Digitalization, business models, and SMEs

How do business model innovation practices improve performance of digitalizing SMEs?

Journal Article (2019)
Author(s)

Harry Bouwman (TU Delft - Information and Communication Technology)

Shahrokh Nikou (Åbo Akademi University)

Mark De Reuver (TU Delft - Information and Communication Technology)

Research Group
Information and Communication Technology
Copyright
© 2019 W.A.G.A. Bouwman, Shahrokh Nikou, Mark de Reuver
DOI related publication
https://doi.org/10.1016/j.telpol.2019.101828
More Info
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Publication Year
2019
Language
English
Copyright
© 2019 W.A.G.A. Bouwman, Shahrokh Nikou, Mark de Reuver
Research Group
Information and Communication Technology
Issue number
9
Volume number
43
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Abstract

Digital transformation is requiring companies to rethink and innovate their business models (BMs). However, small- and medium-sized enterprises (SMEs)have scarce time and resources for experimenting with their BMs and implementing new strategies. This paper examines whether SMEs that undergo digital transformation perform better if they allocate more resources for BM experimentation and engage more in strategy implementation. An empirical study was conducted on 321 European SMEs that actively use social media, big data, and information technology to innovate their BMs. Furthermore, structural equation modelling showed positive overall firm performance effects of more resource allocation to BM experimentation and more engagement in practices of strategy implementation. These effects were mediated by BM experimentation practices and company innovativeness. Moreover, fuzzy-set qualitative comparative analysis (fsQCA)revealed the presence of equifinality by identifying different configurations in which these antecedent conditions affect overall firm overall performance. The results of two methodological approaches showed that SMEs may take different routes to improve their performance when digital transformation is changing their BM. This paper is one of the first to analyse how SMEs can handle the impact of digitalization by spending more time and effort on innovating their BMs. Practical and policy implications are discussed.

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