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Topic 2: Digital Leadership Framework - Coggle Diagram
Topic 2:
Digital Leadership Framework
The core essence of
Business
Business model
What are the recent innovations in business models, and best practices across industries?
Build an asset-light business:
Amsterdam’s Schiphol Airport example
Tesla example
Create value through experience:
Case study of Best Buy
Company must transform its business model
Build an asset-light business
Transition to product-as-a-service
Transition to product-as-a-service
Outcome-based: focus on the outcome of the customers
Improved reliability and reduced cost: company is motivated to improve products reliability, lifetime and reduce operating cost
Expanded customer based: company retains ownership and maintenance make the product more affordable
Customer-focused innovation: company becomes customer-focused
Organizational shift: mindsets change from selling products to selling outcomes
Platforms and Ecosystems
How can company manage a platform, and an ecosystem of players?
Developing a platform business
Facilitating access and transactions
build tools and services to provide easy access, use algorithms to match players on multiple sides of the platform
Choosing between open and closed systems
Open system: attract a larger number of independent players, foster greater innovation and variety, build more complementary products, lower prices and create a large market
Closed system: more control, better integration and coordination across various products and services superior customer experience
Buidling critical mass
Create a supply of good product and services first
Target small market to have a proof of concept
Subsidize the side of platform that contributes more to demand
Build a freemium model: free basic product encourage adoption and create large user base that generates strong network effects
Managing partners in the ecosystem
platforms develop an ecosystem of partner who provide complementary products and services
Governance
platform owners need a governance system to create rules by which various player operate within its ecosystem
Platform evolution
Examples for e-commerce platform, ride-sharing platform, and home-sharing platform
Differentiation of Platforms and Ecosystems:
An ecosystem
is a community of interacting entities. The members of the ecosystem can be organizations, businesses, and individuals, all creating value for one another in some way; mostly by producing or consuming goods and services.
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A platform
is the way a particular community or ecosystem is organized to interact with one another and to create value. A platform typically is focused on bringing the ecosystem together and reducing friction for interactions to take place.
Business Scope
What do firms need to do to stay within the core competencies and stay competitive in the digital age?
Redefine the company business
Competition is no longer defined by traditional product or industry boundaries
Case study of Amazon
Competitive advantages:
Company needs to re-think its core competencies and competitive advantage as competitive advantage no longer comes from low cost or product differentiation.
Strong competitive advantage comes from complementary products and network effects
Data and customers
:
Value of data increases as more data is collected.
Customers create a powerful network effect.
Introduction to Digital Leadership Framework
Reimagine your business
Evaluate your value chain
Reconnect with your customers
Rebuild your organization
(to achieve success, firms must tackle all parts)
Objectives:
Introducing the Digital Leadership Framework
Introducing 2 parts of the FW: the business and the value chain
Required reading: Field, M., Patel, S and Leon, H 2019, "The Dividends of Digital Marketing Maturity"
The value chain
Operational Excellence
What are the new technologies that drive operational excellence?
Digital supply chains
Demand-driven supply chain
Warehousing, logistics and fulfilment
Augmented and virtual reality
Design
Assembly
Training
Industry 4.0
Smart factory
Industrial internet and predictive maintenance
Operational excellence in service industries
Omnichannel
How to create an omnichannel strategy that synthesizes online and offline channels?
Physical and Digital Diffusion
How can technology help customers find things, try things, pay things, and return things?
Solving channel conflict and channel power
Complementarity
The key to omnichannel transition is to think of different channels as complements, not as substitutes
Complementarity across products
Complementarity across customers
Complementarity across customer lifecycle
Research and Development
What are the new innovation models?
User-led innovation model
: emphasize the important role of users in developing and modifying the products
Open innovation
is preferred as product lifecycles become shorter and R&D costs continue to increase.
Limitation of open innovation: less effective for broad and conceptual questions
Producer-led/ company-led innovation model
: companies spend a lot of money in creating innovative products that give them sustainable competitive advantage
