Competitive Capabilities and Performance among SMEs: Exploring the mediating role of Digital Platforms enabled Business Model Experimentation and Competitive Advantage

Abstract

Digitalization has evolved as multidimensional phenomena and impacts significantly to the business world. To keep track of digital transformation, companies are heavily investing in digital platform capabilities, and this investment is facilitating them to perform business model experimentation to bring innovation. This paper intends to explore the role of these two crucial growthpromoting variables in the development of the small and medium enterprises (SMEs) firm's capabilities: Market Intelligence; Marketing Communication; Product Innovation and Pricing. Through this paper, the researcher contests the argument; however, these four capabilities lead to the internationalization related performance of SMEs but mediated through competitive advantage. Along with these arguments, this research also explored the role of digital platform capability in business model experimentation. It examined the mediating role of business model experimentation in the capability development by digital platform capability. The research model under examination belongs to the explorative school of research; hence researcher has used partial least square - structural equation modelling (PLS-SEM) on a sample of 211 Indian SMEs belonging to Art and Craft based business. Hypothesis testing results facilitate exciting insights about the direct and indirect effects of digital platform capabilities, business model experimentation, capabilities, competitive advantage. In light of the findings of research policymakers and SME's consultants, managers may get practical insight to develop an intervention mechanism. And researchers working in this area will get a fresh look at the antecedents of SMEs performance as this model is explorative, future research may explore the testing of the model in different geographic location and industry context.