Page - 186 - in Digital Entrepreneurship - Impact on Business and Society

As mentioned in the previous sections, industrial organizations are changing their businessmodels and developing outcome-centric businessmodels, which are possible due to technological advancements. Since organizations are venturing into new markets and customers, they are transforming their operating models by integrating business systems and processes with internal systems and with ecosystem partners. Finally, organizations are transforming their cultures and developing digital cultures for entrepreneurship.However, external factors such as competitive turbulence, market turbulence, technology turbulence, and internal factors such as path dependency and digital commitment influence these factors. The following sections describe these three factors and influencers. 3.1 BusinessModel Transformation Corporate digital entrepreneurs are developing new products and services by transforming existing business models and introducing new ones. Value creation andvalue capture are two fundamental functionsof abusinessmodel.Teece (2010) suggests that thepurposeofabusinessmodel is todefinehowthecompanydelivers value to its customers, entices its customers to pay for those perceived values, and converts those payments to profit for the company. Teece further suggests that businessmodel innovationcanbeapath tocompetitiveadvantage if it is sufficiently differentiated from its competitors and cannot be replicated easily. Hui (2014) highlights the importance of digital businessmodel innovation for IoT businesses. Theauthor emphasizes that in the connectedworld, companiesneed to rethinkhow values are created and captured for their customers. Hui (2014), in theHarvard Business Review article entitled “How the Internet of Things Changes Business Models”, describes the value creation and capture model and identifies the capa- bilities needed to create and capture values for IoT business. Value creation is related to the offerings provided by companies to their customers so that they are encouraged touse the service and topay for those services.Earlier competitionwas based on features and, since new features add incremental value for customers, mostof thebusinessmodelswerebasedonprice.However, in theconnectedworld, productsarenever soldonceas thecompaniescollect theusageof theproductsona continuousbasis and tweak theproducts basedoncustomer requirements. This is a continuous improvement process and one that embraces services aligned to prod- ucts.Aswithvalue creation,Hui suggests that thevaluecapturemodel is changing. Companies are not relyingon theone-timevalueof their products and services, but on recurringvaluescaptured fromtheir customers.This isbecomingpossibledue to real-time connectivitywith customers. Table 1 (adapted fromHui 2014) describes the model and how emerging technologies are helping to transform the business models. A business model developed by one company in one market segment can be implemented inanothercompany inadifferent segment (Teece2009).Forexample, a subscription-based software services model pioneered by Salesforce.com’s plat- form is being adopted by GE Digital in its Predix, Industrial Internet platform. Corporate Digital Entrepreneurship: Leveraging Industrial… 191