Digital Servitization and Business Model Innovation in SMEs: A Model to Escape From Market Disruption

Abstract

The progress and the adoption of digital technologies can rapidly make products, processes, and business models obsolete, until disrupting entire markets. In this context, small-medium enterprises (SMEs) operating in manufacturing are especially challenged due to their limited resources and smallness liabilities. Firms can implement, design, and deliver new smart and connected products that change the way they compete and trigger the provision of services - until redesigning the entire business model. However, little knowledge is available on how SMEs may effectively trigger and catalyze such transition. Using an interpretative research approach inspired by the design research methodology, in this article, we explore how SMEs may leverage digital servitization to escape from a disrupted market. Based on our findings, an original digital servitization model tailored for SMEs is proposed. Finally, the study provides a set of research and managerial implications on how SMEs can overcome market disruption in the manufacturing context through digital servitization and business model innovation.