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In the digital transformation era, small and medium-sized enterprises (SMEs) in India face both opportunities and challenges in adopting Industry 4.0 (I4.0) technologies. To ensure successful I4.0 implementation, the study aims to develop a digital readiness assessment model based on stakeholders’ perceptions.

This research adopts a mixed-method framework to develop a comprehensive maturity model to assess the digital readiness of SMEs. The framework uses systematic literature review to comprehend I4.0 solution dimensions, followed by empirical validation of dimensions through a questionnaire survey and hypothesis formulation.

The digital readiness model is applied to companies working in four SME sectors, namely, automobile, machinery and equipment, pharmaceutical and agriculture. The findings highlight the necessity for sector-specific strategies to enhance digital capabilities, addressing unique challenges and leveraging opportunities for growth.

The proposed readiness assessment model, developed based on the 14 solution dimensions, 41 prerequisites and six levels, enables the respondents in SMEs to make factual assessments of their digital readiness and initiate efforts toward successful I4.0 implementation.

This research uniquely combines expert insights, multi-dimensional assessment and rigorous statistical validation to provide a robust conceptual framework for SMEs to navigate their digital transformation journey effectively.

In the context of promoting sustainable development in SMEs, the present study aims to investigate the relationship among solution dimensions based on the Industry 4.0 (I4.0) concept.

The study employs a comprehensive methodology that includes a systematic literature review, workshop, grounded theory and interpretive structural modeling. Various dimensions concerning I4.0 sustainability are tested and evaluated using a questionnaire design followed by hypothesis formulation. Further, grounded theory is used to extract the key solution dimensions that capture the essence of I4.0 implementation in SMEs. Finally, the solution dimensions for I4.0 sustainability are modeled using the ISM approach to understand the structural interdependencies among them, and Matrice d'Impacts Croisés Multiplication Applied to a Classification (MICMAC) analysis is done to understand the driving and dependence power among these dimensions.

The study identified 14 solution dimensions for the implementation of I4.0 in SMEs for sustainable development. Out of the 14 solution dimensions, human resource training programs (D4) appear at level 11, followed by top management commitment (D1), strategic collaborations (D3) and coordination among key stakeholders (D5) at level 2 in the hierarchical interpretive structural modeling (ISM) model. Also, these dimensions have an effect size of more than 0.50 which indicates a substantial correlation between the sustainability dimensions and Industry 4.0 implementation in SMEs.

The study contributes to the overall goal of fostering sustainability within the SME sector, which can pave the way for various stakeholders for the successful implementation of I4.0 sustainable solution dimensions.

On completion of the analysis of this case, students would be able to: analyze how external environmental factors impact the product market matrix; evaluate growth choices open to an incumbent business and how they create and capture value; and develop corporate strategies of a multi-business firm to respond to external dynamics.

The case presents an opportunity to examine the timing of entry of an incumbent firm in a new market segment. Bajaj Auto, a well-established Indian two-wheeler and three-wheeler manufacturer and exporter, chose to enter the electric vehicle space much later than technology start-ups and other incumbents. After three years, the company’s business in this segment might appear successful, but it is not in a position to dislodge the market leader, Ola Electric. The case focuses on the dilemma of market entry timing, positioning of a new product, managing an interlinked product portfolio, the need to develop a robust ecosystem of partners and dealing with unpredictable export markets.

The case can be discussed in a session of graduate-level business strategy/corporate strategy/international business course that deals with the growth strategies of an incumbent.

Teaching notes are available for educators only.

CSS 11: Strategy.