Digital Transformation and Competitive Advantage in SMEs: Evidence from Zimbabwe

Abstract

This study examined the relationship between digital transformation (DT) adoption and competitive advantage in small and medium enterprises (SMEs) in Zimbabwe. Drawing on the Resource-Based View (RBV) and Dynamic Capabilities (DC) frameworks, the research investigated how DT resources and capabilities translate into cost efficiency, differentiation, agility, and innovation. A descriptive and explanatory survey design was adopted, targeting registered SMEs in Masvingo and Zvishavane across manufacturing, retail, and service sectors. A structured questionnaire was administered to a sample of 122 SMEs, and the data were using descriptive statistics, reliability and validity testing, correlation, and multiple regression analysis. The findings revealed that DT adoption had a significant positive impact on all four dimensions of competitiveness, with the strongest effects observed in innovation and agility. These results suggest that while digital resources enable operational improvements, their strategic deployment through dynamic capabilities is more critical in volatile environments. The study contributes theoretically by integrating RBV, DC, and adoption models in the SME context, and practically by providing guidance for managers and policymakers to prioritise digital investments, skills development, and supportive ecosystems to bridge Zimbabwe’s translation gap.