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6 Digital Strategies (6 types (Platform play (Online platform, Direct…
6 Digital Strategies
6 types
Platform play
Online platform
Direct interaction B2C, B2B
New marginal supply
Tapping into previously inaccessible sources of supply at marginal cost
Idea: online reseller options for existing customers to obtain another
Digitally-enabled products and services
Create new products or services with digital features to serve new demand
Example: Oral-B toothbrush with Bluetooth-enabled digital guidance
Rebundling and customising
Use of digital technology to rebundle products or services to better serve customers
Digital distribution channels
Invest in digital distribution channels for easier access for customers
Cost efficiency
Improve cost efficiency
Automation
Cost scaling
Focus is on survival rather than creating a source of comparative advantage
Challenges
Disruption
Aggressively compete with legacy models
Incumbent fights back
halves annual revenue growth
1/3 incumbents fail to respond to digital
Sustainable Growth?
What outperformer's do?
Reshuffle their activity portfolio (sell and buy)
Adapt position in their industry value chain that matters
Top companies achieve above 8% growth
Clustering
Level of strategy boldness
Measure through degree of changes
Measure of radical changes
Expense of cannibalizing their current revenue/profit pool
Willing to invest in digital technology
Bold digital strategy = Successful digital transformation
Performance measures in revenue and profit growth
Performance measures in return on digital investment
Conclusion
Successful companies
Had a bold corporate strategy
More likely to employ 1 of 3 offensive digital strategies
Less focus on cost efficiency
More focus on new products or new customers
Incumbents lose when they play defense