Digital business strategy and platform risk as determinants of knowledge strategy in SMEs

Purpose The impact of the digital industry and firm digitization on innovation has become a significant focus in research. Prior studies have focused on how digital business strategies (DBS) affect value creation, financial performance and operational efficiency; however, fewer studies have been conducted to examine how these approaches affect product innovation and strategic competitive performance. This study aims to investigate the ways in which digital business strategies impact strategic competitive performance and product innovation. Design/methodology/approach Employing the resource-based approach, the study investigates the fundamental processes by which these tactics produce these results. Data from 481 Chinese enterprises was acquired, and structural equation modeling was used for analysis. Findings The findings indicate that a DBS positively influences knowledge digitization but does not significantly impact digital knowledge transfer management. Additionally, both knowledge digitization and digital knowledge transfer management (DKTM) are shown to positively affect strategic competitive performance and product innovation. Knowledge digitization mediates the relationship between DBS and both strategic competitive and product innovation performance. Furthermore, digital platform risk is found to dampen the effect of DBS on knowledge digitization. Originality/value This study provides valuable insights into how DBS impacts strategic competitive performance and product innovation, mediated by Knowledge digitization and DKTM.