Abstract
The present article contributes to the theory of Business Model Innovation by incumbent firms via digital servitization. Our research explores the conditions affecting manufacturers' ability to innovate their business models by developing and supplying advanced, digitally-based services. The authors performed a Qualitative Comparative Analysis via a qualitative investigation of the novel business models adopted by 19 Italian small- and medium-sized incumbent manufacturers. Our study found a series of theoretically relevant causal factors for the targeted outcome variable: size and investments, customer intimacy, and external service suppliers are crucial paths for developing successful digitally-based advanced services. The findings suggest three managerial implications: first, managers must capitalise on corporate knowledge and assets, mapping and leveraging useful people and technologies. Second, they should seek external service providers related to technology and strategy/organisation to help them update the value proposition. Third, they must build and foster customer intimacy and capitalise on key customers, either leveraging the extant sales/field service structures or envisioning new direct data exchange channels.