Innovations and digital transformation as a competition catalyst

Abstract

The basic aim of the paper is to examine the relationship between innovation and digital transformation, on the one hand, and the conditions of competition on the other hand. The intensive application of advanced technologies leads to a digital transition and companies which operate in a changing environment must pass through it. The market share depends on, among other factors, the speed of digital transformation. One of the implications of this process is the strengthening of competitive pressure among companies. The correlation between exposure to digitalisation and productivity causes the effects that are reflected an increasing gap between the most successful companies and those less successful who are struggling to survive in the market. The question arises what is the role of innovations in modern business conditions and whether they represent substitution for price competition. The results show that efficient enterprises in the static neoclassical sense can not withstand the pressure of their competitors without innovations. Therefore, it can be noted that innovations are crucial for survival of companies in the capitalist economy.

The challenges of managing the entreppreneurial organization

“…The requirements of an entrepreneurial organization do not match a traditional organizational structure, which implies that the organization cannot be both organic and mechanistic, at the same time (Burns & Stalker, 1961). Traditional enterprises cannot withstand the pressure of their competitors without innovations (Kostić, 2018). Standardized activities such as payroll, accounting, taxation, procurement tend to be highly bureaucratic, while new products development, marketing and strategic planning require a more flexible organic structure (Grant, 2009, pp.…”

Critical factors of digital transformation success: A literature review

“…Ismail, Khater and Zaki [7] provided a more specific definition of digital transformation, designating it as a "process through which companies converge multiple new digital technologies, enhanced with ubiquitous connectivity, with the intention of reaching superior performance and sustained competitive advantage, by transforming multiple business dimensions, including the business model, the customer experience (comprising digitally enabled products and services) and operations (comprising processes and decision-making), and simultaneously impacting people (including skills talent and culture) and networks (including the entire value system)" [7].…”

“…Digital transformation also manifests itself in the concept of "extended persona", i.e., changes in how individuals present themselves and communicate caused by technological advances. This led to an exponential increase in the volume of digital data, creating a flood of information that bypasses all barriers [7]. Digital business transformation is a major challenge for any organisation, which is why the first step in this process should be to answer the question "Why transform?"…”

“…Digital business transformation can be driven by several factors, which is the reason why the second CSF, "Awareness of internal and external drivers of digital transformation", was included in Table 2. Ismail et al [7] divided the drivers of digital transformation into two major groups: internal motivations and external triggers. Internal motives and external triggers jointly form the context of digital transformation, rendering such a dichotomy conditional, as most internal and external drivers of transformation are convergent.…”

“…Operational motivations of digital transformation are associated with achieving greater efficiency and work productivity. Many organisations see application of digital technology as an opportunity to adopt innovations and differentiate from the competition [7].…”