In today's rapidly evolving business landscape with prevalent uncertainties, firms seek innovative strategies to remain competitive and sustainable. The ascent of digital transformation and artificial intelligence (AI) presents both opportunities and challenges, emphasizing swift adoption and adaptation. SMEs risk further losses by solely focusing on the advantages of new technologies without addressing organizational adaptability and culture. This strategy cannot simply be mirrored from larger enterprises. This study offers a two-phase exploration of the interplay between digital transformation and AI integration. The first phase, informed by literature and qualitative research, crafts a digital transformation strategy. The subsequent phase, through mixed-method case studies, assesses enterprise readiness for AI, resulting in a strategic model validated by industry practices, benefiting enterprise management and AI integration. This study highlights the critical linkage between digital transformation foundations and AI adoption readiness in SMEs, providing strategic insights based on a two-stage research approach.