The Role of Digital Innovation in Shaping Business Strategy in the Digital Era: An Empirical Study Using Structural Equation Modeling
Keywords:
Digital Innovation, Business Strategy, Digital Transformation, Structural Equation Modeling, Digital EraAbstract
Digital innovation has emerged as a fundamental driver of strategic transformation in organizations operating in the digital era. As firms increasingly adopt digital technologies to enhance competitiveness, understanding how digital innovation shapes business strategy becomes critically important. This study investigates the role of digital innovation in shaping business strategy in the digital era using an empirical approach based on Structural Equation Modeling (SEM). Data were collected through a survey of firms actively implementing digital technologies, and the proposed research model examines the causal relationships between
digital innovation capabilities and business strategy development. The results reveal that digital innovation has a significant and positive effect on business strategy, enabling organizations to enhance strategic agility, value creation, and responsiveness to market dynamics. Furthermore, the findings indicate that digital innovation serves as a key enabler in aligning organizational resources and strategic objectives in digitally intensive environments. This study contributes to the literature on digital transformation and strategic management by providing empirical evidence on the strategic role of digital innovation. These findings highlight important guidance for managers in formulating data-driven and innovation centered strategies to ensure sustainable competitiveness in today’s digital environment.
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