Leveraging Artificial Intelligence for Digital Transformation: Strategic Pathways toward Sustainable Competitive Advantage

Mohamed Ibrahim Hassan Farag

doi:10.31181/msa41202746

Authors

Mohamed Ibrahim Hassan Farag 1) Military College of Management Sciences, Helwan University, Helwan, Egypt; 2) Faculty of Economics and Political Science, Cairo University, Giza, Egypt Author https://orcid.org/0009-0004-4989-9261

DOI:

https://doi.org/10.31181/msa41202746

Keywords:

Digital Transformation, Competitive Advantage, Intelligent Automation, Artificial Intelligence, Management Science, Innovation Capability, Data-Driven Strategy

Abstract

This study examines the role of artificial intelligence (AI) in driving digital transformation and its impact on achieving sustainable competitive advantage in modern organizations. It adopts a comprehensive analytical approach to explore the theoretical foundations of digital transformation, the strategic integration of AI, and the mechanisms through which AI enhances organizational performance. The study identifies key AI-driven strategies, including data-driven decision-making, intelligent automation, customer-centric personalization, and platform-based business models, which collectively improve operational efficiency, foster innovation, enhance decision-making quality, and support both cost leadership and differentiation. At the same time, it highlights major challenges associated with AI implementation, such as data quality issues, technological complexity, organizational resistance, and ethical and regulatory concerns, emphasizing the need for a holistic and well-structured approach. The findings indicate that organizations effectively integrating AI into their strategic and operational frameworks are better positioned to sustain competitive advantage in dynamic environments. The study concludes by proposing practical recommendations, including strategic alignment, strengthening data governance, developing human capital, and establishing ethical AI frameworks, while contributing to the literature by offering a structured framework linking strategy, impact, and risk for both academics and practitioners.

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