Dynamic capabilities & digital transformation: A quantitative study on how to gain a competitive advantage in the digital age.

Abstract

Digital transformation is establishing itself as a strategic imperative for firms to stay competitive in a digitally disrupted and constantly changing business world. Prior research indicates the connection between a firm’s responsiveness to external changes - its dynamic capabilities - and its digital maturity, both enhancing its competitive advantage. This study empirically investigates this relationship by comparing 51 German utility firms via an online survey sent to C-level representatives involved in digital transformation activities. The results show a significant positive effect of dynamic capabilities on digital maturity, and of both concepts on competitive advantage, with digital maturity mediating the performance effects of dynamic capabilities. The study contributes to the body of empirical research on digital transformation by emphasizing the importance of dynamic capabilities and digital maturity for firms seeking to increase their competitive advantage.