Strategic Responses to Digital Disruption in Incumbent Firms– A Strategy-as-Practice Perspective

Abstract

Hardly any organization remains unaffected by the digitalization of society and the whole global economy is shaken by disruptive digital innovations (DDI). This calls for strategic responses from incumbent firms to remain relevant in a changing environment. This study explores the phenomenon of digital transformation and the development of digital business strategy in the context of incumbent firms, in this case, the hotel industry. We address the following research questions: 1) How are hotel organizations disrupted by digital innovations? and 2) How do they respond strategically to these disruptions? The research approach consists of multiple longitudinal case studies of two international hotel chains, offering a rich dataset. “Strategy-as-practice” is used as a theoretical lens. The results show three overall organizational responses due to DDI including: 1) relating to a new digital business environment; 2) translating strategy to practices 3) renegotiating value. Contributions include extending the existing literature on digital strategies and responses to digital disruptions in incumbent firms as well as providing implications to practice.