Gyan Management

Impact of Digital Transformation on the Traditional Business Model

Swati Bhatia¹, Hemant Yadav¹ and Mohd. Shawez Tariq¹

First Published 23 May 2025. https://doi.org/10.1177/09747621251329646

Article Information

Volume 19, Issue 1 January 2025

Corresponding Author:

Swati Bhatia, Asian Business School, Noida, Uttar Pradesh 201303, India.
Email: swati.bhatia@abs.edu.in

¹Asian Business School, Noida, Uttar Pradesh, India

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

Digital technologies are transforming and disrupting traditional business models; furthermore, they have a profound impact on traditional business models. By using digital tools in every part of their business, companies can perform more accurately, economic efficiency or reduce costs, and provide customers better value or satisfaction.

As the industry opens up new business opportunities, companies must adapt to new realities. This study analyse how digital transformation will impact future business performance and customer satisfaction. Digital technology has opened up new ways for businesses to interact with customers through social media, email, and paid advertising. Whereas before, businesses simply delivered goods to customers in need and made a few bucks, they are now leveraging these digital channels to create and meet customer needs.

This scenario in which we exist is all about digital mode, and the pandemic has made it more reasonable to adapt frequently. Digital transformation is a must-have for traditional companies looking to compete in today’s digital economy. Digital transformation helps companies to increase productivity, reduce expenses, boost revenue and enhance customer experience.

A traditional business structure has a physical presence and serves customers locally through concrete establishments that provide services or products. In the case of a digital business setup, anyone from all over the world can use the internet to access the company’s services and products.

Finally, in this study, we address that digital transformation is a complex journey, and businesses need to carefully plan and implement their digital transformation initiatives to maximize their success and how it impacted and paved the way for change from traditional businesses to digital business models.

Keywords

Digitalization, transformation, business, traditional model

References

Deloitte. (2017). Disruptions in retail through digital transformation. https://www2.deloitte.com/content/dam/Deloitte/in/Documents/CIP/in-cip-disruptions-in-retail-noexp.pdf

Egfjord, K. F. H., & Sund, K. J. (2020). Do you see what I see? How differing perceptions of the environment can hinder radical business model innovation. Technological Forecasting and Social Change, 150, 119787.

Fletcher, G., & Griffiths, M. (2020). Digital transformation during a lockdown. International Journal of Information Management, 55(5), 102185.

Hasenpusch, T. C., & Baumann, S. (2017). Strategic media venturing: Corporate venture capital approaches of TIME incumbents. International Journal of Media Management, 19(1), 77–100.

Leih, S., Linden, G., & Teece, D. J. (2020). Business model innovation and organizational design: A dynamic capabilities perspective. In N. J. Foss & T. Saebi (Eds.), Business model innovation: The organizational dimension (1st ed.). Oxford University Press.

Li, F. (2020). Leading digital transformation: Three emerging approaches for managing the transition. International Journal of Operations & Production Management, 40(6), 809–817.

Marr, B. (2023, November 3). The impact of digital transformation on business models: Opportunities and challenges. LinkedIn. https://www.linkedin.com/pulse/impact-digital-transformation-business-models-challenges-bernard-marr-kl4re/

Mimani, A. (2022, August 28). Digitisation of small and medium-sized businesses in India. The Times of India. https://timesofindia.indiatimes.com/blogs/voices/digitisation-of-small-and-medium-sized-businesses-in-india/

Rajput, A., Prasad, G., & Tailor, R. K. (2022). An impact of digital accounting on small and medium enterprises in India. Journal of Management Research & Analysis, 9(3), 177–181.

Snihur, Y., & Wiklund, J. (2019). Searching for innovation: Product, process, and business model innovations and search behavior in established firms. Long Range Planning, 52(3), 305–325.

Sohl, T., Vroom, G., & Fitza, M. A. (2020). How much does business model matter for firm performance? A variance decomposition analysis. Academy of Management Discoveries, 6(1), 1–27.

Svahn, F., Mathiassen, L., & Lindgren, R. (2017). Embracing digital innovation in incumbent firms: How Volvo Cars managed competing concerns. MIS Quarterly, 41(1), 239–253.

Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28, 1319–1350.

Vial, G. (2019). Understanding digital transformation: A review and a research agenda. The Journal of Strategic Information Systems, 28. https://doi.org/10.1016/j.jsis.2019.01.003

Williams, T. A., Gruber, D. A., Sutcliffe, K. M., Shepherd, D. A., & Zhao, E. Y. (2017). Organizational response to adversity: Fusing crisis management and resilience research streams. Academy of Management Annals, 11(2), 733–769.