1 Chapter I Introduction I.1 Background I.1.1 Digital Technology Disruption With the rapid expansion of the internet, we have been ushered into the era of the digital economy, transforming not just our daily lives, but also the way businesses operate. The growth of digital technology and the internet has largely brought about positive changes, particularly from the customer's perspective (Le & Suh, 2019). However, this transformation is not always favorable for businesses. Technological advancements have led to the downfall of many previously invincible companies. This rapid change situation is called VUCA (Volatility, Uncertainty, Complexity, and Ambiguity). In such circumstances, an organization needs a robust capacity for transformation and innovation to ensure its survival. It is essential, therefore, that companies undertake digital transformation. When companies struggle to implement digital transformation effectively, it can lead to negative consequences, such as reduced competitiveness, a loss of market share, lower revenue, and a drop in employee motivation and productivity. Employees may become frustrated or disengaged if they feel that the company isn't investing enough in digital technology. This can result in resistance or reluctance to adopt new technologies or work methods. For instance, Nokia who once the leader in mobile phones, with market share plummeted from 53% in 2007 to just 3.1% by 2013 (Alibage & Weber, 2018). Nokia failed to adapt to the smartphone revolution. Despite its early lead in mobile technology, Nokia struggled to compete with the innovation brought by touchscreen smartphones. The company's reliance on its Symbian platform and slow response to consumer demands for more user-friendly interfaces led to its decline in the face of IOS and Android’s rise (Alibage & Weber, 2018). Another example is Blackberry, known for its secure email and physical keyboard, saw its global smartphone market share drop from 19.9% in 2009 to less than 0.3% by 2016 (Muthukumar et al., 2017). Blackberry misjudged the importance of consumer- focused features, sticking to its business- oriented roots. The rise of app- centric 2 smartphones by Apple and Android, offering a broader range of applications and a more engaging user experience, made Blackberry’s offerings seem outdated (Trivedi, 2017). Another example is Blockbuster, a video rental company that failed to adapt to the digital age and eventually went bankrupt. Blockbuster didn't embrace digital technologies like online streaming and didn't recognize the shift in consumer preferences toward digital content. The last example in this introduction is Kodak, once a major player in the film and camera industry, which struggled to adapt to the digital era.