In an increasingly competitive global market, digital transformation and sustainability have become vital for the international growth of small- and medium-sized enterprises (SMEs). However, research has yet to fully address how these two forces can impact SMEs’ international competitiveness. This paper examines eleven Italian manufacturing SMEs, uncovering four strategic pathways they adopt when addressing digital transformation and sustainability strategies – digital transformation-led, sustainability-led, parallel, and integrated approaches. Applying a contingency theory lens, the study reveals that each pathway's success varies based on specific industry demands, market expectations, and internal resources. Findings suggest that firms integrating digital and sustainability efforts achieve greater resilience and international positioning, while those prioritizing a single strategy effectively address specific regulatory or operational goals. The study advances international business (IB) research on strategic integration and provides managers with practical guidance to adopt context-sensitive strategies rather than striving for immediate integration.
