Can Digital Platforms help SMEs Develop Organizational Capabilities? A Qualitative Field Study

Small and medium enterprises (SMEs) increasingly leverage digital platforms in order to compensate for their resource limitations. In this study, we draw on an organizational learning perspective to explore how SMEs benefit from the resources provided by third-party digital platforms. Specifically, we examine the mechanisms that enable SMEs to develop organizational capabilities through the use of digital platforms. We conducted a qualitative field study of retail SMEs on a major e-commerce platform and found that SMEs are able to develop both operational and dynamic capabilities by leveraging platform-provided infrastructural, informational, and reputational resources. We identify key learning mechanisms that enable SMEs to develop new capabilities from the use of third-party platforms. However, the use of digital platforms also impeded the development of SME capabilities by inhibiting their learning. We highlight the implications of these findings for the management of SMEs and for the design of digital platforms.