BUSINESS RESILIENCE OF TRADITIONAL MARKET VENDORS IN THE DIGITAL TRANSITION: A CONCEPTUAL MODEL BASED ON DYNAMIC CAPABILITY AND LOCAL WISDOM

Abstract

Digital transformation has changed patterns of competition and consumer behavior, requiring traditional market vendors to develop adaptive capabilities in order to sustain their businesses. However, most previous studies have focused on technology adoption, while the gradual process of business adaptation that shapes business resilience has received relatively little attention. This study aims to develop a conceptual model of business adaptation among traditional market vendors in the face of digital transformation by integrating the perspectives of dynamic capabilities and local wisdom. The study employs an integrative literature review using a conceptual-qualitative approach through the synthesis of various literature on digital transformation, dynamic capabilities, business resilience, and business adaptation among small enterprises. The findings indicate that vendors’ business resilience is built through adaptation stages sensing, learning, adapting, and integrating—which ultimately foster business resilience. Furthermore, local wisdom manifested in customer trust, social relationships, a culture of patronage, bargaining practices, and personalized service serves as a reinforcing factor that supports the success of the digital adaptation process. The resulting conceptual model emphasizes that digital transformation should not be understood merely as the adoption of technology, but rather as a process of business transformation that combines adaptive capabilities with local values to enhance the competitiveness and sustainability of traditional market vendors’ businesses. This model is expected to make a theoretical contribution to the development of small business management studies and to serve as a foundation for empirical research and the formulation of policies aimed at empowering traditional market vendors in the digital age