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Summary Digital Innovation / B-cluster
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Summary of Digital Innovation including summary chapter 1 of Digital Marketing Fundamentals and relevant articles.
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BUSINESS MODEL INNOVATIONCreate a shared language around business models and strategy
The digital revolution has changed how business is perceived and how it is performed. In today’s day and
age, every aspect of business such as operation and management is run using modern technology. Such a
digital transformation has changed every industry and revolutionized the way of catering the customers.
This complete overhaul of business and reimagining with the reinvention of business operation is affected
by the advent of mobile, cloud, social, and Big Data analytics.
OBJECTIVE ONE: Identify the role of business models in a changing economy
Against the background of trends and developments.
A company’s business model is a system of interconnected and interdependent activities that
determines the way the company does business with its customers, partners and vendors.
➔ It is a bundle of specific activities conducted to satisfy the perceived needs of the market, along with
the specification of which parties conduct which activities and how these activities are lined to each
other.
OBJECTIVE TWO: Understand how the economy is changing and link value proposition
Understand how the economy and society is changing and how to use this as input for value proposition.
How to innovate in business model design
Three design elements that characterize a company’s business model/Business model innovation can occur
in the following ways:
➔ By adding novel activities. We refer to this form of businesses model innovation as new activity
system content.
➔ By linking activities in novel ways. We refer to this form of business model innovation as new
activity system structure.
➔ By changing one or more parties that perform any of the activities: governance.
Content, structure and governance are the three design elements that characterize a company’s business
model.
Four major interlinked value drivers of business models:
1. Novelty captures the degree of business model innovation that is embodied by the activity system.
2. Lock-in refers to those business model activities for business model participants to stay and
transact within the activity system.
3. Complementarities refer to the value-enhancing effect of the interdependencies among business
model activities.
4. Efficiency refers to cost savings through the interconnections of the activity system.
Page | 1
,OBJECTIVE THREE: Describe The Five Business Model Patterns
Weekly notes week 1. Book chapters.
Business model patterns describe the similarities of various business models. We’ll discuss the
following five business model patterns.
1) Unbundling suggests that there are three fundamentally different types of businesses: customer
relationship businesses, product innovation businesses, and infrastructure businesses. These three
types may co-exist within a single corporation, but ideally they are unbundled into separate entities
in order to avoid conflicts or undesirable trade-offs.
2) The long tail business models are about selling less of more. They focus on offering a large
number of niche products, each of which sells relatively infrequently. These models require low
inventory costs and strong platforms to make niche content readily available to interested
buyers.
➢ Aggregate sales of niche items can be as lucrative as the traditional model whereby a
small number of bestsellers account for most revenues.
3) Multi-sided platforms bring two or more distinct but interdependent groups of customers
together. This platform creates value by facilitating interactions between the different groups.
➢ a multi-sided platform grows in value to the extent that it attracts more users, a phenomenon
known as the network effect.
➢ Multi sided platforms are of value to one group of customers only if the other groups of
customers are also present.
4) FREE refers to a model where at least one substantial customer segment is able to continuously
benefit from a free-of-charge offer.
➢ Different patterns make the free offer possible.
i. Multi-sided: free offer based on multi-sided platforms (advertising-based).
ii. Freemium: free basic services with optional premium service.
iii. Bait & Hook: a free initial offer lures customers into repeat purchases.
5) Open business models can be used by companies to create and capture value by systematically
collaborating with outside partners.
➢ Outside-in: exploiting external ideas within the firm.
➢ Inside-out: providing external parties with ideas or assets lying idle within the firm.
Page | 2
,DISRUPTIVE TECHNOLOGIES
The relentless parade of new technologies is unfolding on many fronts. Almost every advance is billed as a
breakthrough, and the list of “next big things” grows ever longer. Not every emerging technology will alter
the business or social landscape—but some truly do have the potential to disrupt the status quo, alter the
way people live and work, and rearrange value pools. It is therefore critical that business and policy leaders
understand which technologies will matter to them and prepare accordingly.
OBJECTIVE ONE: Identify and assess today’s digital trends and innovations
1. Artificial Intelligence
Artificial Intelligence (AI) is the ability of a computer or a robot controlled by a computer to do tasks
that are usually done by humans because they require human intelligence and discernment.
In computer science AI research is defined as the study of intelligent agents. Which refers to devices that
perceive its environment and takes actions that maximize its chance of successfully achieving its goals.
Therefore, AI can help organisations to improve productivity and lower costs, creating new growth
opportunities. Also know as machine intelligence (MI).
2. Blockchain
Blockchain refers to a type of data structure that enables identifying and tracking transaction digitally and
sharing this information across a distributed network of computers, creating in a sense a distributed trust
network. The distributed ledger technology offered by blockchain provides a transparent and secure means
for tracking the ownership and transfer of assets.
3. Virtual Reality
Virtual reality (VR) refers to computer-generated environments or realities that are designed to
stimulate a person’s physical presence in a specific environment that is designed to feel real. VR makes it
possible to personally become part of the virtual word, instead of experiencing an environment through an
avatar in 3D environments.
The purpose of VR is to allow a person to experience and manipulate the environment as if it were
the real world.
Related technologies in the VR family are:
➢ Augmented reality (AR) is an enhanced version of the real physical world that is achieved
through the use of digital visual elements, sounds or other sensory stimuli and delivered via
technology.
➢ Mixed reality (MR) is a blend of physical and digital worlds unlocking natural and intuitive 3D
human, computers and environmental interactions.
➢ 360 video are recordings that include views from every direction, all shot at the same time, using a
rig of multiple cameras or an omnidirectional camera.
Page | 3
, 4. Big data
Big data refers to (1) the growth in the volume of structural, semi-structured
and unstructured data; (2) the speed at which it is created and collected,
mined; and (3) the scope of how many data points are covered. It often comes
from multiple sources and arrives in multiple formats.
It’s not the size of the data that matters, it’s how you use it.
5. The internet of things (IoT)
The internet of things (IoT) is a computing concept that describes the idea of everyday physical objects
being connected to the internet and being able to identify themselves to other devices. The term is closely
identifies with RFID as the method of communication, although it also may include other sensor
technologies, wireless technologies or QR codes.
6. Robotics
Robotics is the industry related to the engineering, construction and operation of robots. Which is a broad
and diverse field related to many commercial industries and consumer uses. The field of robotics generally
involves looking at how any physical constructed technology system can perform a task or play a role in any
interface or new technology.
OBJECTIVE TWO: Understand the emerging opportunities and threats
Of disruptive technologies on existing and new businesses.
GARTNER – HYPE CYCLE FOR EMERGING TECHNOLOGIES!
Page | 4
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