Growth paths for overcoming the digitalization paradox

Heiko Gebauer, Elgar Fleisch, Claudio Lamprecht and Felix Wortmann

Business Horizons, 2020, vol. 63, issue 3, 313-323

Abstract: Despite the demonstrated opportunities for revenue enhancement through digitalization, companies often experience a digitalization paradox. This paradox suggests that although companies may invest in digitalization, they often fail to achieve the expected revenue enhancement. In reporting research on 52 companies, we make the following four contributions: First, we focus on industrial companies in the business-to-business context, which largely have been neglected in previous research on digitalization. Second, we introduce the digitalization paradox as an important phenomenon in the discussion of revenue enhancement through digitalization. Third, we describe three growth paths: (1) commercializing digital solutions, (2) utilizing product connectivity, and (3) establishing an IoT-platform-based application business. For each growth path, the article takes a dynamic perspective on business models, highlighting triggers and modifications in business-model components (including value proposition, value-creation activities, and profit equation). Fourth, while the described modifications require initial investments to let these growth paths develop, we highlight how growth traps can prevent investments in business-model modifications from leading to revenue enhancement and how they can ultimately lead to the digitalization paradox.

Keywords: Digitalization; Digitalization paradox; Growth traps; Growth strategy; Business-model modifications; Innovation capability; Strategic partnerships (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:63:y:2020:i:3:p:313-323

DOI: 10.1016/j.bushor.2020.01.005

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