Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no6.0897

SMEs' Digital Transformation Competencies on Platform Empowerment: A Case Study in South Korea  

MIN, Sun A (Seoul Business School, aSSIST University)
KIM, Bo Young (Seoul Business School, aSSIST University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.6, 2021 , pp. 897-907 More about this Journal
Abstract
Small- and medium-sized enterprises (SMEs) are strengthening their digital transformation strategies with new values on creative technologies and reorganized business models and processes in the ever-changing digital economy. In line with the changes in business environments based on digital platforms' ecosystem, they put forth efforts into strengthening corporate platforms. Accordingly, the study aims to clarify the effects of SMEs' digital transformation competencies on platform empowerment with platform development strategy and envelopment strategy as mediating factors. Notably, among the four platform factors that enterprises require, namely, unique competency strengthening, shared value creation, cost-saving effect, and network effect, this study analyzes which factors are more significantly affected by digital transformation competencies and platform strategies. To this end, study hypotheses were tested based on the survey conducted among 361 SME executives and employees in South Korea. In conclusion, it turned out that SMEs' digital transformation competencies positively affected both platform development strategy and envelopment strategy. However, platform envelopment strategy affected all of the factors of platform empowerment, while development strategy did not affect them. Thus, it was verified that SMEs' digital transformation competencies could affect platform empowerment through envelopment strategy more than platform development strategy.
Keywords
Digital Transformation; Platform Empowerment; Development Strategy; Envelopment Strategy; SMEs;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
연도 인용수 순위
1 Bereznoy, A., Meissner, D., & Scuotto, V. (2021). The intertwining of knowledge sharing and creation in the digital platform based ecosystem. A conceptual study on the lens of the open innovation approach. Journal of Knowledge Management, https://doi.org/10.1108/JKM-10-2020-0769   DOI
2 Boudreau, K. (2010). Open platform strategies and innovation: Granting access versus devolving control. Management Science, 56(10), 1849-1872.   DOI
3 Brettel, M., Friederichsen, N., Keller, M., & Rosenberg, M. (2014). How virtualization, decentralization and network building change the manufacturing landscape: An Industry 4.0 Perspective. International Journal of Mechanical, Industrial Science and Engineering, 12, 37-44.
4 Chang, J. H., Lee, K. H., & Noh, K. S. (2016). A study on comparative analysis for competitiveness of success factors of the platform business. Journal of Digital Convergence, 14(3), 243-250.   DOI
5 Cusumano, M.A., & Gawer, A. (2002). The elements of platform leadership. MIT Sloan Management Review, 43(3), 51-58.
6 Thomas, A., Morris, W., Haven-Tang, C., Francis, M., & Byard, P. (2021). Smart systems and collaborative innovation networks for productivity improvement in SMEs. Journal of Open Innovation, 7(1). https://doi.org/10.3390/joitmc7010003   DOI
7 Teece, D. J. (2012). Next generation competition: New concepts for understanding how innovation shapes competition and policy in the digital economy. Journal of Law Economics and Policy, 9, 97-118.
8 Warner, K. S. R., & Wager, M. (2019). Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning, 52(3), 326-349.   DOI
9 Wade, M., & Marchant, D. (2014). Are you prepared for your digital transformation? Understanding the power of technology AMPS in organizational change. Tomorrow's challenges. IMD Lausanne, Switzerland.
10 Karandikar, H., Nidamarthi, S. (2007). Implementing a platform strategy for a systems business via standardization. Journal of Manufacturing Technology Management, 18(3), 267-280.   DOI
11 Dinertein, M., Einav, L., Levin, J., & Sundaresan, N. (2018). Consumer price search and platform design in internet commerce. American Economic Review, 108(7), 1820-1859.   DOI
12 Vial, G. (2019). Understanding digital transformation: A review and a research agenda. The Journal of Strategic Information Systems, 28(2), 118-114.   DOI
13 Yablonsky, S. (2018) A multidimensional framework for digital platform innovation and management: From business to technological platform. Systems and Behavioral Research Science, 35(4), 485-501.   DOI
14 Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50.   DOI
15 Jacobides, M. G., Knudsen, T., & Augier, M. (2006). Benefiting from innovation: Value creation, value appropriation and the role of industry architectures. Research Policy, 35(8), 1200-1221.   DOI
16 Mehta, A. M., Ali, A., Saleem, H., Qamruzzaman, M., & Khalid, R. (2021). The Effect of Technology and Open Innovation on Women-Owned Small and Medium Enterprises in Pakistan. Journal of Asian Finance, Economics and Business, 8(3), 411-422. https://doi.org/10.13106/jafeb.2021.vol8.no3.0411   DOI
17 Geoffrey, P., Alstyne, V., & Marshall W. (2014). Platform strategy. The Palgrave Encyclopedia of Strategic Management, http://dx.doi.org/10.2139/ssrn.2439323.   DOI
18 Hagiu, A., & Wright, J. (2015). Multi-sided platforms. International Journal of Industrial Organization, 43, 162-174.   DOI
19 Hsieh Y. J., & Wu, Y. J. (2019). Entrepreneurship through the platform strategy in the digital era: Insights and research opportunities. Computers in Human Behavior, 95, 314-323.
20 Huarng, K. H., & Rey-Marti, A. (2019). Special issue on digital transformations and value creation in management. European Journal of Management and Business Economics, 28(2), 110-113.   DOI
21 Jeong, T. S., Lee, S. H., Lim, M. S. (2014) A study on the effects of operating systems platform characteristics on the network effect and intention to use operating systems. Journal of Digital Convergence, 12(1), 37-50.   DOI
22 Kohnke, O. (2017) It's not just about technology: the people side of digitization. Berlin: Springer International Publishing.
23 Koufteros, X., Vonderembase, M., & Jayaram J. (2005). Internal and external integration for product development: the contingency effects of uncertainty, equivocality, and platform strategy. Decision Sciences, 36(1), 97-133.   DOI
24 Laurie, D. L., Doz, Y. L., & Sheer, C. P. (2006). Creating new growth platforms. Harvard Business Review, 84(5), 80-90.
25 Mahmoud-Jouini, S. B., & Lenfle, S. (2010). Platform re-use lessons from the automotive industry. International Journal of Operations & Production Management, 30, 98-124.   DOI
26 Davenport, T. H., & Westerman, G. (2018). Why so many high-profile digital transformations fail. Boston, MA: Harvard Business School Publishing.
27 Berry, H. (2014). Global integration and innovation: multi-country knowledge generation within MNC's. Strategic Management Journal, 35(6), 869-890.   DOI
28 Lee, S. M., Kim, T., Noh, Y., & Lee, B. (2010). Success factors of platform leadership in web 2.0 service business. Service Business, 4, 89-103.   DOI
29 Leong, C., Pan, S. L., Leidner, D. E., & Huang, J. S. (2019). Platform leadership: Managing boundaries for the network growth of digital platforms. Journal of the Association for Information Systems, 20(10), 11-15.
30 Lim, D. W. (2013). A Research trend of the platform strategy in a two-sided market. Korean Association of Industrial Business Administration, 28, 109-139.
31 Meyer, M. H., & Mugge, P. C. (2001). Make platform innovation drive enterprise growth. Research of Technology Management, 44(1), 25-39.   DOI
32 Rogers, D. L. (2016). The digital transformation playbook. New York: Columbia University Press.
33 Priyono, A., Moin, A., Putri, V. N. A. O. (2020). Identifying digital transformation paths in the business model of SMEs during the COVID-19 pandemic. Journal of Open Innovation, 6(4), 104. https://doi.org/10.3390/joitmc6040104.   DOI
34 Rietveld, J.; Schilling, M.A.; Bellavitis, C. (2019). Platform strategy: Managing ecosystem value through selective promotion of complements. Organization Science, 36(6), 1232-1251. https://doi.org/10.1287/orsc.2019.1290.   DOI
35 Rochet, J. C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 1(4), 990-1029.   DOI
36 Rong, K., Lin, Y., Shi, Y., & Yu, J. (2013). Linking business ecosystem lifecycle with platform strategy: A triple view of technology, application and organisation. International Journal of Technology Management, 62(1), 75-94. https://doi.org/10.1504/IJTM.2013.053042.   DOI
37 Rysman, M. (2009). The economics of two-sided markets. Journal of Economic Perspectives, 23(3), 125-143.   DOI
38 Ahmed, I., & Ahmad, S. B. (2021). Effect of Managerial Skills on the Performance of Small- and Medium-Sized Enterprises: A Case Study in Pakistan. Journal of Asian Finance, Economics and Business, 8(4), 161-170. https://doi.org/10.13106/jafeb.2021.vol8.no4.0161   DOI
39 Ye, L., & Yang, H. (2020). From digital divide to social inclusion: A tale of mobile platform empowerment in rural areas. Sustainability, 12(6), https://doi.org/10.3390/su12062424   DOI
40 Kung, L. C., & Zhong, G. Y. (2017). The optimal pricing strategy for two-sided platform delivery in the sharing economy. Transportation Research Part E: Logistics and Transportation Review, 101, 1-12.   DOI
41 Alawaqleh, Q. A. (2021). The Effect of Internal Control on Employee Performance of Small and Medium-Sized Enterprises in Jordan: The Role of Accounting Information System. Journal of Asian Finance, Economics and Business, 8(3), 855-863. https://doi.org/10.13106/jafeb.2021.vol8.no3.0855   DOI
42 Ben M. J. S., & Lenfle, S. (2010). Platform re-use lessons from the automotive industry. International Journal of Operations & Production Management, 30(1), 98-124.   DOI
43 Wang, C., & Cardon, P. W. (2019). The networked enterprise and legitimacy judgments: why digital platforms need leadership. Journal of Business Strategy, 40(6), 33-39.   DOI
44 Trabucchi, D., & Buganza, T. (2020). Fostering digital platform innovation: From two to multi-sided platforms. Creativity and Innovation Management, 29(2), 345-358.   DOI
45 Ustundag, A., & Cevikcan, E. (2018). Industry 4.0: managing the digital transformation. Berlin: Springer.
46 Hirsch, E., & Altgelt, K. H. (1970). Integrated structural analysis: Method for the determination of average structural parameters of petroleum heavy ends. ACS Publications.
47 Munum, Z. H., Dushenko, M., Jimenez, V. J., Shakil, M. H., & Imset, M. (2020). Big data and artificial intelligence in the maritime industry: A bibliometric review and future research direction. Maritime Policy and Management, 47(5), 577-597.   DOI
48 Nambisan, S., Wright, M., & Feldman, M. (2019). The digital transformation of innovation and entrepreneurship: Progress, challenges, and key themes. Research Policy, 48(8). https://doi.org/10.1016/j.respol.2019.03.018   DOI
49 Oettmeier, K., & Hofmann, E. (2016). Impact of additive manufacturing technology adoption on supply chain management processes and components. Journal of Manufacturing Technology Management, 27(7), 944-968.   DOI
50 Parket, G. A., Marshall W. V., & Choudary, S. P. (2016). Platform revolution. New York: Baror International Inc.
51 Westerman, G., Bonnet, D., & McAfee, A. (2014). Leading digital: turning technology into business transformation. Boston, MA: Harvard Business Review Press.
52 Zhu, F., & Iansiti, M. (2012). Entry into platform-based markets. Strategic Management Journal, 33(1), 88-106.   DOI
53 Yun, J. H. (2017). Business model design compass: Open innovation funnel to Schumpeterian new combination business model developing circle. Berlin: Springer Nature.