Digital Strategy Approaches Session 3

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Questions and Answers

What should companies consider to remain competitive in the digital era?

  • Minimizing changes in their product offerings
  • Developing a static digital interface
  • Adopting traditional marketing strategies
  • Thinking about their digital growth (correct)

What best describes Fujifilm's reaction to digital threats?

  • Reinventing its business model by leveraging new digital business opportunities (correct)
  • Reinventing its business model by producing more conventional films
  • Creating customer loyalty through personalized marketing
  • Focusing entirely on operational excellence for efficiency

Which strategy should be taken if products are under digital threat?

  • Strengthen brand loyalty to mitigate threats
  • Consider replacing existing products with new alternatives (correct)
  • Invest more in current product development
  • Adopt a cautious 'wait and see' approach

What does a company's reinforcement of its current market presence through its business model signify?

<p>Rethinking value propositions to address evolving needs (A)</p> Signup and view all the answers

What can be categorized as 'old sources' of competitive advantage in the digital landscape?

<p>Traditional marketing strategies and brand loyalty (C)</p> Signup and view all the answers

In which type of market is the classical approach to strategy most effective?

<p>Stable and predictable markets with strong brands (A)</p> Signup and view all the answers

What characteristic defines the adaptive approach to strategy?

<p>It requires flexibility and a willingness to experiment. (B)</p> Signup and view all the answers

Which strategy approach is primarily concerned with reshaping an industry through collaborative ecosystems?

<p>Shaping approach (C)</p> Signup and view all the answers

In the context of strategy making, what is a critical element of the survival approach?

<p>Implementing transformation when the firm's survival is at risk (C)</p> Signup and view all the answers

Which of the following strategies is most appropriate for companies looking to exploit new technological opportunities in predictable industries?

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

What is the primary aim of the strategy discussed in the content?

<p>To ensure the company's survival (D)</p> Signup and view all the answers

What is referred to as the success trap?

<p>Success preventing exploration and experimentation (A)</p> Signup and view all the answers

Which of the following strategies is most commonly used to achieve ambidexterity?

<p>Separation of teams to pursue alternative growth (A)</p> Signup and view all the answers

What does ambidexterity in a business context refer to?

<p>Balancing exploitative and explorative innovation activities (C)</p> Signup and view all the answers

What challenge do companies face when they fall into the perpetual search trap?

<p>Failing to implement ideas into profitable ventures (A)</p> Signup and view all the answers

Which of the following does NOT represent a current customer characteristic?

<p>Outdated and passive (C)</p> Signup and view all the answers

What driver of digital transformation allows companies to quickly test and iterate new features?

<p>Experimentation (D)</p> Signup and view all the answers

Which concept refers to integrating various business functions to create a competitive advantage using digital technologies?

<p>Vertical integration (D)</p> Signup and view all the answers

In the context of digital transformation, which session focuses on differentiation strategies within the sharing economy?

<p>Session 5 (D)</p> Signup and view all the answers

Which aspect is crucial for ensuring sustainable digital growth according to digital transformation strategies?

<p>Adapting strategy with market constraints (D)</p> Signup and view all the answers

Flashcards

Digital Threat to Products

When existing products are challenged or replaced by digital technologies.

Ambidexterity Strategy

A strategy that involves simultaneously exploiting existing business models while exploring new ones.

Reinventing Business Model

Fundamental changes to how a company operates, often in response to new technologies or market conditions.

Old Competitive Advantages

Advantages formerly based on traditional methods, now potentially less useful in the digital age.

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Digital Strategy

A strategy for using and integrating digital tools and technologies to develop a competitive advantage.

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Digital Transformation Drivers

Factors that propel businesses to utilize digital technologies for competitive advantage in the digital era.

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Experimentation (Digital Transformation)

"Testing new features quickly and observing results" in the digital space is a vital driver of transformation.

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Digital Strategy Formulation

The process of developing a strategy to leverage digital technologies to achieve specific business goals.

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Customer Involvement in Innovation

Companies recognize customers as active participants in the product innovation process in the digital era.

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Classical Strategy

A strategy approach used in stable markets with strong brands and predictable technology changes.

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Adaptive Strategy

A flexible strategy approach suitable for unpredictable markets with technological disruption. Encourages experimentation and flexibility.

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Visionary Strategy

A strategy for industries where there is a chance to create or recreate an industry or better address customer dissatisfaction through innovation.

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Shaping Strategy

A strategy focus where companies reshape their environment by creating a collective ecosystem of companies to create change.

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Renewal Strategy

A strategy used when the survival of the company is threatened. Requires business transformation to survive.

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Exploitation

Using existing resources and ideas to maximize current performance.

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Exploration

Searching for new ideas and opportunities to keep pace with change and uncertain future.

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Success Trap

A situation where current success prevents a company from adapting to change and exploring new opportunities.

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Separation (Ambidexterity)

Creating a dedicated team or separate business unit to pursue new ventures while the existing company focuses on its usual operations.

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Study Notes

Session 3: Strategy Approaches and Ambidexterity Strategy

  • The session focuses on how companies should define their digital strategy in today's digital era.
  • To remain competitive, companies need to understand and respond to their digital growth.
  • There are multiple strategic approaches companies can take depending on the constraints of their environment.
  • There are new rules of the game in the digital era, requiring new approaches to competitive advantage with digital technologies.

Different Strategy Approaches

  • Classical Approach (Be Big): Used for predictable markets with strong brands, high regulation, and limited technological change. Usually applied in well-established industries. Example: Coca-Cola.
  • Adaptive Approach (Be Flexible): Used in unpredictable markets where technological disruption is high. Requires flexibility and a focus on experimentation. Example: Zara.
  • Visionary Approach (Be First): Used to create or recreate industries. Adapts to technological change to reshape industries or answer customer dissatisfaction. Example: IKEA.
  • Shaping Approach: Used when the environment is unpredictable to reshape the industry through collective action and ecosystem creation. Example: Facebook.
  • Survival Approach: Used when the company is under threat. Focuses on the firm's survival to restructure and reallocate resources. Example: American Express.

Ambidexterity Strategy

  • Ambidexterity involves balancing exploitation (using existing resources) and exploration (seeking new opportunities).
  • Current success can hinder the exploration of new ideas, creating a "success trap." Example: Nokia.
  • Perpetual search trap happens when companies continually explore ideas but fail to monetize them. Example: Xerox.
  • Companies need to balance exploitation and exploration to remain competitive.

Achieving Ambidexterity

  • Integration: Switching (top-down) or self-organizing.
  • Separation: Creating a separate business unit (BU).
  • Ecosystem: Acquisitions, partnerships, or incubators.

Business Intelligence and Analytics (BI & A)

  • BI & A tools aid faster responses to external threats and opportunities.
  • BI & A help improve knowledge acquisition and decision-making.
  • BI & A is positively linked to successful ambidextrous strategies.

Resource Allocation

  • Balancing exploitation and exploration resources is vital for ambidexterity.
  • Resource allocation (including financial and human capital) needs to adapt and adjust based on the environment's evolution.

Case Studies

  • Case studies, such as Ford, Lego, and BBVA, are presented to illustrate the application of these concepts.

Course Schedule

  • The course schedule for the mentioned topics is included.

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Session 3: Strategy Approaches and Ambidexterity Strategy PDF

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