How do firms build and sustain strategic competitive advantage in the digital economy?: A case study in digital banking

Traditional strategy scholarship has not kept pace with rapid changes in the digital economy. In addition, strategic planning tools and process used in organisations are slow, industry bound, fail to account for global competition and often have an over simplified view of business versus the reality of complex business ecosystems. They are inadequate for the needs of organisations operating in the digital economy. This study addresses these shortcomings, examining the ways in which firms may build and sustain strategic competitive advantage in the digital economy. The global digital banking industry was chosen for qualitative analysis as it is widely considered to be the 'most' digital of any industry and represents an extreme perspective of the digital economy, from which inferences can be drawn. Using case study methodology to examine the practice of strategy approaches to digital transformation, five key dimensions are utilised-digital transformation, business architecture, business models, platforms and strategic planning. Interviews were conducted with eight chief executive officers to provide a broad, integrated perspective on the practice of developing strategic competitive advantage in the digital economy. The study finds that traditional forms of strategic planning are not being utilised and dynamic experimentation-based strategic planning practices dominate. Business architecture that leverages tangible asset-less and asset-light structures lead with significant emphasis on intangible assets. Platforms and complex business ecosystems form an important feature of modern business architecture, but definitions and models are lacking. This study contributes to the body of business strategy knowledge by providing insight into the practice of strategic planning in the digital economy, which will help address conflicting perspectives in the literature, identify implications for strategy scholarship and propose improvements. The findings may be used by practitioners, academics, business leaders, entrepreneurs, investors and managers.