Abstract: Traditional companies will encounter challenges such as organizational inertia and demand conflicts when implementing digital transformation. In practice, some companies have resolved these challenges through internal entrepreneurship and successfully achieved digital transformation. However, the existing literature lacks sufficient explanations for this phenomenon. Based on the strategic evolution perspective of resource matching, this paper uses case study method to analyze the digital transformation process of two traditional service companies and explore the underlying mechanism. Specifically, this paper mainly makes three contributions. Firstly, this research summarizes a new strategic evolution path, from internal entrepreneurship to digital innovation within the organization, and then to external collaboration across organizations. Secondly, this paper finds that internal entrepreneurship can overcome organizational inertia through structural differentiation and power distribution, thus promoting the rapid renewal of organizational resources and the exploration of digital innovation. Finally, this paper also refines the relationship between organization and environment into the mismatch between resource renewal direction/amplitude and environment, and discusses the key behaviors to promote their matching, which enriches the related research of resource matching.

Key words: digital transformation, strategic path, internal entrepreneurship, resource matching, case study