Sustained value creation driven by digital connectivity: A multiple case study in the mechanical components industry

Abstract

This paper investigates how digital connectivity drives new forms of sustained value creation in traditional industries, where many firms still compete and strategize within a traditional industry structure and supply chain logic. We perform a multiple case study with four companies active in the vehicle component industry and implementing digital connectivity in a business-to-business (B2B) setting. Results show that digital connectivity enables greater transparency, trust, and collaboration with customers and creates new forms of value creation through companies’ strategizing actions – aimed at developing highly customized solutions – and critical capabilities – needed to configure a customer-centric value chain, integrate buyer-supplier digital resources, and improve the coherence between data-driven decision-making, lean management, and employees’ skills. We shed light on how manufacturers leveraged digital connectivity to successfully assimilate and scale up their digital-related capabilities across different dimensions, transforming their business models in a sustained way. This should also complement a change in the governance of customer transactions, fostering transparency and trust. Fine-tuning and expanding well-established B2B relationships through digital connectivity become a priority for traditional businesses to change to new and efficiently sustained value co-creation forms that can be complemented to a successful business model innovation or co-creation strictly linked to larger network connections.