Remodeling Your Enterprise part 1_ Best Response article - Canvas

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REMODELING YOUR ENTERPRISE: STRATEGY “THE BEST RESPONSE TO DIGITAL DISRUPTION”
“THE BEST RESPONSE TO DIGITAL DISRUPTION” ARTICLE IN COURSEPACK
BEST RESPONSE TO DIGITAL What happened with the business of funeral homes?
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BEST RESPONSE TO DIGITAL Global Study on Response to Digitization – Results: 1. Digitization has negative impact on profits for incumbents 2. Bold, at-scale responses that are integrated into overall corporate strategy have the best chances of success 3. Companies should consider three responses
BEST RESPONSE TO DIGITAL 1. Digitization has negative impact on profits for incumbents (2 loops): i. Digital entrants compete with incumbents through disruptive models (e.g., Uber) ii. Beware the Red Queen – what do they mean? i. Incumbents respond to disruption and create more intense competition with each other (UPS and FedEx)
BEST RESPONSE TO DIGITAL Loop 1: Google Maps obliterates top GPS makers Alibaba Group Holdings, Facebook, Gmail threaten banking The more digitally advanced an industry, the larger the negative impact on incumbents that don’t act Digital disruption hurts slower-growing companies the most
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BEST RESPONSE TO DIGITAL Loop 2: Innovation gives way to imitation Reactive mode – “the pressure to follow suit with revenue-reducing moves can be immense” Zipcar, BlaBlaCar, and Uber
BEST RESPONSE TO DIGITAL Global Study on Response to Digitization – Results: 1. Digitization has negative impact on profits for incumbents 2. Bold, at-scale responses that are integrated into overall corporate strategy have the best chances of success 3. Companies should consider three responses
BEST RESPONSE TO DIGITAL 2. Bold, at-scale responses that are integrated into overall corporate strategy have the best chances of success: Only 25% of C-suite executives fully integrated digital and corporate strategies Offense not defense (proactive not reactive) Fast and bold to avoid Red Queen
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BEST RESPONSE TO DIGITAL Global Study on Response to Digitization – Results: 1. Digitization has negative impact on profits for incumbents 2. Bold, at-scale responses that are integrated into overall corporate strategy have the best chances of success 3. Companies should consider three responses
BEST RESPONSE TO DIGITAL 3. Companies should consider three responses: i. New customer segments i. Medialaan NV - Shift in video consumption by teens ii. Big Fish Games ii. New business models i. Schibsted – moved classified business to a free online marketplace iii. Redefine value i. Streaming Netflix…all three