The rise of digital platform companies has shaken many business sectors and led to the emergence of new competition arenas, digital business ecosystems. Incumbent firms realize they need to change how they do business, and that conventional business strategies are no longer fit for competing in these new digital arenas. Our research questions are (i) how can incumbent service firms develop and leverage a digital business strategy, and (ii) how can hotels and hotel chains compete with online travel agencies (OTAs) in digital hospitality ecosystems? We chose a longitudinal case study to explore how a large Scandinavian hotel chain implemented a digital business strategy to compete with OTAs in a digital hospitality ecosystem. Our approach was to stay close to the practices and actual behaviours of the company and the individuals engaged in fulfilling the strategy. We contribute to theory and practice by proposing that (i) incumbent firms need two strategies, one for the digital ecosystem and one for the traditional competition arena, (ii) that the two strategies should be implemented ambidextrously but also integrated and (iii) that to succeed, it is essential to establish self-reinforcing interactions between the digital and the physical.
Bygstad, Bendik; Iden, Jon; and Ulfsten, Andreas
"Digital Business Strategies for Incumbent Firms. How a Scandinavian hotel chain competes with the internet giants,"
Scandinavian Journal of Information Systems: Vol. 32
, Article 3.
Available at: https://aisel.aisnet.org/sjis/vol32/iss2/3