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Complete summary of Digital Business and Transformation 2023/2024 including the book, lectures, and articles

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Complete summary of Digital Business and Transformation 2023/2024 including the book, lectures, and articles. It is divided in seven weeks and it contains the material discussed in that specific week. Rogers, D.L. (2016). The Digital Transformation Playbook: Rethink Your Business for the Digital A...

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Geupload op 15 juni 2024
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Geschreven in 2023/2024
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competition
customers
data
innovation
value proposition
digital business and innovation

Volledige samenvatting digital business and transformation

Week 1: The five domains of digital transformation

What is digital transformation?
A change in how a firm employs digital technologies, to develop a new digital business
model that helps create and appreciate more value in the firm.

The five domains of digital transformation are:
customers, competition, data, innovation, and value.

Customers: harness customer networks
- Customers as mass market  customers as dynamic networks
- Communications are broadcast to customers  communications are two-way
- Firm is key influencer  customers are the key influencer
- Marketing to persuade  marketing to inspire purchase, loyalty, advocacy
- One-way value  reciprocal value flows
- Economies of scale  economies of (customer) value

Competition: build platforms, not just products
- Competition within defined industries  industries become more fluid
- Clear distinctions between partners and rivals  blurred distinctions
- Competition is a zero-sum game  competitors cooperate in key areas
- Key assets are held inside the firm  key assets reside outside networks
- Products with unique features and benefits  platforms exchange value
- A few dominant competitors per category  winner-takes-all due to network effects

Data: turn data into assets
- Data is expensive to generate in firm  data is continuously generated everywhere
- Challenge of data is storing and managing it  challenge of data is turning into
valuable information
- Firms make use only of structured data  data is a key intangible asset for value
creation, unstructured data more useable and valuable.
- Data is a tool for optimizing processes  data is a tool for value creation. Data fuels
LLM’s but getting it is challenging

Innovation: innovate by rapid experimentation
- Decisions made by intuition and seniority  decisions made by testing and
validating
- Experiments are expensive, slow, difficult  cheap, fast, and easy
- Experiments are conducted infrequently and by experts  experiments are
conducted constantly by everyone
- Find right solution  find right problem
- Failure avoided  failure is learned from

,Value: adapt your value proposition
- Value proposition defined by industry  value proposition defined by changing
customer needs.
- Optimize your business model as long as possible  evolve before you must, to stay
ahead of the curve.
- Judge change by how it impacts your current business  failures are learned from,
early and cheaply
- Market success allows for complacency  only the paranoid survive

Network effects = product or service becomes more valuable when more people use it.
- Direct (same-side): value increases with number of users.
- Indirect (cross-side): two-sided, growth of one side benefits the other side.

Seven principles of experimentation
Learn early, be fast and iterative, fall in love with the problem not the solution, get credible
feedback, measure what matters now, test assumptions, fail smart.

Tools for digital transformation
- Strategic ideation tools: tools for studying various aspects of strategic phenomena in
order to come up with innovative solutions to problems that have been identified.
- Strategy maps: visual tools that can be used to evaluate and explore a new business
model or strategy as well as examining an existing one.
- Strategic decision tools: tools with criteria for assessing and selecting from range of
generic possibilities accessible for a crucial strategic decision.
- Strategic planning tools: step-by-step planning procedures that can be used to create
strategy plan specifically adapted to certain company situation/scenario.

Verhoef et al. (2021)

Flow model for discussion on digital transformation

1.External drivers
 Digital technology: rise of WWW and associated technologies like internet,
smartphone, etc.
 Digital competition: has drastically changed. Digital companies are gaining an
increasing market share.
 Digital customer behavior: more online purchases, apps and mobile devices change
how customers interact with companies.

2. Phases
 Digitization: converting analog information into digital
 Digitalization: how IT/digital technologies can be used to change exising business
processes.
 Digital transformation: profound phase that leads to the development of new
business models. It has significant strategic implications for companies, especially for
established companies.

,3. Strategic imperatives
 Digital resources
o Digital assets: data storage, info networks, enable companies to add value
through personalization and service.
o Digital agility: companies ability to quickly respond to changes in market and
leverage new technologies.
o Digital networking capacity: important to adopt network centric approach
and co-create with partners.
o Big data analysis capacity: ability to collect and analyze large amounts of data
crucial for making decisions.
 Organizational structure
o Separate business units: existing companies often slow, recommend to
develop new and disruptive business models in autonomous business units
separate from headquarters.
o Agile organizational forms: flexible organizational forms enable to quickly
respond to changes.
o Digital functional areas: role IT department from supportive to proactive role
in value creation.
 Digital growth strategies
o Platform growth: scalability and network effects
o Ansoff’s matrix: 4 growth strategies  market penetration, product
development, market development, and diversification
o Horizontal growth: market penetration and market development 
introduce existing product into new market.
o Vertical growth: product development and co-creation efficiently develop
and launch new products
o Platform diversification: combine all approaches into one strategy.
 Metrics and goals
o Measure performance with key performance indicators
o Profitability vs. growth figures.

Dwivedi et al. (2023)

The profound impact of AI on organizations, societies, and individuals, stems from its ability
to reason, learn, and adapt.

Advancements have led to algorithms capable of processing unstructured data, as evidence
by chatbots powered by ChatGPT.

However, ethical considerations and challenges persist necessitating further research and
development to ensure responsible implementation and address fake news and privacy.

, Week 2: Harness customer networks

7 characteristics of the modern customer
- Customers reign supreme: they control what they want
- Customers are always connected: 24/7 to an internet-enabled device
- Customers expect personal interactions: 24/7 to an internet-enabled device
- Customers compare, compare, and compare: through multiple sources and channels
- Customers trust word of mouth: high trust in online suggestions
- Customers think in “I want now”: to get everything right away
- Customers are highly opinionated: to get everything right away

From traditional customers to modern customers
Traditional: Modern:
- Customers as mass market - Customers as dynamic network
- Communications broadcast to customers - Two-way communication
- Firm is key influencer - Customers are key influencer
- Marketing to persuade purchase - Marketing to inspire purchase, loyalty
- One-way value flows - Reciprocal value flows
- Economies of scale - Economies of value

Customer network paradigm = customers are passive and viewed collectively. Consumers
only significant function is to make a purchase or not.
Mass-market model = business continue to play a crucial role in development and marketing
of products and services. But new role that customers play makes connections more
complicated.
Customer network model = customer might be any important group that business relies on
and supports.

Market funnel = psychological model based on succession of physical states and has long
lasting value.

Advocacy = customers who advocate the product to others in their network and which feeds
back to the top of the funnel.

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