Article 1: Thriving in an increasingly digital ecosystem.
The article presents a framework to help mangers think about their competitive
environments in the digital era. Managers seek to transform in two dimensions:
- Knowing more about their end customers.
- Operate in an increasingly digital ecosystem.
1. Supplier model: enterprises continue to
digitize, and search becomes easier,
therefore suppliers lose power and are
pressured to continually reduce prices.
This results in further industry
consolidation.
2. Omnichannel model: provide customers
access through multiple channels,
physical and digital channels, giving them
greater choice and seamless experience.
3. Ecosystem driver model: provide a
platform for participants to conduct
business. Like omnichannel businesses,
ecosystem drivers use their brand
strength to attract participants, ensuring
a great customer experience and offer
one-stop shopping.
4. Modular Producer Model: To survive,
must be best in category. To thrive they
need to continue roll out new products
and services to demonstrate they are
among the best options available and best priced.
Ecosystem Drivers
- Companies with ecosystem drivers as dominant model have the highest margins and
growth.
- That is because they are
o More responsive to their customer needs.
o Become a destination to sell their own products as well as others.
Develop New Capabilities In 2 Areas to Prepare for the Future
1. Gain better knowledge about consumers through:
o Enhanced digital capabilities in obtaining info about customer goals
o Enhance customer in the firm (via customer satisfaction metric)
o Emphasize evidence based on decision making
o Develop integrated multi-product and channel customer experience
2. Becoming more of an ecosystem by:
o Being first choice for customers (through brand promises, world-class
execution)
o Become great at building partners
o Create service enabled interfaces
o Treating efficiency and compliance as a competence
1
,Article 2: Competing on customer journeys.
The paper gives an overview of how a company can benefit from big data and why
companies should be able to get all of the people work together.
Customer Journeys Need to Be Stickier
- Loyalty loop: design journeys so that customers won’t consider leaving the journey.
- New journey: compresses consider step, shortens evaluate step – locking in loop.
o Classic: consider -> evaluate -> consider -> buy -> enjoy -> advocate -> bond.
o Loyalty loop: buy -> enjoy -> advocate -> bond.
4 Interconnected Capabilities to Build Most Effective Journeys
1. Automation: digitization and streamlining of steps in journey that were formerly
done manually to create stickier journeys. Execute journey quickly and easily.
2. Proactive personalization: use information from past customer interactions or from
existing sources to instantaneously customize shoppers’ experience.
3. Contextual interaction: use knowledge about where a customer is in a journey
physically or virtually to draw him forward into next interactions.
4. Journey intervention: ongoing experimentation and active analysis of customer
needs, technologies and services to find new, valuable sources for the company and
customers (opportunities) to improve relationship.
Winning brands’ success: the superiority of the journey, not what they sell.
3 Capabilities in Practice
1. Use API to pull data from other providers to assemble a picture of the customer.
2. Create customer dashboards for production and use.
3. Create conservation-oriented customer communities.
3 Factors to Build Successful Journeys
1. Chief Experience: guide decision on journey investments and customer segments to
focus on, prioritizes current journeys for digital development and spot opportunities.
2. Journey Product Managers: at centre of action to understand how customers move
through the journey, to extend the journey, and to increase stickiness and value.
3. SCRUM teams: execution-oriented, agile and fast in testing improvements.
Understand needs/wants, use prototyping/customer-user data, measure impact.
Journey managers bring them together to design sprints for new paths.
2
, Article 3: Pipelines, platforms and the new rules of strategy.
Pipeline business: create value by controlling a linear series of activities (classic value chain
model where inputs undergo steps and transform them into outputs).
Platform business: bring together producers and consumers in high-value exchanges, which
nowadays can be online where information and interactions are the source of value.
Platforms
Building/scaling platforms is simpler and cheaper because of
IT, allowing nearly frictionless participation that strengthens
the network effects and enhances the ability to capture,
analyse and exchange huge amounts of data that increase
the platform’s value to all.
- Platform owners: control their intellectual property
and governance.
- Providers: platform’s interface with users.
- Producers: create offerings.
- Consumers: use offerings.
Move from Pipelines to Platforms
1. From resource control to resource orchestration: about resources of members.
2. From internal optimization to external interaction: facilitate interactions lower vc.
3. From focus on customer value to ecosystem value: maximize total value in circular,
iterative, feedback-driven process.
Porter’s 5 forces still apply but they behave differently, new factors come into play.
Network Effects as Driving Force
Greater scale generates more value, which attracts more participants, which creates more
value. More platform participants offer higher average value per transaction because a
larger network better matches between supply and demand and richer data can be used to
find matches.
- Platform participants create value for a business.
- Boundaries can shift rapidly
o Consumers/producers can swap roles to generate value (Uber driver/user).
o Platform providers might switch to compete with owner. Prevent this by
extracting values from platform owners while continuing to rely on
infrastructure (e.g. controlling consumers’ interactions with content in offers).
3 Patterns of Competitive Threats
1. Come from established platform with superior network effects uses its relationship
with customers to enter your industry. Google has this, and moved to mapping etc.
2. Competitors may target overlapping customer base: with distinctive new offering
that leverages network effects (Airbnb and Uber challenge industries).
3. Platforms that collect same type of data go after your market: e.g. traditional
providers of health care (Fitbit) are launching platforms based on health data they
own.
3
The article presents a framework to help mangers think about their competitive
environments in the digital era. Managers seek to transform in two dimensions:
- Knowing more about their end customers.
- Operate in an increasingly digital ecosystem.
1. Supplier model: enterprises continue to
digitize, and search becomes easier,
therefore suppliers lose power and are
pressured to continually reduce prices.
This results in further industry
consolidation.
2. Omnichannel model: provide customers
access through multiple channels,
physical and digital channels, giving them
greater choice and seamless experience.
3. Ecosystem driver model: provide a
platform for participants to conduct
business. Like omnichannel businesses,
ecosystem drivers use their brand
strength to attract participants, ensuring
a great customer experience and offer
one-stop shopping.
4. Modular Producer Model: To survive,
must be best in category. To thrive they
need to continue roll out new products
and services to demonstrate they are
among the best options available and best priced.
Ecosystem Drivers
- Companies with ecosystem drivers as dominant model have the highest margins and
growth.
- That is because they are
o More responsive to their customer needs.
o Become a destination to sell their own products as well as others.
Develop New Capabilities In 2 Areas to Prepare for the Future
1. Gain better knowledge about consumers through:
o Enhanced digital capabilities in obtaining info about customer goals
o Enhance customer in the firm (via customer satisfaction metric)
o Emphasize evidence based on decision making
o Develop integrated multi-product and channel customer experience
2. Becoming more of an ecosystem by:
o Being first choice for customers (through brand promises, world-class
execution)
o Become great at building partners
o Create service enabled interfaces
o Treating efficiency and compliance as a competence
1
,Article 2: Competing on customer journeys.
The paper gives an overview of how a company can benefit from big data and why
companies should be able to get all of the people work together.
Customer Journeys Need to Be Stickier
- Loyalty loop: design journeys so that customers won’t consider leaving the journey.
- New journey: compresses consider step, shortens evaluate step – locking in loop.
o Classic: consider -> evaluate -> consider -> buy -> enjoy -> advocate -> bond.
o Loyalty loop: buy -> enjoy -> advocate -> bond.
4 Interconnected Capabilities to Build Most Effective Journeys
1. Automation: digitization and streamlining of steps in journey that were formerly
done manually to create stickier journeys. Execute journey quickly and easily.
2. Proactive personalization: use information from past customer interactions or from
existing sources to instantaneously customize shoppers’ experience.
3. Contextual interaction: use knowledge about where a customer is in a journey
physically or virtually to draw him forward into next interactions.
4. Journey intervention: ongoing experimentation and active analysis of customer
needs, technologies and services to find new, valuable sources for the company and
customers (opportunities) to improve relationship.
Winning brands’ success: the superiority of the journey, not what they sell.
3 Capabilities in Practice
1. Use API to pull data from other providers to assemble a picture of the customer.
2. Create customer dashboards for production and use.
3. Create conservation-oriented customer communities.
3 Factors to Build Successful Journeys
1. Chief Experience: guide decision on journey investments and customer segments to
focus on, prioritizes current journeys for digital development and spot opportunities.
2. Journey Product Managers: at centre of action to understand how customers move
through the journey, to extend the journey, and to increase stickiness and value.
3. SCRUM teams: execution-oriented, agile and fast in testing improvements.
Understand needs/wants, use prototyping/customer-user data, measure impact.
Journey managers bring them together to design sprints for new paths.
2
, Article 3: Pipelines, platforms and the new rules of strategy.
Pipeline business: create value by controlling a linear series of activities (classic value chain
model where inputs undergo steps and transform them into outputs).
Platform business: bring together producers and consumers in high-value exchanges, which
nowadays can be online where information and interactions are the source of value.
Platforms
Building/scaling platforms is simpler and cheaper because of
IT, allowing nearly frictionless participation that strengthens
the network effects and enhances the ability to capture,
analyse and exchange huge amounts of data that increase
the platform’s value to all.
- Platform owners: control their intellectual property
and governance.
- Providers: platform’s interface with users.
- Producers: create offerings.
- Consumers: use offerings.
Move from Pipelines to Platforms
1. From resource control to resource orchestration: about resources of members.
2. From internal optimization to external interaction: facilitate interactions lower vc.
3. From focus on customer value to ecosystem value: maximize total value in circular,
iterative, feedback-driven process.
Porter’s 5 forces still apply but they behave differently, new factors come into play.
Network Effects as Driving Force
Greater scale generates more value, which attracts more participants, which creates more
value. More platform participants offer higher average value per transaction because a
larger network better matches between supply and demand and richer data can be used to
find matches.
- Platform participants create value for a business.
- Boundaries can shift rapidly
o Consumers/producers can swap roles to generate value (Uber driver/user).
o Platform providers might switch to compete with owner. Prevent this by
extracting values from platform owners while continuing to rely on
infrastructure (e.g. controlling consumers’ interactions with content in offers).
3 Patterns of Competitive Threats
1. Come from established platform with superior network effects uses its relationship
with customers to enter your industry. Google has this, and moved to mapping etc.
2. Competitors may target overlapping customer base: with distinctive new offering
that leverages network effects (Airbnb and Uber challenge industries).
3. Platforms that collect same type of data go after your market: e.g. traditional
providers of health care (Fitbit) are launching platforms based on health data they
own.
3
