Influence of Digitalization on business model innovation in the Internationalization Process of SMEs

Abstract

In the changing business environment characterized by the emergence of modern digital technologies, SMEs are in a great need of innovating their business models in order to remain competitive in this digital era. Moreover, being a competitive global player can be a challenging task for SMEs who are often constrained with limited resources in running their businesses efficiently. However, digitalization has emerged to be one of the solutions that can help SMEs in innovating their business models and eventually contributing to scaling of their businesses in cross border markets. Therefore, the purpose of this study is to expand the existing knowledge on how digitalization influences business model innovation in the internationalization process of SMEs. In order to reach the purpose of this study a multiple case study on three Swedish SMEs was performed. Our research findings align with most of the findings in earlier studies and show that the influence of digitalization on business model innovation in the internationalization process of SMEs falls under the dimensions of value creation, value delivery and value capture, market knowledge, resource commitment and the speed of internationalization. Therefore, in order to overcome the challenge of limited resources, SMEs can make use of the modern digital technologies in innovating their business models in a way that will facilitate the scaling of their business abroad. However, business model innovations that are enabled by digital technologies entails extra cost in acquiring and implementing them which might pose challenges for SMEs as technology keeps on changing and advancing day by day.