The Role of Distinctive Organisational Capability in Formulating Co-creation Strategy and Business Model Innovation

Industry 4.0 is the conceptual era where Internet and digital technology becomes an enabler for innovation and transformation. Digital transformations are required by Telecommunication firms to transform their portfolio beyond the pipeline to close the gap in business model innovations, redefine customer engagement and co-creation, and set up new distinctive organization capabilities. This paper has the objective to develop a digital transformation model by assessing the mediating role of co-creation strategy on the relationship between distinctive organizational capability and business model innovation. The units of analysis are Indonesian telecommunication firms, using a sample of 35 out of 445 telecommunication firms. The analytical approach used for analysis is Smart Partial Least Square (PLS). The study results reveal that distinctive organizational capability has an indirect effect on business model innovation, but direct effect to co-creation strategy. © 2018, Czestochowa University of Technology. All rights reserved.