The Dynamic Capabilities of Digital Transformation for Improving Product Customization and Innovation

Abstract

Digital transformation has driven the dynamic growth of firms over the last two decades.  Currently, it is now being implemented by many firms including small and medium sized enterprises.  This quantitative study explores the effects of digital transformation with reference to digital marketing and innovation, which are said to enhance the performance of firms in the automotive parts industry.  The 280 usable subjects from total number of 1,800 SMEs listed in Thai auto-parts manufacturers association were participated in this study.  The questionnaires were developed from reviewing the literature and supported by experts’ suggestion.  There are two mediators in the research framework as customization and innovation, then, Structural Equation Model is a statistical used for testing the hypotheses.  The results indicate digital transformation exerts a significant effect on both digital marketing and innovation.  As well, the indirect effect of digital transformation on firms’ performance is evident through digital marketing and innovation.  These results support that auto-part firms should applied digital transformation appropriately with digital marketing and innovation.  Those functions contribute to firm performance.