Abstract
Incumbents have a challenge to sustain their business due to new attractive business model offered by new entrants. Incumbent firms are required to transform their existing business to a new paradigm of business which is digital business through developing new capability in business model. In developing innovation in the business model, there is a challenge for incumbents due to existing legacy business and routine process. The fastest way in developing new capabilities through collaboration is called co-creation strategy. In driving co-creation strong culture and visioning of digital leader is required. The study of the digital leadership role in developing business model innovation and co-creation strategy was limited; hence this study has an objective to assess the role of digital leadership, whether it will direct or indirect through co-creation strategy in developing business model innovation. The study was conducted on 88 senior leader respondents. The statistical data analysis used SmartPLS application. The result explained that digital leadership impacts indirectly through co-creation strategy on developing business model innovation. Co-creation strategy plays a mediating role in the relationship between business model innovation and digital leadership.
Highlights
The impact of digital technology through the Internet and cloud brings the new paradigm in terms of structure in all industries
The previous study found that there is an impact of digital leadership on innovation including developing a business model; we develop the hypothesis as follows: Hypothesis 1: Digital leadership has a direct impact to business model innovation in the Indonesian telecommunication industry
The results are aligned with the study on disruption technology and innovation conducted by Christensen [9, 48] where the incumbent firm should adapt the changing of market through creating innovation business model by driving digital transformation
Summary
The impact of digital technology through the Internet and cloud brings the new paradigm in terms of structure in all industries. The Internet creates a borderless economy and new whole mind and results in the information era changes into the conceptual age era [1]. Digital technology creates a certain paradox between. Strategy and Behaviors in the Digital Economy the opportunity and efficiency. It will generate revenue through innovation in business model and in terms of efficiency will be created through digitization process [3]. There are four factors in the driving of change that are key success factors of the firms which are innovation, collaboration, integration, and interoperability [4, 5]
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