Chapter 10 - Digital Strategy Flashcards
Digital Strategy
corporate strategy in a digital world
Drivers of the digital transformation
- Moore’s Law
- Metcalfes’s Law
- Law of Diminishing firms
- Law of disruption
Moore’s Law
=> mobile computing, cloud competing
- digital technology gets relentlessly faster, smaller + cheaper
- every 18 months: processing power doubles => costs constant
(accurate for several decades; since 2015 slowing pace of advancements)
Metcalfe’s Law
=> marketplaces, social networks
- communication technologies + networks get more valuable with increasing numbers
- usefulness/ utility of a network = Square of the numbers of users (Observation Robert Metcalf in 1980)
Law of Diminishing firms
=> open source libraries, startup culture, (Digital) Ecosystems
- firms become smaller + part of complicated webs of relationships with business partners
Law of disruption
technology changes exponentially -> organisations change logerithmically => struggle to keep up
Dealing with digital change
1) Incremental change
2) (better) Transformative/ disruptive change
VUCA world
Volatility Uncertainty Complexity Ambiguity => technology as cause + remedy for the VUCA world
Volatility (VUCA)
- speed + magnitude of change unpredictable
- technology amplifies fluctuation in demand
! But also helps to address challenges from shortening of product life cycles trough changes in R+D technology, production etc
Uncertainty
- events+ outcomes unpredictable => history no guide for future
- technological advances -> lead to new business opportunities ! Also destroy existing ones rapidly
Complexity
- multiple interdependent variables -> multi-faced effects
Difficult to analyse + interpret
-technological development -> increased level of data available + opportunities for analyzing + drawing conclusions on data
! But also massively boost complexity
Ambiguity
- several possible and equal valid valuations + interpretations
Which are mutually contradictory - business risk arising from ambiguity -> solved by outsourcing to technological partners
Axions for success in the digital world
- costumer centricity
- agile development
- speed
Customer centricity (Axion f. Success)
- customer first + at the core of the business
- providing positive costumer experience before + after sale => repeat business, enhance customer loyalty + improve business growth
Agile development (Axion f. Success)
- ability to respond + adapt quickly to changes in demand, competition, technology + reputation
- reconfiguring strategy, structure, processes, people + technology toward opportunities that creat/ protect value
Speed (axion f. Success)
- achieving speed trough systematic execution + discipline
- using dynamic practices related to processes +strategy => to maintain sufficient speed
