

Liu, P., & Bell, R. (2019). Exploration of the initiation and process of business model innovation of successful Chinese ICT enterprises. Journal of Entrepreneurship in Emerging Economies, 11(4), 515-536. https://doi.org//10.1108/JEEE-09-2018-0094

Markides, C., & Charitou, C.D. (2004). Competing with dual business models: A contingency approach. Acad-emy of Management Perspectives, 18(3), 22-36. https://doi.org//10.5465/ame.2004.14776164

Mintzberg, H., & Waters, J. A. (1985). Of strategies, deliberate and emergent. Strategic management Journal, 6(3), 257-272. https://doi.org//10.1007/978-1-349-20317-8_1

Moeuf, A., Pellerin, R., Lamouri, S., Tamayo-Giraldo, S., & Barbaray, R. (2018). The industrial management of SMEs in the era of Industry 4.0. International Journal of Production Research, 56(3), 1118-1136. https://doi.org//10.1080/00207543.2017.1372647

Müller, J. M., Buliga, O., & Voigt, K.I. (2018). Fortune favors the prepared: How SMEs approach business model innovation in Industry 4.0. Technological Forecasting and Social Change, 132, 2-17. https://doi.org//10.1016/j.techfore.2017.12.019

Nagy, J., Oláh, J., Erdei, E., Máté, D., & Popp, J. (2018). The role and impact of industry 4.0 and the internet of things on the business strategy of the value chain—The case of Hungary. Sustainability, 10(10), 3491. https://doi.org//10.3390/su10103491

Nambisan, S. (2017). Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. Entrepreneurship Theory and Practice, 41(6), 1029-1055. https://doi.org//10.1111/etap.12254

Ng, H.Y. (2017). Categorisation of business model patterns and mapping of their relations with business model building blocks. In 2017 IEEE International Conference on Industrial Engineering and Engineering Man-agement (IEEM) (pp. 1767-1771). IEEE. https://doi.org//10.1109/IEEM.2017.8290195

Nonaka, I. (1994). A dynamic theory of organisational knowledge creation. Organisation Science, 5(1), 14-37.https://doi.org/10.1287/orsc.5.1.14

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. Hoboken: John Wiley and Sons.

Osterwalder, A., Pigneur, Y., & Tucci, C.L. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the Association for Information Systems, 16(1), 1. https://doi.org//10.17705/1CAIS.01601

Rachinger, M., Rauter, R., Müller, C., Vorraber, W., & Schirgi, E. (2019). Digitalisation and its influence on business model innovation. Journal of Manufacturing Technology Management, 30(8), 1143-1160. https://doi.org//10.1108/JMTM-01-2018-0020

Taran, Y., Boer, H., & Lindgren, P. (2015). A business model innovation typology. Decision Sciences, 46(2), 301-331. https://doi.org//10.1111/deci.12128

Teece, D.J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003

Thierry, T., Mihai, Ț., & Timber, H. (2020). Effects of Covid-19 on business models in Romania and the Neth-erlands, a digitalization perspective. Studies in Business and Economics, 15(3), 115-131. https://doi.org/10.2478/sbe-2020-0049

Von den Eichen, S.F., Freiling, J., & Matzler, K. (2015). Why business model innovation fails. Journal of Busi-ness Strategy, 36(6), 29-38. https://doi.org//10.1108/JBS-09-2014-0107

Voss, C., Tsikriktsis, N., & Frohlich, M. (2002). Case research in operations management. International Journal of Operations and Production Management, 22( 2), 195-219. https://doi.org/10.1108/01443570210414329

Yeger, D. & Shenhar, A. (2019). A Unified Framework for Business Model Transformation of Established Firms. Journal of Business Models, 7(4), 73-78. https://doi.org/10.5278/ojs.jbm.v7i4.3134

Yin, R.K. (2014). Case study research and applications: Design and methods. Thousand Oaks: Sage publica-tions.


Published : 2022-09-30


SabatiniA., CucculelliM., & GregoriG. L. (2022). Business model innovation and digital technology: The perspective of incumbent Italian small and medium-sized firms. Entrepreneurial Business and Economics Review, 10(3), 23-35. https://doi.org/10.15678/EBER.2022.100302

Andrea Sabatini 
Università Politecnica delle Marche  Italy
http://orcid.org/0000-0003-0035-9454

Professor of Applied Economics at Università Politecnica delle Marche and director of the PhD in Economics. He is the Secretary General of the Italian Economic Association and Fulbright Distinguished Chair at the University of Pittsburgh (USA). His research interests include entrepreneurship, innovation, and corporate finance. He is an Associate Editor of the JSBM, JSBE and the Italian Economic Journal (ItEJ).


Marco Cucculelli  m.cucculelli@univpm.it
Università Politecnica delle Marche - Ancona  Italy
http://orcid.org/0000-0003-0035-9454

PhD in Economics from the University of Rome – Tor Vergata, Italy. He is Professor at the Department of Economics and Social Sciences, Università Politecnica delle Marche. he has been a Visiting Professor at the Kelley School of Business, Indiana University (USA), the School of Economics and Finance, St. Andrews University (Scotland), the Cracow University of Economics - Dept of European Studies (Poland) and the George Washington University - Dept of Management (Washington DC, USA). In 2016, Marco was the Fulbright Distinguished Chair at the University of Pittsburgh. He is an Associate Editor of the Journal of Small Business Management, co-editor of the EM-Journal of Applied Economics and sits on the editorial board of L'Industria. he is the Director of the Giorgio Fuà Foundation, a member of the Money and Finance Research Group (MoFiR), and Research Director of the ISTAO Business School. in 2011 he has been elected as Director at-large to the Board of the International Council for Small Business and Entrepreneurship – ICSB, Washington, D.C. (USA).


Gian Luca Gregori 
Università Politecnica delle Marche  Italy
http://orcid.org/0000-0001-9220-7970

Rector of Università Politecnica delle Marche, Professor of Marketing and Management. His research interests include marketing and business management, entrepreneurship, and small business development. He has published in Technovation, Industrial Marketing Management, and Journal of Business and Industrial Marketing.






Creative Commons License

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a CC BY-ND licence that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
  2. Authors are asked to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.

 Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) only the final version of the article, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). We advise using any of the following research society portals: