Creating competitiveness in incumbent small- and medium-sized enterprises: A revised perspective on digital transformation

• Uncertainty exists on the implications of digitalisation for SMEs’ competitiveness. • SME digital transformation can be an enabler of or outcome from competitive advantage. • Digital competitiveness relies on technical, organisational, and cultural entities. • Idiosyncratically aligning transformational entities fosters SME’s e-market position. The coronavirus disease 2019 pandemic has sped digital transformation efforts of small- and medium-sized enterprises (SMEs). However, recent evidence indicates that SMEs are falling behind in the digital uptake. Therefore, policymakers have repeatedly emphasised the importance of digital transformation in SMEs. To better understand the competitiveness of incumbent SMEs, which potentially resulted from digital transformation, we conducted a conceptual theory synthesis approach. We distil key concepts from the literature and propose a novel framework for SMEs’ competitiveness through the lens of critical realism. Nine perspectives on the extant SME digital transformation areas suggest a relationship between digital transformation and competitiveness. In a multilevel research agenda, nine fundamental premises are proposed to further theorise and empirically investigate incumbent SMEs’ digital efforts to achieve higher competitiveness. The study concludes with managerial implications for aligning an incumbent’s strategy with the digital transformation.