Over the past decade, the digitization of business infrastructure and the integration of products, processes, and services have significantly transformed the corporate landscape. The advent of technologies such as cloud computing, the Internet of Things, social technologies, mobile platforms, and data analytics has disrupted the profitability of many traditionally successful organizations. However, these same technologies also offer new opportunities for businesses to create value by combining existing competencies with transformative capabilities.

The pervasive influence of digital technologies across various industries necessitates a fundamental shift in business strategies. Consequently, IT strategy should no longer be viewed merely as an operational tool but should be integrated with business strategy to form a cohesive digital business strategy. Leaders who grasp the potential of digital technologies to enhance organizational integration are likely to develop effective digital strategies. These strategies are not isolated technological plans but comprehensive business strategies that leverage opportunities in the digital economy. Due to their extensive impact, digital strategies prioritize the distinct dimensions of digital transformation and aim to integrate seamlessly with other business strategies.

Traditionally, IT strategy was considered a subset of business strategy, focused primarily on guiding the IT department. Venkatraman and Henderson (1993) characterized IT strategy as an operational-level strategy within the IT domain, influencing business strategy but often failing due to misalignment with broader business objectives. The contemporary view, however, acknowledges that technology’s role extends beyond the IT department to encompass the entire business. This recognition has led to the convergence of IT and business strategies into what is now known as digital strategy.

Digital business strategy, or digital transformation strategy, is a relatively new concept that requires clear definition. Some perspectives frame digital strategy in terms of an organization’s digital assets and initiatives, treating it as an extension of IT and digital marketing strategies. While this resource-based view recognizes the importance of digital resources, it tends to focus on incremental changes rather than transformational shifts.

A broader perspective of digital strategy involves using transformative technologies to build organizational capabilities that enable responsiveness to dynamic market conditions. This approach also adopts a resource-based view but emphasizes creating differentiated value through digital resources.

Venkatraman’s “The Digital Matrix” (2017) offers a more comprehensive network-based view of digital strategy. This model highlights the importance of creating networks of customers and partners, fostering relationships that differ from traditional business interactions. Success in digital strategy, according to this view, depends on collaboration among digital giants, tech entrepreneurs, and traditional industry players. Implementation involves continuous monitoring, experimentation, strengthening existing business models, and fundamentally reimagining them.

This comprehensive approach underscores the importance of nurturing human talent with transformative technologies while maintaining a trans-organizational perspective. It emphasizes co-creating new capabilities with various actors, both within and outside the industry. Organizations are seen as active participants in multiple ecosystems, adapting and harmonizing with these ecosystems based on their capabilities, goals, and market conditions.

The power of digital strategy lies in its broad scope and clear purpose. Designing an effective digital strategy requires critical decisions in several key areas at both the business and operational levels. These include how to leverage technology, create value, determine necessary structural changes, and allocate resources, particularly financial ones.

Factors such as industry specifics, organizational scope, and inherent characteristics lead to varying technological needs across organizations. This variation necessitates distinct digital strategies. Research indicates that organizations in the early stages of digital maturity prioritize enhancing internal operations through their digital strategies. In contrast, digitally mature organizations focus on broader business transformation, resulting in diverse digital strategy types across organizations.

Russ et al. (2016) identified two primary approaches to digital strategy: customer engagement strategy and digital solutions strategy. These approaches, while overlapping, serve different purposes. The customer engagement strategy reshapes the organization’s interactions with existing customers and stakeholders. It leverages transformative technologies to enhance all touchpoints, thereby strengthening relationships with customers and other entities.

Conversely, the digital solutions strategy redefines the organization’s offerings by transforming the business model. This approach facilitates the flow of information, thereby increasing the value of products and services. The strategic focus here is on creating enhanced value not only from the products and services but also from the ecosystems in which the organization operates.