Does digital transformation pay off? Validating strategic responses to digital disruption

Digitization is claimed to disrupt a growing number of industries, even if to date, limited empirical evidence is made available to assess the magnitude of this phenomenon and types and pay-offs of incumbent firms responses. Leveraging a unique global survey cutting across multi-countries, industries and firms, we provide robust statistical evidence that digitization fits the concept of disruptive innovation. Empirically, digitization already threatens to cut a major part of the profit growth profile of the non-responding incumbent. For companies responding to the threat of digitization, bold aggressive strategic postures by the focal firm have the largest pay-off. Furthermore, such strategy plays may more than hedge the threat of digitization, and build a better growth trajectory than before digital disruption.