Digital transformation - additional content
23 flashcards · Other · by Hubert Prymus
Digital resources
Digital assets Digital agility Digital network capability Big data analytics capability
Customer – harness customer network
Customers as mass market – customers as dynamic network Communication are broadcast to customers – communications are two-sided Firm is the key influence – customer is the key influencer Marketing to persuade purchase – marketing to inspire – loyalty, advocacy, purchase One way value flows – reciprocal value flows Economies of (firm) scale – economies of (customer) value
Tool: customer network strategy generator
Objective setting Direct objectives – you are responsible for addressing in your project High-order objectives – seek to support through your initiative, I am not responsible but support 2Customer selection and focusing Unique objectives Unique value proposition Unique barriers to success 3Strategy selection (access, engage, customize, connect, collaboration) 4Concept generation 5Defining impact
Challenges of customer networks
Enabling the network inside – network strategies should be used by the employees Adding new skills and replacing old habits – business should acquire skills that are necessary in digital age Bridging silos – the firm should anticipate that rivalries may arise due to clashing objectives of departments and confusion about leadership (who is in charge for media accounts)
Competition – build platforms not just products
Competition within defined industries – completion across fluid industries Clear distinction between partners and rivals – blurred distinction between partners and rivals Competition is a zero-sum game – competitors cooperate in key areas Key assets are held inside the firm – key assets reside outside networks Products with unique features and benefits – platforms with partners exchange value A few dominant competitors per category – winners take all due to network effects
Shifting landscape of competition
Co-opetition – from zero-sum win to work together for common benefit Fluid industries and asymmetric competitors – today boundaries of industries are less static Disintermediation and intermediation Disintermediation – the removal of an intermediary or middleman from a series of business transactions
Organizational challenges of competition and platforms
Shifting roles midstream – reshuffling the roles and relationships of a company value train can be difficult for a firm that has a long standing business model Warfare mentality – cooperating with rivals and competing with partners can pose a cultural challenge – leaders have to look at competition as more than a zero-sum contest Openness – letting go of some of the value creation process
Data – turn data into assets
Data is expensive to generate in firm – data is continuously generated everywhere Challenge of data is storing and managing it – challenge of data is turning it into valuable information Firms make use only of structured data – unstructured data more in use Data is managed in operational silos – value of data is in connecting across silos Data is a tool for optimizing process – data is a key intangible asset for value creation
Impact of big data
Trend 1 – big data is really unstructured data – information doesn’t fit easily into neat norms Sources of big unstructured data Social media Location data Embedded sensors Trend 2 – new tools to wrestle unstructured data – new technologies Trend 3 – big data on tap from cloud – due to cloud computing – firms don’t need to structure their data
Source of data
Customer value data exchange Lead user participation Supply chain partners Public data sets Purchase or exchange agreements
The data value generation
Area of impact and key performance indicators Value template selection Concept generation Data audit Execution plan
Organizational challenges of data
Embedding data skill set Bridging silos Sharing data with partners Cybersecurity, privacy and consumer attitudes
Innovation – innovation through rapid experimentation
Decision made based on intuition and seniority – decision made on testing and validity Testing ideas is expensive slow and difficult – testing ideas is cheap fast and easy Experiments conducted frequently by experts – experiments conducted constantly by everyone Challenge of innovation is to find the right solution – to solve the right problem Failure avoided at all cost – failures are learned from, early and cheaply Focus is on the finished product – focus is on minimum variable prototypes and…
Convergent experimental method
Define the question and its variables Question statement Independent and dependent variables Pick your testers Randomize your test and control Validate your sample Test and analyze Decide Share learning
Divergent experimental method
Define the problem Set limits Time limit Money limit Scope limit Pick your people Observe Generate more than one solution Build an mvp Field test Decide Scale up Share learning
Organizational challenges of innovation
Building a test and learn culture Leading without deciding Involving everyone Planning to fail and celebrate it Incremental innovation efforts Loss of organizational leaning Throwing good money after bad
Value – adapt your value proposition
Value proposition defined by industry – value proposition defined by changing customer needs Execute your current value proposition – uncover the next opportunity for customer value Optimate your business model as long as possible – evolve before you must to stay ahead of curve Judge the change by how it impacts your current business – how it could create your next business Market success allows for complacency – only the paranoid survive
Five concepts of market value
Product – problem – marketing myopia – focus on line of product not on customer needs Customers Use case – context within which customer utilizes or buys a product or service Job to be done – focus is not just on the context in which a customer is using a product but also the customer’s purpose for using it Value proposition – benefits received by customer from a company’s offering
Value proposition roadmap
Identify key customer types by value received Define current value for each customer Identify emerging threats New technologies Changing customer needs New competitors and substitutes Access the strength of current value elements Generate new potential value elements Synthesize a new forward-looking value proposition
Organizational challenges of adapting a value proposition
Dedicating leadership – find someone capable of be in charge of adopting value proposition in the firm Allocating talent and treasure – allocate key human and financial resources away from existing areas of business into new, unproven ventures Avoiding myopia – take customers point of view rather than our own
Components of disruption
Existing industry Offers far greater value to the customer Cannot compete with directly
Three variables in business model disruption theory
Customer trajectory – which consumer will provide the initial basis for the challengers market entry? Disruptive scope – how much of the market are likely to wind up switching to the disrupter one it is well established Factors that determine scope of disruption Product use cases Customer segments Network effects Multiple incumbents – disruptive model can disrupt multiple incumbents
Customer trajectory – which consumer will provide the initial basis for the challengers market entry?
Outside in – disrupter starts by selling to buyers that are not currently served by the incumbent Over time the disrupter works its way in until it starts to steal customers directly from the incumbents own market Inside – out – the disrupter start by selling to some subsegment of the incumbent s current customers