FROM TRADITION TO TRANSFORMATION: THE ROLE OF DIGITALIZATION IN ADVANCING BUSINESS MODEL INNOVATION

Abstract

This study examines the impact of digitalization on business model innovation within the automotive industry, comparing traditional manufacturer BMW with electric vehicle pioneer Tesla. The research explores how digital technologies catalyze transformation in legacy companies and enable innovation in new entrants. Utilizing a comparative case study methodology, this paper analyzes the strategies employed by both companies to integrate digitalization into their business models. For BMW, the focus is on digital transformation initiatives and their integration with traditional automotive manufacturing. Conversely, Tesla is evaluated on its digital-native approach that disrupts the conventional market landscape. This study employs a mixed-methods approach, collecting both qualitative data from interviews with industry experts and quantitative data from market performance metrics. Findings suggest that digitalization offers diverse pathways to innovation, with BMW capitalizing on efficiency gains and incremental innovation, while Tesla leverages its digital core for radical innovation and market differentiation. The study contributes to the discourse on digital transformation by highlighting the need for a nuanced understanding of how digitalization can be harnessed for business model innovation. This is crucial for traditional companies aiming to remain competitive and for newcomers seeking to disrupt the industry. The implications of this research extend beyond the automotive sector, offering insights into the digitalization processes applicable to a wide range of industries facing similar transformative challenges

Keywords

• : digitalization
• business model innovation
• automotiveiindustry
• organizational transformation