Digital Transformation and Strategic Decision Making in Enhancing Competitive Advantage of Culinary SMEs in Central Java

Abstract

This study aims to explore how digital transformation influences strategic decision-making in enhancing the competitive advantage of culinary MSMEs in Central Java. This phenomenon is significant given that digitalization has become an adaptive necessity in responding to changing consumer behavior and increasingly competitive market dynamics. This study employs a qualitative approach using a case study design to deeply understand the experiences and meanings constructed by business owners. Data were collected through semi-structured interviews, participatory observation, and documentation of selected culinary SMEs using purposive and snowball sampling techniques. Data analysis was conducted thematically, referencing the interactive model by Miles and Huberman. The results of the study revealed four main themes: digital transformation as an adaptive strategy; a shift in decision-making from intuition to data-driven approaches; the role of leadership and digital literacy; and multidimensional barriers to the implementation of digitalization. These findings indicate that digital transformation not only impacts technical aspects but also shapes the mindset and strategic decision-making practices of business owners. This study makes a theoretical contribution by reinforcing the perspectives of dynamic capabilities and the resource-based view within the context of SMEs, as well as offering practical implications for enhancing digital literacy and data-driven decision-making capacity. From a policy perspective, an inclusive digital ecosystem is needed to accelerate the transformation of SMEs. Further research is recommended to develop a multi-method approach and expand the sectoral and geographical scope of the study