The impact of digital platform introduction on business models in SMEs—The interplay of efficiency and innovation orientation

• Explaining divergent SME business model outcomes from the same digital platform. • Conceptualizing dynamic platform orientation as a capability-contingent mechanism. • Explaining SMEs’ ambidexterity in digital transformation over time. • Showing how operational digital, agile, and network capabilities develop. • Connecting capabilities to transformative business model change. This study examines how digital platform introduction drives business model change in small- and medium-sized enterprises (SMEs). Drawing on a case study of four textile firms, we analyze three phases of platform introduction: pre-platform, engagement, and post-platform launch. The findings reveal a dynamic platform orientation, understood as a cumulative and capability-contingent pattern of SMEs’ engagement with the platform over time. All firms initially adopt an efficiency-focused orientation as a resource-conserving entry logic. However, only those that embed the platform deeply enough to enhance their digital, agile, and network capabilities develop episodic innovation-oriented engagement, which may become dominant and enable more transformative business model change. Others remain primarily efficiency-oriented, achieving only incremental gains. The study demonstrates that pre-existing organizational capabilities shape how the platform orientation unfolds and that improvements in these capabilities determine whether an innovation orientation becomes viable. This study theorizes dynamic platform orientation as the mechanism explaining why similar SMEs participating in the same joint digital platform introduction experience divergent business model outcomes. This mechanism advances research on SME digital transformation and clarifies how tightly coupled SMEs can leverage digital platforms for business model change.