Abstract
Incumbent firms typically face significant risk of losing the relevance of their physical core when facing industry disruption driven by digital technologies. Existing literature emphasizes a digital first approach, whereby firm offerings are fundamentally redeveloped from a digital point of view, from the point of conception. While this prescription can help accelerate innovation, it does not tell us how incumbents might safeguard the relevance of their traditional physical core resources when going digital first. This is important, since major discontinuities in strategic repositioning, while often celebrated in digital innovation and transformation literature, create significant risks to firm survival. To this end, we conduct a grounded analysis of a European automotive firm’s innovation journey over an eight-year period. We contribute to the digital innovation and transformation literature by developing a process model explaining how a digital first approach can be employed in a way that also safeguards the physical core.
