The impact of digital transformation on business efficiency

Abstract

This master’s thesis examines the theoretical framework of digital transformation (DT) and its impact on business efficiency, using Haier Group as a practical case study in the home appliance manufacturing industry. The research begins by defining DT as the integration of digital technologies (big data, AI, cloud computing, IoT) into all business operations—distinct from incremental digitalization—and traces its evolution: from digitizing paper-based processes (2000s–2010s) to building data-driven ecosystems (current phase). The thesis then analyzes the five core dimensions of DT (strategic alignment, business value creation, operational efficiency, user experience, technical capability), confirms their interdependence through Haier’s example, such as how the development of IoT platforms has facilitated operational optimization, and improved customer satisfaction. It also explores the theoretical underpinnings of DT: strategic change theory (Haier’s restructuring from a hierarchy to a “platform + micro-enterprise” model), the Resource-Based View (COSMOPlat as a unique resource for mass customization), dynamic capabilities theory (rapid production reconfiguration during COVID-19), and stakeholder theory (balancing the interests of customers, employees, and suppliers). The study assesses the effectiveness of Haier’s DT using key metrics: an 82% reduction in production lead time (from 45 to 8 days), a 126% increase in inventory turnover ratio (from 4.2 to 9.5), a 155% rise in operating profit margin (from 4.5% to 11.5%), and digital-enabled products accounting for 35% of revenue (2023). It also addresses challenges (legacy system integration, employee resistance) and mitigation strategies (phased implementation, upskilling programs). Comparative analysis reveals Haier outperforms competitors (Midea, Whirlpool) and global benchmarks in digital maturity (Level 4—Transformational) and all key efficiency metrics. The conclusions and proposals summarise the results of the study.