Business model innovation and ambidexterity in Industry 4.0

Abstract

Framing of the research.The Fourth Industrial Revolution (I4.0) is dramatically affecting firms' strategies, disrupting their business models.In particular, a bunch of digital technologies like IoT (Internet of Things), cloud platforms, big data, artificial intelligence and data analysis are offering firms the possibility to manage products functions, remotely and globally, kick-starting the design of innovative business models.Purpose of the paper.Using studies that have analyzed the link between business model innovation and ambidexterity as theoretical background, the aim of the paper is to investigate how incumbent BtoB manufacturing firms develop an I4.0 disrupting business model by addressing the related duality between exploration and exploitation (ambidexterity).Methodology.The paper fulfils its purposes by the means of a qualitative investigation, discussing empirical evidence coming from a cross-case analysis of 25 Italian SMEs and medium-large enterprises, selected crossing secondary data and indications coming from a specific panel of ten industry experts.Results.The impact of I4.0 technologies on firms' business models depend heavily on the access to user-firms' data.21 firms are involved in non-disruptive modifications of the business model; 4 firms are conducting more sophisticated experimentations in result-oriented product-service systems.These firms, that we have named "challengers", are in a privileged position in order to unleash the potential of I4.0, introducing advanced services directly related to the customers' needs.All these challengers adopt a particular form of contextual ambidexterity in which the exploration activities involve specifically selected (key) customers.Practical implications.Managers need to understand which are the pace and extent of change for the various components of the corporate business model to innovate during each specific step of transition towards I4.0 technologies. Research limitations.The main limitation of the study is because the investigated companies were going through a transition phase: therefore, we can't tell what the outcome of this evolutionary journey will be, and if it will be the same for every firm.Originality of the paper.The paper proposes an original framing that contributes theoretically to the literature interfacing business model innovation and ambidexterity management.In particular, the study enhances our knowledge about contextual ambidexterity, a concept as rich in charm as poorly explored in practice.

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