Digital Transformation Strategy for Small and Medium-Sized Enterprises

Digital transformation exerts diverse impacts on the value chains of existing industries. Specific impacts depend on how given technologies are used. Along with the attributes of the respective industries to which small and medium-sized enterprises (SMEs) belong, the effects of digital transformation serve as influential factors on these businesses in connection with the respective position each business occupies along given value chains.Digital transformation-driven changes in the value chain between manufacturers and intermediaries (distributors) may threaten the very survival of (B2B) manufacturers that face difficulty accessing end-users.Changes in the value chain between the intermediary and the service provider, on the other hand, may threaten the survival of the intermediary by cutting into the intermediary’s domain of activities. The rising importance of the platform economy, accompanied by the transformation of the roles and positions of service providers, presents a wide range of beneficial network effects that SMEs could possibly enjoy. Yet these changes also carry the risk of producing a new hierarchy whose top leaders dominate the market.This paper explores the needs of SMEs as they pertain to digital transformation. The findings of analysis suggest that decision-makers at the levels of businesses and government alike ought to consider the differences between various types of digital transformations, and that policy support is essential to enabling SMEs to make the necessary strategic investments in digital transformation by minimizing uncertainties over expected benefits