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?

Rethinking value propositions to address evolving needs Signup and view all the answers

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

Traditional marketing strategies and brand loyalty Signup and view all the answers

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

Stable and predictable markets with strong brands Signup and view all the answers

What characteristic defines the adaptive approach to strategy?

It requires flexibility and a willingness to experiment. Signup and view all the answers

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

Shaping approach Signup and view all the answers

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

Implementing transformation when the firm's survival is at risk 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?

Visionary approach Signup and view all the answers

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

To ensure the company's survival Signup and view all the answers

What is referred to as the success trap?

Success preventing exploration and experimentation Signup and view all the answers

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

Separation of teams to pursue alternative growth Signup and view all the answers

What does ambidexterity in a business context refer to?

Balancing exploitative and explorative innovation activities Signup and view all the answers

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

Failing to implement ideas into profitable ventures Signup and view all the answers

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

Outdated and passive Signup and view all the answers

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

Experimentation Signup and view all the answers

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

Vertical integration Signup and view all the answers

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

Session 5 Signup and view all the answers

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

Adapting strategy with market constraints Signup and view all the answers

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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Description

This session explores various strategic approaches companies can adopt to define their digital strategy in the current landscape. It discusses the classical, adaptive, and visionary approaches and their relevance in different market conditions. Understanding these strategies is crucial for companies aiming to maintain a competitive edge in a rapidly changing digital environment.