Transition to Digital Distribution Platforms and Business Model Evolution

Abstract

How do business models evolve when technology-based firms move from physical distribution channels to digital distribution platforms? This is an important question, since digitalization of distribution platforms provides new opportunities to expand the reach and customer base of technology-based firms. Based on an in-depth multi-case study of four Japanese high-tech firms, we seek to expand our understanding of digital transformation and business model literature. Our findings indicate that that through digital transformation, the case firms’ business models evolved toward more constant interaction with the market, in particular through digital platforms. This interaction includes growing and leveraging network partners, reducing both intermediate actors and supplier dependence, and improving the information flow to and from end users.