Beyond Digital Transformation: Strategic Trade-Offs Between Technology and Operational Advantage In Indonesia’s Advertising Sector
DOI:
https://doi.org/10.61132/icmeb.v2i2.242Keywords:
Digital Transformation, Hybrid Strategy, SMEs, Strategic Trade-Offs, Sustainable CompetitivenessAbstract
This study explores how resource-constrained small and medium-sized enterprises (SMEs) in Indonesia’s advertising sector adapt digital transformation strategies to achieve sustainable development. Using the case of Roxy Maharewa, an SME in Makassar–Gowa, the research examines strategic trade-offs between investing in advanced digital platforms and operationally transformative physical assets. Guided by the Resource-Based View, Strategic Trade-off Theory, and Contingency Theory, this qualitative case study employs semi-structured interviews with key decision-makers. Findings reveal that prioritizing high-capacity production equipment eliminated structural cost disadvantages from outsourced printing, enabling twice to fourth times potential profit margin gains and strengthening market competitiveness. Rather than adopting a fully digital-first approach, the firm employed a hybrid strategy leveraging low-cost digital tools for internal efficiency while maintaining offline relationship management to align with client preferences and infrastructural realities. This asset-led hybrid model demonstrates how SMEs in emerging markets can integrate selective digital adoption with tangible investments to achieve both rapid returns and long-term sustainability. The paper contributes to the discourse on digital transformation by providing a context-sensitive perspective for policymakers and practitioners, emphasizing that in heterogeneous digital readiness environments, blended strategies can deliver superior economic and social.
Downloads
References
Alhosani, K., & Alhashmi, S. M. (2024). Opportunities, challenges, and benefits of AI innovation in government services: A review. Discover Artificial Intelligence, 4(1), 18. https://doi.org/10.1007/s44163-024-00111-w
Ayu Rigan, S. E. D., & Parahiyanti, C. R. (2022). Achieving competitive advantage of SMEs in Malang City through resource based view, entrepreneurship orientation, and innovation. Jurnal Manajemen dan Kewirausahaan, 10(2), 101–110. https://doi.org/10.26905/jmdk.v10i2.7691
Baig, A., Hall, B., Jenkins, P., Lamarre, E., & McCarthy, B. (2020, May 14). The COVID-19 recovery will be digital: A plan for the first 90 days. McKinsey & Company. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-covid-19-recovery-will-be-digital-a-plan-for-the-first-90-days#/
Bouguelmouna, K. (2021). Resources, intangible assets, competencies, capabilities and Algerian SMEs’ performance: Strategy as mediator. Journal of Intercultural Management, 13(4), 63–95. https://doi.org/10.2478/joim-2021-0072
Cardoni, A., Zanin, F., Corazza, G., & Paradisi, A. (2020). Knowledge management and performance measurement systems for SMEs’ economic sustainability. Sustainability, 12(7), 2594. https://doi.org/10.3390/su12072594
Charles, L., Xia, S., & Coutts, A. P. (2022). Digitalization and employment: A review. International Labour Organization. https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_emp/documents/publication/wcms_854353.pdf
Ekawarti, Y., & Endarwati, E. T. (2022). Analysis of the application of resources based view (RBV) in Society 5.0 era in maintaining company business competition. In Proceeding 1st Tanjungpura International Conference on Management, Economics and Accounting (TiCMEA) (Vol. 1, pp. 22–32). https://feb.untan.ac.id/wp-content/uploads/2023/02/3-1.pdf
Faiz, F. (2023). Factors influencing digital technologies adoption among Indonesian SMEs: A conceptual framework (pp. 227–241). https://doi.org/10.2991/978-94-6463-350-4_22
Furr, N., Ozcan, P., & Eisenhardt, K. M. (2022). What is digital transformation? Core tensions facing established companies on the global stage. Global Strategy Journal, 12(4), 595–618. https://doi.org/10.1002/gsj.1442
Germanos, G. (2011). The process of strategy formulation in small and medium enterprises in Greece and the role of accounting information [Doctoral dissertation, University of Birmingham]. https://core.ac.uk/download/pdf/8780079.pdf
Godwin-Opara, M. N. (2016). A resource-based perspective on financial resource strategies for small business sustainability [Doctoral dissertation, Walden University].
Islami, X., Mustafa, N., & Topuzovska Latkovikj, M. (2020). Linking Porter’s generic strategies to firm performance. Future Business Journal, 6(1), 3. https://doi.org/10.1186/s43093-020-0009-1
Katsaliaki, K., Galetsi, P., & Kumar, S. (2022). Supply chain disruptions and resilience: A major review and future research agenda. Annals of Operations Research, 319(1), 965–1002. https://doi.org/10.1007/s10479-020-03912-1
OECD. (2021). The digital transformation of SMEs. https://doi.org/10.1787/bdb9256a-en
OECD. (2024). SME digitalisation in 2024: Managing shocks and transitions An OECD D4SME Survey Policy highlights. https://www.oecd.org/content/dam/oecd/en/networks/oecd-digital-for-smes-global-initiative/FINAL-D4SME-2024-Survey-Policy-Highlights.pdf
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: Technology, Market, and Complexity, 6(4), 104. https://doi.org/10.3390/joitmc6040104
Sulastri, S., Mulyadi, H., Disman, D., Hendrayati, H., & Purnomo, H. (2023). Resilience acceleration model of small and medium enter-prises through digital transformation. Journal of Eastern European and Central Asian Research, 10(4), 609–619. https://doi.org/10.15549/jeecar.v10i4.1355
Titin, Sutrisno, Mahmudah, H., Muhtarom, A., & Syamsuri. (2024). Effect of business digitalization and social media on MSME per-formance with digital competence as a mediating variable. Scientific Journal of Informatics, 11(3), 645–660. https://doi.org/10.15294/sji.v11i3.9942
UNCTAD. (2022). Impact of the COVID-19 pandemic on trade and development: Lessons learned. https://unctad.org/system/files/official-document/osg2022d1_en.pdf
World Bank Group. (2019). The digital economy in Southeast Asia: Strengthening the foundations for future growth. https://documents1.worldbank.org/curated/en/328941558708267736/pdf/The-Digital-Economy-in-Southeast-Asia-Strengthening-the-Foundations-for-Future-Growth.pdf
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Proceeding of the International Conference on Management, Entrepreneurship, and Business
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
