Digital Transformation and Sustainable Business Models: Implications for Competitive Advantage in Developing Economies

Abstract

Digital transformation has come out as a primary force of organizational change and has transformed the way companies are designing and executing sustainable business models (SBMs) to gain competitive advantage. The introduction of digital technologies into business strategies is the opportunity and challenge in the developing economies, in which institutional constraints and resources limitations are common phenomena. This paper considers how digital transformation can support sustainable business models and its implication on competitive advantage in the developing nations. The study is based on a mixed-methods research design and explores the interaction between digital capabilities, business model innovation, and sustainability-oriented strategies to affect the performance of firms. The results suggest that digital transformation is a strong boost to the efficiency of SBMs as it allows firms to become more efficient in their operations, create innovations, and better adapt to the dynamism in the market. Moreover, the digital capabilities enhance the connection between sustainability practices and competitive performance, and they emphasize the strategic significance of sustainability in the new markets. The research also indicates that companies that use advanced digital technologies and platforms are in a better position to attain sustainable competitive advantage due to innovation and optimization of resources. This research is believed to add to a more holistic approach to the literature on digital transformation, sustainability, and strategic management by incorporating insights into how companies in developing economies can use digitalization to improve their sustainability and competitiveness. The research has both theoretical and practical implications to managers and policymakers who need to propel sustainable growth using digital innovation.