Digital Transformation in Business Strategy: A Review of Drivers, Challenges, and Frameworks

Digital transformation (DT) has emerged as a pivotal force reshaping business strategy, enabling organizations to leverage advanced technologies, data, and innovative processes to achieve competitive advantage in a rapidly evolving global market. This paper provides a comprehensive review of DT in business strategy, exploring its drivers, challenges, and frameworks through a systematic literature review. Drawing on interdisciplinary insights from management, information systems, and innovation studies, the review examines key drivers such as technological advancements, customer expectations, and competitive pressures and challenges, including cultural resistance, technological complexity, and resource constraints. A mixed-method approach, combining qualitative thematic analysis with quantitative evaluation of DT outcomes, synthesizes findings from 120 peer-reviewed articles and industry reports spanning 2010 to 2025. The study identifies that DT enhances strategic agility, customer-centricity, and innovation, with firms reporting 20-30% improvements in operational efficiency and market share. However, barriers like legacy systems, skill gaps, and strategic misalignment hinder successful implementation. A proposed conceptual framework integrates DT into business strategy, emphasizing technology adoption, organizational alignment, and continuous adaptation. For business leaders, the review offers actionable strategies to navigate DT, while policymakers can draw insights for fostering digital economies. The study contributes to management literature by addressing theoretical gaps and providing a scalable, practical framework for DT integration, with implications for organizational resilience and long-term success. By highlighting best practices and future research directions such as the role of artificial intelligence (AI) and sustainability in DT this review underscores the transformative potential of DT in redefining business strategy, driving innovation, and fostering sustainable growth in an increasingly digital world.