Summary of The Digital Transformation Playbook _Rethink your business for the digital age _ CH1-CH6
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Course
Digital Business and Transformation (EBB139A05)
Institution
Rijksuniversiteit Groningen (RuG)
Book
The Digital Transformation Playbook
This is a compact and complete summary of the literature from the book The Digital Transformation Playbook - Rethink your business for the digital age of Chapter 1, 2, 3, 4, 5 & 6. This is the material needed for the exam of Digital Business and Transformation.
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Digital Business and Transformation (EBB139A05)
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CH1 - The five domains of digital transformation (customer - competition - data - innovation - value)
5 domains of strategy that digital is changing
- Digital technologies change how we connect and create value with our customers. They transform
how we need to think about competition (more competition with companies outside our industry,
who have more digital offerings). They transform the way businesses innovate. Digital technologies
force us to think differently about how we understand and create value for the customer.
- Andy Grove: ‘Only the paranoid survive in the digital age’ → constantly pushing the envelope to find
our next source of customer value is now an imperative.
- see - see - div → customer - competition - data - innovation - value
Customers
- Traditionally, customers were seen as ‘aggregate’ actors to be marketed to and persuaded to buy. In
the digital age, we are moving to a world best described by customer networks.
- Key concepts: reinvented marketing funnel - path to purchase - core behavior of customer networks
Competition
- How businesses compete and cooperate with other firms.
- Today we have fluid industry boundaries. The net result of recent changes is a shift in locus of
competition. It is increasingly a jockeying for influence between firms with very different business
models, each seeking to gain more leverage in serving the ultimate customer.
- Key concepts: platform business models - network effects - intermediation - competitive value train
Data
- How businesses produce, manage, and utilize information. Traditionally produced through planned
measurements, mainly for evaluating, forecasting and decision making. Today, data is generated in
crazy quantities from every interaction, or process inside or outside the business.
- Key concepts: templates of data value - drivers of BD - data-driven decision making
Innovation
- Process by which new ideas are developed, tested and brought to the market by businesses.
- Traditionally it was managed with a singular focus on the finished product, based on analysis and
intuition of managers. Today, DT approaches innovation based on continuous learning through rapid
experimentation. Focus on minimal viable prototypes that maximize learning while minimizing cost.
- Key concepts: divergent / convergent experimentation - minimum viable prototype - scaling up
Value
- Traditionally, this was fairly constant. Now, relying on an unchanging value proposition is inviting
challenge and eventual disruption by new competitors.
- Key concepts: market value - paths out of a declining market - steps to value prop evolution
blz 7 voor overzicht in een tabel
Digital transformation playbook: set of the 5 strategic themes
Today, creating an effective customer strategy requires that you understand such key concepts as customers
s strategic assets, the reinvented marketing funnel, the digital path to purchase, and the 5 core behaviors or
customer networks (accessing, engaging, customizing, connecting and collaborating)
, Developing a good strategy for this age requires that you understand: platform business models, direct and
indirect network effects, co-opetition between firms, the dynamics of intermediation and disintermediation,
and competitive value trains.
Innovating in the digital age requires that you have a firm understanding of convergent experiments (valid
samples, test groups, and controls) and divergent experiments (designed for open-ended inquiry).
To proactively adapt your value proposition, you needs to understand these elements: different key concepts
of market value, the 3 possible paths out of a declining market position, the essential steps to effectively
analyze your existing value proposition, identify its emerging threats and opportunities, nd synthesize an
effective next step in its evolution.
9 tools for digital transformation: customer network strategy - platform business model mp - competitive
value train - data value - convergent experimental method - divergent experimental method - value
proposition roadmap - disruptive business model mp - disruptive response planner
Strategic innovation tools: tools for generating a new solution to a defined challenge by exploring different
facets of a strategic phenomenon.
Strategy maps: visual tools that can be used to analyze an existing business model or strategy to assess and
explore a new one.
Strategic design tools: tools with criteria for evaluating and declining among a set of generic options
available for a key strategic decision.
Strategic planning tools: step-by-step planning processes or methods that can be used to develop a strategic
plan tailored to a specific business context or challenge.
CH2 - Harness Customer Networks
Change in strategic assumptions from the analog to the digital age
From: → To
- Customers as mass market Customers as dynamic network
- Communications are broadcast to customers Communications are two-way
- Firm is the key influencer Customers are they key influencer
- Marketing to persuade purchase Marketing to inspire purchase / loyalty
- One-way value flows Reciprocal value flows
- Economies of (firm) scale Economies of customer value
Businesses need to understand 5 core behaviors: access - engage - customize - connect - collaborate
Marketing funnel: a framework for understanding
how customer networks hve such great impact on
business relationships to customers. Based on
hierarchy of effects. It maps out progression of a
potential customer from awareness to
consideration to preference to action.
Rethinking the marketing funnel
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