Digital giants

1. H O W A M I D
S I Z E D C O M PA N Y C A N
U S E D ATA TO
C O M P E T E W I T H
D I G I TA L G I A N T S
( M S B A 3 0 0 )
BY. JAISH PANDEY
DATED: 22/02/2023
https://hbr.org/2021/02/how-midsize-companies-can-
use-data-to-compete-with-digital-
giants#:~:text=This%20involves%20choosing%20your
%20customers,and%20changing%20customer%20nee
ds%20within

2. BYRNES & WASS,(2022).HOW A
MID SIZED COMPANY CAN USED
DATA TO COMPETE WITH DIGITAL
GIANTS,PP. 8-9
According to the Byrnes and Wass's article, the secret to a mid-sized
company's survival in the post-pandemic period and throughout this new
era is to strategically align your organization around your profit core (both
current profits and your projected defensible market positioning) to
establish dominance in your target market segments. The article also
suggests three stages to midsize firm success, which is a tried-and-true
strategy to achieve consistent, justifiable profit growth in the post-pandemic
period and beyond

3. D ATA A S A N E S S E N T I A L N U T R I E N T F O R T H E
S U RV I VA L A N D T R I U M P H O F M I D - S I Z E D
C O M PA N I E S
 Through the course of the article, both the authors are pointing towards the significance of data and
using data intelligence for mid-sized companies to stay relevant in this analytics governed era. A
midsized business can survive in tough times because it can use its existing infrastructure and data
to quickly adapt to new customer needs, and how midsized companies should focus on developing
long-term relationships with customers and finding ways to capitalize on recurring revenues to avoid
bankruptcy during slow periods.
 Digital behemoths have benefitted from the epidemic, but modest businesses have been heavily
hurt. Several midsize business executives may be considering how to thrive in their organizations.
The article walks us through a less travelled road that the mid-sized companies can follow by
referring to an example of Edison’s Furniture (a fictitious furniture retailer) which applied data
intelligence to improve its sales and consumer satisfaction and ultimately boosting profit and revenue
for the company. There are several steps through which a mid-sized company like Edison’s can allow
data to make informed decision for potential growth and save their ships from sinking

4. STRUGGLES FACED BY EDISON'S DURING
THE PANDEMIC
 All businesses must adapt to the changes, but midsize businesses must do so since they are
particularly susceptible but also potentially highly agile. They are more vulnerable since they
are smaller than their powerful competitors and have less diversity to fend off the effects of
price wars. If they have the resources to shift positions and fewer established bureaucracy,
which makes it simpler to innovate and adapt, they can be nimble.
 Edison Furniture ran into an issue when the epidemic started. Edison (not its true name)
generated the majority of its revenues from selling mattresses, like the majority of furniture
merchants. Their revenues were being rapidly eaten away by internet retailers and local
establishments with deep discounts.
 The firm polled its substantial clientele and discovered that the majority were price shoppers. It
was a mid-sized retailer with half a dozen expensive, enormous storefronts, and it was caught
in an unwinnable pricing war. Profits fell as a result of fewer people buying at stores due to the
epidemic.

5. EDISON'S RESPONSE TOWARDS CHANGING
CIRCUMSTANCES
 In response, Edison's management made the decision to test a fresh approach to profitability
analysis proposed by one of its directors: Instead of distributing expenses uniformly, they ascribed
their real costs to each transaction in a database they constructed of their sales transactions.
 They saw that 20% of their customers—those who created more than 130% of their profits—
accounted for nearly half of their sales. A third of their revenues were generated by about 30% of
their customers, yet these "profit drain" consumers cost them more than 50% of their earnings. The
remaining 50% of their clients, or the "profit desert" consumers, contributed around 20% of their
sales but less than 10% of their profits.
 The managers of Edison understood that their price-war approach was a response to the demands
of their profit drain clients and that they were virtually neglecting their high-profit consumers when
they noticed this profit segmentation.
 They swiftly divided their huge clients into profit-boosting and profit-draining consumers by sending a
simple survey to all of them. They discovered that the profit peak clients were fiercely loyal to the
shop and frequently had a go-to salesperson

6. E D I S O N ' S M A N A G E M E N T T E A M TO O K S E V E R A L
S T E P S TO A D D R E S S T H I S P R O B L E M .
 In order to identify these elite clients when they entered the shop and direct them to their preferred salespeople,
they designed symbols in their Salesforce system that represented each customer's profit sector (for example,
profit peak customer). They provided them with exclusive services such as after-hours shopping, first access to
special specials, and targeted online bargains.
 They gave their sales representatives the directive to avoid haggling with the profit drainers, whom they could also
identify through Salesforce. They were shocked to discover that the majority of these consumers made purchases
from the store nonetheless in order to take advantage of Edison's excellent service.
 They gave their merchandisers instructions to create private label products since they were
more popular with profit peak clients and more profitable. Instead of using a cheap pricing
motif in their advertising, they now emphasize great quality and good service.
 They placed their "master" drivers, who excelled at providing excellent customer service, in the areas where their
most profitable clients lived, and had the other drivers shuttle cargo to them. When delivering the delivery, these
expert drivers handled all of the crucial client interactions and looked for the additional furnishings the customers
could need, which resulted in several purchases.

7. THE RESULT'S THAT FOLLOWED.
Edison's profits shot through the roof, and in the process, they chiseled out a defendable,
high-growth strategy that the off-price competitors and digital giants couldn't match with
their low-service, low-price strategies, demonstrating that midsize companies that are
innovative, flexible, and use data to find new insights can find opportunities to thrive. The
reason Edison was successful was because it recognized and created a very profitable,
tenable approach that the digital goliaths could not adopt, and it said "no" to clients who did
not meet its target profile. The three actions that midsize company executives must take to
succeed in post-pandemic markets are highlighted by Edison's inspiring narrative.

8. T H E 3 I M P O RTA N T S T E P S A M I D - S I Z E D C O M PA N Y M AY
TA K E TO E X C E L I N P O S T- PA N D E M I C M A R K E T
 Choose your customer
This entails selecting your customers to focus on profitable, defendable market segments while avoiding those that are
exposed to invasion by digital giants; aligning your limited resources to capture and grow your target segments; and
managing your company to meet your target segments' varying and shifting customer needs.
 Align your resources
The procedures and technology that supported Edison's chosen clients were the focus of its resource allocation.
Accurate, detailed profit analytics are necessary for successful resource realignment because they enable you to
estimate the effects of prospective market changes and competition incursions and indicate the profitability of every
corner of your business.
 Managing your organization
To deliver the services its target clients want, Edison established efficient new transaction-based metrics and managed
the synchronization of its core functional areas, sales, goods, and customer relationships. The greatest news was that
this repositioning didn't call for a significant financial outlay. The money they saved by not discounting covered the cost
of the entire programme and generated significant profit increase.

9. CONCLUSION
 In conclusion, a mid-sized company can use data intelligence to compete with digital giants by
leveraging its unique strengths, setting clear business goals, collecting and analyzing data,
using machine learning and AI, and implementing data-driven strategies. By doing so, the mid-
sized company can make informed business decisions, identify patterns and insights, and gain
a competitive advantage
 While it may not have the same resources as digital giants, a mid-sized company can use data
intelligence to differentiate itself, improve customer retention, increase sales, and compete on a
more level playing field. Ultimately, data intelligence is a powerful tool that can help mid-sized
companies make smarter decisions, drive growth, and compete with the best in the business.

10. KEY TAKEAWAYS FROM THE CASE STUDY
 For a firm to succeed, it needs to be able to compete. The most important strategy used by
businesses to attract consumers is to increase their competitiveness. Data may help businesses
better understand consumer behavior to attract consumers.
 It is crucial to first comprehend our clients' needs and the company environment through data.
We must also be aware of the advantages, disadvantages, opportunities, and risks facing our
business.
 A mid-sized business might not have a digital giant's resources or reach, but it might have other
advantages like specialized knowledge, consumer insight, or a specific market. A mid-sized
business may set itself apart from the digital giants by recognizing and capitalizing on these
characteristics.
 The mid-sized organization should specify its objectives and employ data intelligence to help it
achieve them. For instance, the business can wish to boost sales in a specific product area or
enhance client retention. The business could implement customized marketing initiatives to boost
client retention or provide tailored product suggestions to boost sales.

11. R E F E R E N C E :
How Midsize Companies Can Use Data to Compete with Digital
Giants. (2021, February 22). Harvard Business Review
https://hbr.org/2021/02/how-midsize-companies-can-use-data-to-
compete-with-digital-giants