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Business Strategies for a Digital Age
This document discusses strategies for businesses in the digital age. It outlines how digital technologies are transforming customer expectations and business models. Specifically, it discusses how capturing and analyzing consumption data can provide insights to better meet customer needs and create new sources of competitive advantage. The document also provides examples of how some companies are innovating their customer experiences and industry business models to capitalize on these digital opportunities.
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Business Strategies for a Digital Age
- 1.
- 2. Matthew Tod Leader ofCustomer & Digital, PwC Mike Greig Leader of Global Digital Transformation, PwC Nevzat Aydin CEO, yemeksepeti.com
- 3. How can webe more effective through social and mobile channels? How do I become disruptive in my industry How do I ensure my digital capabilities capitalise on my core business and technology assets? How can I arrive at 10% topline revenue growth that innovators are projecting? How can I design an experience that will better engage customers? How can my company behave more like a startup?
- 5. The ‘new normal’of weak economic growth in the EU and US (in absolute terms and relative to the emerging markets) has undermined many of the drivers which businesses relied upon to underpin success before the financial crisis. Real GDP, 2000=100 50 100 150 200 250 300 350 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Leading emerging market economies United States European Union * Average GDP growth rate, 2000-2017, Leading emerging market economies are: Brazil, China, India, Indonesia, Mexico, Russia and Turkey Source: IMF, PwC forecasts and analysis
- 6. Businesses that cancombine the right levers can achieve exceptional growth Share price performance of customer-focused, innovative and digital businesses compared with the FTSE 350 and a basket of emerging market indices Source: PwC analysis 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Dec2008 Mar2009 Jul2009 Oct2009 Jan2010 May2010 Aug2010 Nov2010 Feb2011 Jun2011 Sep2011 Dec2011 Apr2012 Jul2012 Oct2012 Jan2013 Innovation Digital Customer impact Globalisation
- 7. What do wemean by ‘Digital’? Business change, triggered and enabled by digital technology AnalyticsMobile Social Cloud
- 8. 79% Of smartphone users areusing devices to shop at least once a month 10% Higher revenue growth forecast for companies who prioritise innovation to a greater extent than their peers 50 Billion Predicted number of connected devices by the year 2020 79% Of enterprise IT spend is outside of the CIO’s budget Disrupt or be disrupted? *See Appendix for citations
- 10. A new anddifferent type of customer is emerging in the digital age The decade of digital change we live in is fundamentally changing the DNA of the customer. The digital generation is growing up – making digital the new norm in both the B2C and B2B markets. This creates issues, threats and opportunities for all businesses. And one thing is clear: continuing as is or just trying harder is unlikely to work. Illustrative representation Are you ready to survive, grow and win in the digital age?
- 12. Digital can be usedto push the frontiers of eCommerce, with a first digital wave philosophy First digital wave example Shop for your groceries in the tube station
- 14. Tesco helps you Set yourgoals Your household members Understand your consumption Hit your budget Eat more healthily Eat more organic and “bio” products Support local producers Help sustainability
- 15. Tesco helps you Yourhealthy eating dashboard for August 2012 Calories per day Units of alcohol per day Grams of salt per day “Bad” fats Fresh fruit & veg per day Worse than desired target Better than desired target We can give you a “healthy eating dashboard” for your family that will make it fun to eat healthily Understand your consumption Hit your budget Eat more healthily Eat more organic and “bio” products Support local producers Help sustainability Set your goals Your household members
- 16. For example, someplayers are trying to push the understanding of how value is consumed in music EXAMPLE - Different ways to sell & buy music • Physical medium • No interaction with the customer after purchase • Emphasis on product • Emphasis on demand chain Buy CDs and own your personal “physical collection” of music albums Real objective = Understand consumption and revolutionise the industry • Online purchase of product • Physical medium • No/limited interaction with the customer after purchase • Emphasis on product Use the convenience of the internet to buy CDs online and own your personal “physical collection” of music albums Real objective = Sell CDs (through the internet) • Digital medium • No/limited interaction with the customer after purchase • Emphasis on experience • Emphasis on demand chain Buy and own your personal “virtual collection” of music ‘tracks and albums’. Personalise you experience with Playlists Real objective = Sell Apple devices • Digital medium • Continuous interaction with the customer after purchase • Emphasis on experience • Emphasis on consumption chain The world’s music is virtually yours for a monthly subscription. We will pay the artists fairly based on how much their music is listened to Real objective = Understand consumption and revolutionise the industry
- 17. Nike +: Fitness= a goal enabled by a non-fictional game Convenience of transaction Functional affinity Emotional affinity Individual outcome (self-challenge) Individual outcome (Comparison with others) Collective outcome (Interaction with Others) Community & societal outcome Buying these trainers was a nice experience I like these trainers Nike is a “cool” brand By tracing my runs on the Nike+ portal I can keep to my training plan and become fitter By comparing my running results to others’, I can learn how to train better Nike+ has helped me stay in touch with my friends who like running and have more fun with them Nike+ can educate people to appreciate exercise, and have fun and stay healthy Features Image Features Individual result Image Features Individual result Image Features Collective result Individual result Image Features Community result Collective result Individual result Image Features
- 18. AT&T digital life– A lifestyle portfolio of solutions expected to add $1 billion to AT&T revenues 8am 12pm 4pm 10pm No hunting for keys Avoid the grocery-bag juggle by setting the door to unlock automatically when the garage door is opened Prepare for arrival Come home to a cosy house. Remotely turn on lights or adjust the thermostat, to prepare the house before you arrive Door locks Door package> Light switch Energy package>
- 19. AT&T digital life– Customers control their smart homes using handheld devices Security 24 hour home monitoring, 24 hour battery backup, wireless keypad, keychain remote & recessed sensors Door package Allows trusted third parties into the home remotely with automated door locks, checks to see whether doors open Water control package Shuts of water from main source Camera package Live video inside and outside the home Energy package Control appliances, lighting and thermostats Water detention package Detect water leaks
- 20. Responding to thechallenge
- 21. The more consumptiondata you capture, the more you will learn and be able to tailor your offering, creating a competitive advantage Personalised and enhanced value Consumption data The company The customerTrust Customer as a partner, not as a prey of astute marketers Monetisable customer advocacy Personal outcomes
- 22. Changing faster thanever before Know Know your customer and your ecosystem Define Define what your success looks like Evolve Innovate your business Create Create new value Accelerate Accelerate your execution through technology- enabled change Protect Protect you from the risks of the digital economy (cyber, tax implications, etc.) Faster organisational learning
- 23. STRATEGY Disruptive Business Models Opportunity Visualisation Value Migration Wargaming& Fierce Competitor Design Scenario Planning Capability Roadmap Tax Structure/ Strategy Talent & Culture The skills we all need to respond to the "World in Beta" Maximising business value INNOVATION Immersion & Acceleration Labs Rapid Prototyping Minimum Viable Product Definition Internet of Things Visioning (e.g. wearables, NFC, sensors, etc.) Experience Radar Moving into whitespace EXPERIENCE Human Centered Design Journey mapping Prototyping & Concept Visualisation Data Visualisation User Experience and User Interface Concept and Usability Testing Ethnography & Behavioural Economics Creating superior user engagement TECHNOLOGY Business Transformation E-Commerce Content Management Social, Mobile & Local Platforms Marketing Platforms Sales & Service Enablement Cyber & Information Security Enterprise Integration Objectively viewing the connected world ANALYTICS Social Impact Marketing Attribution Mobile Outcomes Predictive Analytics Multi-Channel Behaviour Segmentation Media Effectiveness Identifying insights that matter ACTIVATION & OPTIMISATION Lead Acquisition and Nurturing Outcome Optimisation (Media Buying, Social Engagement, Mobile, etc.) Re-targeting Shopper Marketing Tax Efficiency Operate & Transfer Locking in business value
- 24.
- 25. Strategy for adigital age – There are four catalysts….. Transformationfocusarea Consumption data Collaboration & social media Channel integration Transaction data Mobility & access anywhere How do you facilitate better knowledge sharing, collaboration & productivity across your extended organisation? How do you adapt your business processes to support the production and management of new digital products and services? What technology architectures and platforms are needed to underpin enhanced business agility, performance, security and efficiency? How do you successfully engage with customers across all channels to grow revenues and drive advocacy? What opportunities does the digital landscape create for your business? What new value propositions are required to monetise digital value? 5 4 3 2 1 Employee & networks Core process & structure Tech, infra & security Customer experience Business model Data
- 26. The second digitalwave Digital will add a new source for differentiation: Outcome and consumption value what could this look like for your industry? Customerexperience Companypromise Products are defined by sectors, but outcomes transcend sectors Value proposition layers Brand1 Product2 Price3 Touch points4 Outcomes and consumption 5 First digital wave Digital (through the rise of social media and online platforms) has radically altered how organisations interact with their customers and operate in the value chain I Second digital wave Digital is going to create new sources of differentiation by leveraging consumption data to enable customers to achieve their outcomes better II
- 27. How PwC isresponding
- 28. PwC – Clientcentric global collaboration’s solution Global digital experience = a flexible framework for app delivery Client and team collaboration = a series of line of service apps enabling teams and clients to work together how they want
- 29. PwC – Roadmapof capabilities (plus demo of app and transform) Data (surfaced via search and business spplications) Shared Capabilities Infrastructure – Global Platform – Standardised Vertical apps ProfileLanding Pages Team calendar Tasks Content Social Documents Search Standardise, Globalise, Cloud enable Reports Issues MobileApp Store Surveys Web analytics Collaboration Globalcollaboration Business scenarios WorkspacesData
- 30. Speaker contact details MikeGreig mike.greig@uk.pwc.com Matthew Tod matthew.tod@uk.pwc.com
- 32. This document hasbeen prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this document, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this document or for any decision based on it. © 2014 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. 140509-131111-NH-UK
Editor's Notes
- #19 Digital Life is a lifestyle portfolio of solutions that ranges from next-generation security systems to complete home automation tools. It enables customers to control their smart homes using various handheld devices. AT&T provides the full service from installing required infrastructure to home management software. Digital Life is expected to add $1bn to AT&T’s revenues.
- #27 REMINDER: Before I will explain the concept of outcome and consumption value , I would like to ask you for 10 minutes to explain the concept and some potentially new definitions.
- #31 REMINDER: Before I will explain the concept of outcome and consumption value , I would like to ask you for 10 minutes to explain the concept and some potentially new definitions.