Artificial Intelligence–Driven Business Model Innovation: Strategic Transformation in the Digital Economy

S. Praveen; L. Karthikeyan; C. Sam Sagaya Moses

doi:10.34293/sijash.v14iS1-June.11209

S. Praveen Research Scholar, Department of Management Studies, Nehru College of Management, Coimbatore
L. Karthikeyan Director-MBA, Department of Management Studies, Nehru College of Management, Coimbatore
C. Sam Sagaya Moses Student, MBA, Hallmark Business School, Trichy

DOI: https://doi.org/10.34293/sijash.v14iS1-June.11209

Keywords: Artificial Intelligence, Business Model Innovation, Strategic Transformation, Digital Economy, Strategic Agility

Abstract

Artificial Intelligence has emerged as a very significant tool in modern-day economies that aid in enhancing the growth and development of businesses. In fact, many businesses use AI technologies to automate and enhance processes and make better decisions in relation to various business activities. Besides being useful as a technology advancement, AI is also proving itself useful in transforming the business models. This process of transformation is referred to as Business Model Innovation. By applying AI, the firms are able to develop better insights about their customers, predict trends in the markets, and develop new digital services.
AI Business Model Innovation allows firms to overcome conventional practices. In other words, AI fosters the emergence of customized services, subscriptions, digital platforms, and other innovations. Nonetheless, only using AI is not sufficient for firms to innovate. The strategic utilization of AI along with its integration into the company’s organizational structure is needed. In case the firm is agile and able to respond to changes, it can benefit from applying AI. In such a way, strategic agility intensifies the effect of AI on the innovation outcomes. Lastly, innovative processes driven by AI positively influence the performance of companies.