Podcast
Questions and Answers
Which characteristic is NOT typically associated with current customers?
Which characteristic is NOT typically associated with current customers?
Which of the following best describes a driver of digital transformation that involves testing new features quickly?
Which of the following best describes a driver of digital transformation that involves testing new features quickly?
In the context of digital business strategies, which session focuses on 'Creating a competitive advantage with digital technologies'?
In the context of digital business strategies, which session focuses on 'Creating a competitive advantage with digital technologies'?
What is a key question addressed regarding the impact of digital disruption?
What is a key question addressed regarding the impact of digital disruption?
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Which session focuses on 'Fostering innovation in the digital era'?
Which session focuses on 'Fostering innovation in the digital era'?
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What is a primary approach for companies to remain competitive in the digital age?
What is a primary approach for companies to remain competitive in the digital age?
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What step did Fujifilm take in response to the threat of digital photography?
What step did Fujifilm take in response to the threat of digital photography?
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What does ambidexterity in a business model refer to?
What does ambidexterity in a business model refer to?
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What is a common strategy when products are under digital threat?
What is a common strategy when products are under digital threat?
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Which statement best describes a source of competitive advantage in the digital era?
Which statement best describes a source of competitive advantage in the digital era?
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Flashcards
Digital Threat
Digital Threat
When a company's traditional products or services are challenged by new digital technologies or business models.
Reinventing Business Model
Reinventing Business Model
A strategy where a company adapts to digital threats by creating new products, services, or ways of doing business.
Competitive Advantage
Competitive Advantage
What allows a company to outperform its competitors in the market.
Ambidexterity Strategy
Ambidexterity Strategy
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Rethinking Value Proposition
Rethinking Value Proposition
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Scale
Scale
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Transactional costs
Transactional costs
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Vertical integration
Vertical integration
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Digital growth
Digital growth
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Digital transformation
Digital transformation
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Study Notes
Session 3: Strategy Approaches and Ambidexterity Strategy
- This session focuses on strategic approaches in the digital age, and the concept of ambidexterity strategy
- Digital transformation requires new strategic approaches (Beyond traditional analysis, planning, and execution)
- Companies need to think about digital growth for remaining competitive
- There are various different ways to create competitive advantages with current digital technologies
- There are different appropriate strategic approaches for various environments, from stable to dynamic and unpredictable
Digital Journey
- Companies should define their digital strategy, given the new rules of the game in the digital era
- To stay competitive, companies need to consider how digital technologies and constraints impact their strategies
- There are diverse ways to create a competitive advantage using digital technologies
- Businesses face new rules of the game; digital technologies challenge traditional approaches
Revise and Discuss (1)
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Case Study: Fujifilm
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Fujifilm's traditional business models became obsolete due to digital photography and smart phones replacing film and cameras
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To combat this, Fujifilm transitioned into new areas like cosmetics and film, while leveraging its existing expertise
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The case study explores various options for adaptation, such as creating customer intimacy, reinventing the business model with digital offerings, focusing on operational excellence, or substituting product lines
Revise and Discuss (2)
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General Case: Dealing with digital threats to products
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Companies facing a digital threat to their products have several options:
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Ignore the threat and invest more in developing their products
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Employ a "wait and see" approach
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Repurpose or replace their products
Revise and Discuss (3)
- General Case: Reinvigorating a company through Reinventing its business model
- Reinventing a business model by strengthening its market presence; for example, re-thinking value propositions and meeting current needs.
- Options for Reinvention include: Rethinking value proposition, ambidexterity, network effect, and learning experience
Revise and Discuss (4)
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Question: What are the classic sources of competitive advantage?
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Answers include:
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Companies with a highly developed scale of operations
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Organizations with the lowest transactional costs
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Companies with fully integrated functional components of the businesses.
Revise and Discuss (5)
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Question: What is not a characteristic of a current customer?
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The answer is not "More loyal" because customers are increasingly connected and involved in innovation, and often co-create brands.
Revise and Discuss (6)
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Question: What is the main driver of companies quickly testing new digital features?
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Answer: Experimentation
Course Schedule
- The course covers broad topics including: digital strategy formulation, strategy approaches, digital platforms strategies, differentiation strategies, digital business processes, digital leadership development, and digital strategy executions.
Questions Addressed During This Session
- Question: Does strategy still matter in the age of digital disruption?
- Question: How to ensure a company's digital growth?
Drivers of Digital Transformation
- Key Concepts (Why, What, How):
- Why: Analyzing the new rules of the game, and opportunities enabled by digital technologies.
- What: Creating a competitive advantage, (customer intimacy/operational excellence/reinventing business models)
- How: Digital capabilities, digital leadership, & transforming business processes, transforming the organization and managing the ecosystem in the process
Different Strategy Approaches
- The traditional strategy approach (analysis, planning, and execution) is not sufficient
- Strategies in the digital world need to adjust to various environments
Strategy in the Digital Age of Disruption
- The extent to which companies can predict the environment and change it affects their strategy choice
- Adaptability is key in responding to dynamic environments
Classical Approach (Be Big)
- This approach works in stable markets with established brands and high regulation.
- Businesses have some predictable markets with few technology changes, and few changes in consumer needs.
Adaptive Approach (Be Flexible)
- A dynamic, flexible approach is recommended when circumstances are unpredictable and technological changes frequent
Visionary Approach (Be First)
- This is suitable for companies creating or recreating industries
- Companies aiming to capitalize on new opportunities or address customer needs should adopt this strategy
Shaping Approach
- Companies that actively re-shape their surrounding ecosystem.
- This is a collaborative strategy with several organizations together in the same industry
Renewal Strategy
- A strategy for when a company is under threat; The need for transformation when a business is under threat
- The strategy is to ensure the survival of the company
Strategy Making Processes
- Summarizes the analysis, planning, and execution aspects of various strategic elements in relation to changing business conditions
Ambidexterity Strategy
- A strategy that balances exploitation (leveraging existing ideas from operations as a competitive advantage) and exploration (seeking new ideas as competitive advantages).
- Maintaining a balance in the use of existing strategies for maintaining competitiveness while exploring new markets or opportunities
- Key to maintaining competitiveness when the market is uncertain
Achieving Ambidexterity Strategy
- This entails determining suitable approaches to ensure a balance between maintaining profitability/operations of existing strategies while simultaneously exploring new markets and opportunities
Digital Growth Strategies
- Integration: Integrating new ideas into existing businesses/approaches
- Separation: Creating separate organizations/teams to explore new ideas
- Ecosystem: Collaborating with other businesses to explore and develop new ideas jointly to create larger opportunities
Separation Approach
- A common approach used to achieve ambidexterity.
- Organizations create separate teams or groups that develop and research alternative methods and products
Switching Approach
- A responsive approach is necessary in dynamic environments
Self Organizing Approach
- This is particularly applicable in the case of smaller, more responsive organizations that rely on agility and rapid action.
Ecosystem Approach
- Companies can partner with others or pursue acquisitions to gain the means to be more receptive and responsive to disruptive, dynamic environment
- Companies use these approaches (acquisitions, partnerships, and incubators) to help source new ideas
BI & A and Ambidexterity
- BI & A helps companies enhance knowledge acquisition and improve decision-making.
- These tools are beneficial for achieving a successful ambidexterity strategy given that they enable better insight into the business, external forces, and future developments
Resource Allocation
- It is crucial to adjust allocation depending on whether the environment is predictable and malleable or dynamic and disruptive.
- The allocation of resources, therefore, has to be made dynamically and fluidly to adapt to external factors and changes
Takeaways
- Companies need to anticipate and react to digital disruption
- Maintaining a balance between exploitation and exploration is critical to growth
- Resources allocation should be flexible to accommodate changes in the market, as the market conditions evolve
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Description
This quiz covers key concepts in digital strategy and ambidexterity from Session 3. Explore how companies adapt their strategic approaches to navigate digital transformation and create competitive advantages. Understand the diverse strategies required for different business environments in the digital age.
