Digital Business Strategy Session 1
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What is one of the primary focuses when rethinking strategy in the digital era?

  • Focusing solely on products
  • Reducing operational costs
  • Increasing manual processes
  • Creating a competitive advantage (correct)

    • Which of the following is a key component of digital transformation discussed in the session?

  • Investing in digital technologies (correct)
  • Maintaining traditional management practices
  • Minimizing customer engagement
  • Eliminating competition analysis

    • What are businesses required to adapt to in their strategy formulation according to the new digital environment?

  • Regulatory constraints only
  • Static market conditions
  • The constraints of the environment (correct)
  • Customer preferences that remain unchanged

    • Which aspect is NOT mentioned as a driver of digital transformation in the strategic framework?

    <p>Financial penalties</p> Signup and view all the answers

    What role does digital leadership play in strategy during the digital transformation process?

    <p>Transforming the organization</p> Signup and view all the answers

    How has the role of customers changed in the digital era?

    <p>Customers are more connected and can influence the brand.</p> Signup and view all the answers

    What does the term 'reciprocal value flows' imply in the new customer dynamics?

    <p>Both the company and customers contribute to the creation of value.</p> Signup and view all the answers

    What is a key characteristic of customers as dynamic networks?

    <p>They can actively participate in the innovation process.</p> Signup and view all the answers

    What shift in marketing approach is indicated by the concept of 'marketing to inspire purchase'?

    <p>Emphasize two-way communication to build loyalty and advocacy.</p> Signup and view all the answers

    In the context of digital transformation, what does 'economics of customer value' prioritize?

    <p>Creating value based on customer feedback and needs.</p> Signup and view all the answers

    What primarily characterizes the current landscape of competition?

    <p>Constant innovation and disruption by tech entrepreneurs</p> Signup and view all the answers

    Which statement accurately describes the changes in competitive advantages?

    <p>Old sources of competitive advantage are steadily being replaced.</p> Signup and view all the answers

    What is 'coopetition' in the context of modern business?

    <p>Partnerships between competitors to enhance customer value.</p> Signup and view all the answers

    Which of the following reflects a new capability enabled by technology?

    <p>The ability to quickly innovate and create new business value.</p> Signup and view all the answers

    What role do digital giants play in the competitive environment?

    <p>They leverage their scale and data capabilities to disrupt industries.</p> Signup and view all the answers

    What is a significant change in the perception of data from the past to the present?

    <p>Data is continuously generated everywhere.</p> Signup and view all the answers

    Which of the following describes the current challenge associated with data management?

    <p>Leveraging data to create actionable insights.</p> Signup and view all the answers

    Which statement correctly reflects the strategic use of data in modern businesses?

    <p>The value of data lies in connecting it across organizational silos.</p> Signup and view all the answers

    What use case is NOT mentioned regarding Lufthansa's application of big data?

    <p>Enhancing operational security systems.</p> Signup and view all the answers

    What was Lufthansa's previous approach to data before adopting big data systems?

    <p>Storing only structured, transaction-oriented data.</p> Signup and view all the answers

    What is a significant new consideration in strategy thinking required by the digital era?

    <p>Customer dynamics as dynamic networks</p> Signup and view all the answers

    Which aspect is essential when creating a competitive advantage through digital technologies?

    <p>Adapting strategies to current market demands</p> Signup and view all the answers

    What does the transformation of business processes with digital technologies primarily involve?

    <p>Integrating digital capabilities into existing frameworks</p> Signup and view all the answers

    How should organizations approach the management of their ecosystems in the era of digital transformation?

    <p>By cultivating partnerships and collaborations</p> Signup and view all the answers

    What characterizes the new rules of competition in the digital landscape?

    <p>Emphasis on collaborative competition approaches</p> Signup and view all the answers

    What is a defining change in customer dynamics in the digital era?

    <p>Customers operate as dynamic networks rather than mass markets.</p> Signup and view all the answers

    Which statement best captures the shift in marketing strategies for businesses in the digital age?

    <p>Marketing is focused on inspiring purchase, loyalty, and advocacy.</p> Signup and view all the answers

    How has the flow of value changed in the context of digital transformation?

    <p>There are now reciprocal value flows between firms and customers.</p> Signup and view all the answers

    Which of the following reflects the change in competitive advantages in the digital landscape?

    <p>Competitive advantages are increasingly based on customer value rather than firm capabilities.</p> Signup and view all the answers

    What transformation is observed regarding the role of communication with customers in the digital era?

    <p>Firms leverage two-way communication for engagement.</p> Signup and view all the answers

    What is a significant consequence of the scalability of digital platforms for competition?

    <p>It allows companies to disintegrate and specialize more easily.</p> Signup and view all the answers

    Which statement accurately reflects a current trend in competitive strategies among companies?

    <p>There is a growing shift from competition between products to competition between platforms.</p> Signup and view all the answers

    How has the advent of digital technology affected the traditional sources of competitive advantage?

    <p>They are diminishing in relevance and transforming competitive landscapes.</p> Signup and view all the answers

    What characterizes the concept of 'coopetition' in modern industries?

    <p>Competitors collaborate to create shared value while maintaining distinct identities.</p> Signup and view all the answers

    What is one of the new capabilities that digital technology brings to businesses?

    <p>Transforming data into a strategic asset for innovation.</p> Signup and view all the answers

    Which strategy is primarily focused on enhancing customer interaction through the use of technology?

    <p>Enhancing Customer Experience</p> Signup and view all the answers

    What is a characteristic of operational excellence in the context of a digital strategy?

    <p>Addressing inefficiencies through technology</p> Signup and view all the answers

    Which aspect of digital transformation involves proactively substituting services to avoid disruption?

    <p>Reinventing Business Model</p> Signup and view all the answers

    Which of the following descriptions aligns with a competitive advantage created by Burberry?

    <p>Creating a cohesive customer experience across platforms</p> Signup and view all the answers

    In the context of competing digitally, what could be a disadvantage of prioritizing operational excellence?

    <p>Failure to identify new market opportunities</p> Signup and view all the answers

    Which factor is critical for companies aiming to create a competitive advantage through AI?

    <p>Optimizing processes and enhancing customer experience through innovative applications</p> Signup and view all the answers

    What is a common barrier companies face when adopting AI technologies?

    <p>Overcoming resistance to change among employees</p> Signup and view all the answers

    In formulating a digital strategy, what is one of the initial steps companies typically undertake?

    <p>Developing a clear understanding of existing capabilities and gaps</p> Signup and view all the answers

    Which outcome is associated with leveraging digital technologies in business operations?

    <p>Enhanced ability for collaboration and innovation</p> Signup and view all the answers

    What defines the new business models adopted by companies during digital transformation?

    <p>A focus on continuous evolution and customer-centric solutions</p> Signup and view all the answers

    Which aspect describes the shift in Fujifilm's business model?

    <p>Diversification into cosmetics from film products</p> Signup and view all the answers

    What technological advancement has Volvo implemented to enhance customer interaction?

    <p>Push-to-talk functionality for direct communication</p> Signup and view all the answers

    Which challenge is more pronounced for traditional banks due to new FinTech entrants?

    <p>Faster innovation processes creating competitive pressure</p> Signup and view all the answers

    What primary driver is crucial for analyzing the macro-level effects on the banking industry?

    <p>Customer behaviors and competition dynamics</p> Signup and view all the answers

    Which statement accurately reflects the evolving value proposition for banks?

    <p>Integrates new technologies to enhance customer convenience and services</p> Signup and view all the answers

    What strategic choice is emphasized for companies to adapt in the face of digital transformation?

    <p>Taking advantage of digital technologies</p> Signup and view all the answers

    Which statement best describes how companies aim to enhance customer experiences during digital transformation?

    <p>By enriching their offerings with digital content</p> Signup and view all the answers

    What is one way Mittelbayrische seeks to remain competitive in the digital era?

    <p>By digitally enriching its TV portfolio</p> Signup and view all the answers

    How do companies typically assess the extent of their digital transformation ambitions?

    <p>By examining the radical differences in their future plans</p> Signup and view all the answers

    Which approach does Ravensburger primarily adopt as part of its digital transformation?

    <p>Creating new business models in areas like online gaming and ebooks</p> Signup and view all the answers

    What defines a characteristic of current customers?

    <p>They can participate in co-creating value.</p> Signup and view all the answers

    Which of the following best illustrates the driver of digital transformation that refers to quick testing of new features?

    <p>Experimentation</p> Signup and view all the answers

    Which strategy approach focuses on adapting to environmental constraints while using digital technologies?

    <p>Sustainable competitive advantage</p> Signup and view all the answers

    In the context of digital transformation, what is considered a significant aspect of competition?

    <p>Elevation of digital capabilities</p> Signup and view all the answers

    Which option represents a misconception regarding the role of strategy in digital disruption?

    <p>Strategy is irrelevant in digital contexts.</p> Signup and view all the answers

    In which approach is a company most likely to operate when facing a highly dynamic and unpredictable business environment?

    <p>Adaptive approach</p> Signup and view all the answers

    What is the primary focus of the shaping approach in strategic management?

    <p>To reshape the industry through collaboration</p> Signup and view all the answers

    Which strategy is characterized by leaders seeking to create or reshape an industry due to emerging technological opportunities?

    <p>Visionary approach</p> Signup and view all the answers

    When is the renewal strategy most necessary for a company?

    <p>When the survival of the firm is under threat</p> Signup and view all the answers

    Which of the following strategies would be least effective in a stable and regulated market with little technological change?

    <p>Adaptive approach</p> Signup and view all the answers

    What best describes the strategic approach a company should take when its products are facing digital threats?

    <p>Proactively consider altering or replacing the affected products</p> Signup and view all the answers

    Which term refers to a company's ability to balance reinvention while maintaining its competitiveness in its existing market?

    <p>Ambidexterity</p> Signup and view all the answers

    Which of the following strategies can help a company succeed in fostering digital growth?

    <p>Understanding and adapting to new competitive dynamics</p> Signup and view all the answers

    Fujifilm transitioned successfully after the decline of its traditional film business. Which of the following strategies did it primarily pursue?

    <p>Diversifying into other sectors by utilizing core competencies</p> Signup and view all the answers

    In the context of digital transformation, which of the following approaches is least effective for addressing emerging competitive pressures?

    <p>Prioritizing traditional methods of product distribution</p> Signup and view all the answers

    What is the primary focus of the ambidexterity strategy in companies?

    <p>To balance between exploitative and explorative innovation activities</p> Signup and view all the answers

    Which trap is characterized by a company's current success hindering its ability to innovate?

    <p>Success trap</p> Signup and view all the answers

    What is the most common approach for companies to achieve ambidexterity?

    <p>Creation of a separate business unit</p> Signup and view all the answers

    Which strategy is necessary for companies to ensure sustainability in uncertain futures?

    <p>Balancing both exploitation of old ideas and exploration of new ones</p> Signup and view all the answers

    What does perpetual search trap refer to in business strategy?

    <p>Endless search for new ideas without effective implementation or monetization</p> Signup and view all the answers

    Which of the following is not commonly associated with the characteristics of modern customers?

    <p>More loyal</p> Signup and view all the answers

    Which driver of digital transformation is exemplified by companies quickly testing new features?

    <p>Experimentation</p> Signup and view all the answers

    What is one of the strategic outcomes companies aim to achieve through digital technologies?

    <p>Creating competitive advantage</p> Signup and view all the answers

    Which statement best reflects a significant change in the perception of competition due to digital transformation?

    <p>Competition increasingly relies on digital platforms.</p> Signup and view all the answers

    Which aspect of strategic formulation is particularly important in the context of digital growth?

    <p>Adapting strategies to digital constraints</p> Signup and view all the answers

    Study Notes

    Session 1: Rethinking Strategy in the Digital Era

    • Course Coordinator: Nabila Boukef, Ph.D., Associate Professor in Information Systems and Digital Transformation, SKEMA Business School
    • Course Focus: Two-year MSc program in Digital Business
    • Session Goal: To analyze the new rules of the digital era that necessitate a new approach to strategy thinking.
    • Key Question: What has changed so far that requires new ways of thinking about strategy?

    Course Schedule

    • Session 1: Rethinking strategy in the digital era
    • Session 2: Digital strategy formulation
    • Session 3: Strategy approaches and ambidexterity strategy
    • Session 4: Digital platform strategies
    • Session 5: Differentiation strategies and competition in the sharing economy
    • Session 6: Digital strategy and business process transformation
    • Session 7: Building digital capabilities and creating digital leadership
    • Session 8: Digital strategy execution in practice: Fostering innovation in the digital era

    Drivers/Domains of Digital Transformation

    • Analysis of New Rules: The new rules of the game, opportunities, and possibilities in the digital age.
    • Competitive Advantage: Creating and leveraging competitive advantages from digital technologies.
    • Strategy Adaptation: Adapting strategy to keep pace with changing digital environments.
    • Digital Growth: Achieving sustainable and competitive growth using digital technologies.
    • Process Transformation: Transforming businesses via digital technologies.
    • Digital Capabilities: Investing in digital technologies and building digital expertise.
    • Digital Leadership: Embracing digital leadership within the organization.
    • Ecosystem Management: Managing the ecosystem to ensure sustainable growth and value creation.

    Outline for the Session

    • New Rules of the Game: Analyzing new customer behaviors, competition, and innovative ideas from the new tech capabilities.
    • Capabilities enabled by Technology: Discussing new data capabilities, strategic data assets, and new opportunities.
    • Conclusion: Overview and summarization of concepts.

    Five Domains of Digital Transformation

    • Customers: Shifting from passive to dynamic customer networks.
    • Competition: Different players with different strategies (digital giants, industry incumbents, tech entrepreneurs). Old sources of competitive advantage are disappearing.
    • Data: New data capabilities like increased storage, processing power, and faster communication.
    • Innovation: Using digital technologies to speed up the innovation process. Adaptability and agility.
    • Value: Adapting value propositions to remain competitive and relevant in the evolving market.

    1. Customers: From Passive to Dynamic Networks

    • Less Loyal: Customers are less loyal to brands.
    • Connected and Active: Customers are engaging with companies and interacting with each other across platforms.
    • Innovation Process: Companies can involve customers in the innovation process.
    • Co-created Brand: Brand is increasingly co-created by customers.
    • Engagement at Dell: Focusing on directly hearing from customers, listening, learning, and then improving and innovating what customers truly want.

    Reconsidering Strategic Assumptions about Customers

    • From (Traditional): Customers are mass market, communications are one-way, firms are key influencers, marketing persuades, one-way value flows, and economics are based on firm scale.
    • To (Digital): Customers are dynamic networks, communications are two-way, customers are key influencers, marketing inspires, and reciprocal value flows with economics centered on customer value.

    1.2. Competition

    • Different Strategies: Diverse players, including digital giants, industry incumbents, and tech entrepreneurs.
    • Disappearing Advantages: Traditional sources of competitive advantage are less sustainable in the digital era. Scale and vertical integration are becoming less impactful.
    • Change in Competition: Companies are partnering with competitors (coopetition), facing competition from diverse players in different sectors, and shifting from products to platforms as the basis for competition.

    Old Sources of Competitive Advantage

    • Scale: Scaling is easy in the current digital environment and is less costly.
    • Transactional Costs: Decreasing transaction costs in segments like financial services.
    • Vertical Integration: Digital technology enables companies to disintegrate and specialize, thus allowing for new entrants to gain competitive advantage.

    Change in Competition

    • Partnering with Competitors: Companies collaborate to create value for customers. (e.g., Volkswagen, BMW, and Daimler developing mapping technology).
    • Different Business Models: Different sectors and business models pose a challenge for existing industries (e.g. Amazon in retail and Uber in transportation).
    • Products to Platforms: Shift from competing based on products to competing on the platforms that support those products (further details in session 4).

    2. New Capabilities Enabled by Technology

    • New Data Capabilities: Increased storage (cloud computing), processing power, and faster communication enable improved use of data.
    • Data as Strategic Asset: Data has evolved into a high-value asset for innovation and strategic decision-making, replacing operational focus. (e.g., Stitch Fix – leveraging data to customize customer experience and Lufthansa using big data for operations).
    • Transforming Opportunities: Using digital technologies for new value creation. Innovation is facilitated quickly and efficiently.

    2.1 New Data Capabilities

    • Increased Storage: Cloud computing allows for increased and easier storage.
    • Increased Processing: More powerful processing capabilities can handle large data sets.
    • Faster Communication: Rapid data transfer enables improved response times and efficiency.

    Reconsidering Strategic Assumptions about Data

    • From (Traditional): Data is expensive to generate, focused on operations, use of structured data, and silos.
    • To (Digital): Data is continuously generated everywhere, information extraction tools are focused on value creation, unstructured data use is increasing, and data is shared across the organization.

    2.2 Data as a Strategic Asset

    • Operational Focus: Data was historically used primarily for operational purposes.
    • Customer Value Innovation: Data is now used to create value for customers (e.g., Stitch Fix).
    • Strategic Decision-Making: Improving decision-making via data analysis.
    • Optimization and Risk Management: Optimizing business process and mitigating risks (e.g., Lufthansa).

    2.3 New Opportunities to Transform Business

    • Speeding up Innovation: Digital technologies accelerate the innovation process. (e.g. Facebook experimenting features).
    • New Value Propositions: Evolving the value proposition to match customer needs and market demands (e.g., personal styling service like Stitch Fix).

    Speeding up the Innovation Process

    • Faster Experimentation: Quick testing and real-time feedback loops enable faster experimentation and learning.
    • Exploring Innovative Ideas: Digital capabilities enable exploration of many more ideas.
    • Customer/Employee Engagement: Social media allows customer and employee engagement in the innovation process.
    • Reduced Learning Curves: Enhanced capabilities for rapid learning and adaptation.

    New Value Propositions

    • Dynamic Value: Value propositions are constantly changing due to the evolving market.
    • Innovative Value: Digital technologies lead to new value propositions (e.g., Stitch Fix’s personalized styling).

    Reflect and Apply

    • Analysis and Application: Analyzing the case study of Ford and applying the D. Rogers framework to understand the factors driving their investment in mobility services.

    Takeaways

    • Roger's Framework: The framework is a valuable tool for understanding new opportunities and constraints in the digital environment and for rethinking strategies to remain competitive in the changing market.
    • New Expectations: Companies need to understand new customer expectations and the changing rules of competition.
    • Digital Integration: New opportunities arising from digital technologies should be adopted as part of the firm's ongoing strategy.

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    Related Documents

    Session 3: Strategy Approaches and Ambidexterity Strategy PDF
    Session 1: Rethinking Strategy in the Digital Era PDF
    Session 2: Digital Strategy Formulation - SKEMA Business School

    Description

    In this first session of the Digital Business course, we will explore the fundamental changes in strategic thinking required in the digital era. Led by Dr. Nabila Boukef, this session will analyze the new rules that shape modern strategy formulation and execution. Join us in dissecting what necessitates these shifts in thought.

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