Digital servitization strategies for SME internationalization: the interplay between digital service maturity and ecosystem involvement

Abstract

PurposeThe purpose of this study is to understand how digital servitization enables the process of internationalization for industrial SMEs.Design/methodology/approachThe present study has adopted an exploratory multiple case study, conducting a total of 40 interviews in a two-phased approach to data collection. The first phase consisted of exploratory interviews with twenty-six industrial SMEs connected to the manufacturing industry in Sweden and Finland. Then, six SMEs were selected in the second phase to participate in additional in-depth interviews.FindingsFirst, this study identifies three gradual enabling phases concerned with the digital service maturity of SMEs consisting of digital awareness, digital service innovation and digital service mass customization. Second, the three interdependent phases of ecosystem knowledge synergy, ecosystem integration and ecosystem value co-creation were identified to improve ecosystem involvement. Finally, a process framework has been developed for SME internationalization consisting of a digital servitization innovation strategy, a digital servitization ecosystem strategy and a digital servitization scaling strategy.Originality/valueThe present research contributes to how digital servitization enables SME internationalization by demonstrating how the development of digital service offerings and ecosystem partnerships supports the internationalization process. This research extends the literature by proposing a process framework for the digital-servitization-enabled internationalization of SMEs. This process perspective provides a richer explanation of the complex interplay between servitization, digitalization and ecosystems choices, which supports the expansion into international markets.

Barriers and opportunities of digital servitization for SMEs: the effect of smart Product-Service System business models

“…In particular, digital technologies drive servitization since their use allows manufacturing companies to mitigate the challenges and risks associated with servitization while successfully reaping the benefits (Ardolino et al 2018 ; Shen et al 2021 ). SMEs pursue digital servitization by transforming their capabilities and offerings to create, deliver and capture service value (Kolagar et al 2021 ), and accordingly provide high quality outputs to customers (Dutta et al 2021 ). Indeed, quality is a major focus of SMEs’ digital servitization as it represents the objective measure of their promises to customers (Ji et al 2019 ).…”

“…Indeed, smart PSS are specific as they lead to a restructuring of the value chain and value creation mechanisms in firms (Zighan and Abualqumboz 2022 ). For SMEs particularly, the digital servitization strategy requires specific skills, as well as a particular adaptation of the structure and strategic vision of the SME (Kolagar et al 2021 ). For example, Blockchain can be a key building block in proposing new business models based on pay-per use fees (Balistri et al 2020 ).…”

Service Innovation and Performance in Micro, Small, and Medium-Sized Organizations

“…In order to remain competitive and achieve growth and profitability, organizations in the service sector must continuously innovate and adapt in response to changes in customer demands (Yang, 2007;Thakur & Hale, 2013). This is particularly true for micro, small, and medium-sized enterprises (MSMEs), those with fewer than 250 employees, who due to their size and resource constraints, face continuous pressure from larger rivals (McDermott and Prajogo, 2012;Sok et al, 2013;Kolagar et al, 2021). It is for this reason, that service innovation is understood as essential to the very survival of these organizations (Tsai & Wang, 2017;Witell et al, 2017).…”

Strategy for Developing Product Standards, Product Quality, and Innovation in Improving the Internationalization Performance of Msmes at Aida Furniture in Pasuruan

“…Product standards provide guidelines as a basis for making decisions starting from design, manufacture, and assembly to finished products. Product standardization is the determination of basic limits in the form of specifications for manufactured goods (Kolagar et al, 2022).…”