Chp 11: Building and implementing digital strategy

Question 1

What are the five key enablers of digital strategy as identified by the World Economic Forum (WEF)?

Answer 1

1. Agile and digital-savvy leadership
2. Forward-looking skills agenda
3. Ecosystem thinking
4. Data access and management
5. Technology infrastructure readiness

Question 2

What are the four areas of the digital quotient?

Answer 2

1. Close the gap in digital knowledge and experience
2. Understand how digital can disrupt business models
3. Engage more frequently on strategy and risk
4. On-boardign and ‘fit’ of digital directors

Question 3

What six ways did McKinsey identify that digital can disrupt industries?

Answer 3

1. Unconstrained supply - as transaction costs are reduced, firms can provide products that were previously uneconomical to supply
2. Remove distortions in demand - being able to unbundle (songs/albums) or rebundle (flights/hotels)
3. Make new markets
4. Create new and enhanced value proposition - customers expectations are increasing
5. Reimagine business systems
6. Ecosystems

Question 4

What are four ways digital providers aim to keep ahead of customers expectations?

Answer 4

1. Brand atomisation - be compatible witht he widest range of complementary products/services as possible
2. Experimental pilots - tests with consumers
3. Prototyping - don’t wait for a product to be 100% complete
4. Design thinking - try to design many experiences for a single customer

Question 5

What are the three main areas in the battle to attract and retain digital customers?

Answer 5

1. From ‘products and services’ to ‘experiences’ - using experiences not just the product
2. Hyper-personalisation - customisation from the customer (NikeID) and for the customer (data analytics)
3. From ‘ownership’ to ‘access’ - peer to peer interactions, reviews and sales

Question 6

What are the three elements of digital traction metrics?

Answer 6

1. Scale - number of unique visitors, monthly registration growth
2. Active usage - daily active users, conversion/abandon rate
3. Engagement - time spent on site, customer satisfaction, churn rate, bounce rate

DTM = S x AU x E

Question 7

What is NPS?

Answer 7

Net Promoter Score
Measures customer loyalty on a scale of -100 to 100
A positive NPS is good as it means you have more people promoting your product and can spend less on marketing

Question 8

What are CAC and LTV?

Answer 8

CAC - Cost of acquiring a customer:
(sales and marketing expense)/(number of new customers added)

LTV - Lifetime value of customer:
(average monthy recurring revenue)x(customer lifetime)
customer lifetime = 1/churn rate

If CAC is higher than LTV it suggests the costs of acquiring a customer outweighs the benefit of the customer

Question 9

What are the five elements of the digital competency framework?

Answer 9

1. Evaluate the evolution of existing jobs
2. Identify jobs that will appear or disappear
3. Define skills required for future jobs
4. Assess current competencies of employees
5. Define future skills required for existing jobs

Question 10

What four areas should a company focus on to develop a digital culture?

Answer 10

1. Communication
2. Across the organisation
3. Visibility
4. Monitoring