Session 1 - Digital Disruption Flashcards
Describe the concept of digital disruption
Digital disruption refers to the impact of digital technologies on traditional business models, leading to significant changes in industries and markets.
EXPLANATION
The disruption is driven by advancements in technology, such as internet, mobile devices, and AI. It often leads to the creation of new products, services, and business models that challenge established players in the industry. Digital disruption can result in increased efficiency, improved customer experiences, and the emergence of new market leaders. It requires businesses to adapt and brace digital transformation to stay competitive in the rapidly changing digital landscape.
What does SMACIT stand for?
Social, Mobile, Analytics, Cloud, Internet of Things
It is an acronym used to represent a set of disruptive technologies. Each of these technologies has had a significant impact on various industries, transforming the way businesses operate and interact with customers. SMACIT has played a crucial role in driving innovation and enabling digital transformation.
Define Gartner’s hype cycle and its five phases
Gartner’s hype cycle is a model that illustrates the lifecycle of emerging technologies. It helps to understand the expectations and adoption patterns of these technologies.
The five phases are:
1. Innovation/ technology trigger: when a new technology is introduced
2. Peak of inflated expectations: when there is excessive hype and unrealistic expectations
3. Trough of disillusionment: when the technology fails to meet expectations and interest declines
4. Slope of Enlightenment: when practical applications and benefits are understood
5. Plateau of Productivity: when the technology reaches mainstream adoption and delivers tangible value
Name three trends in emerging technologies’ hype cycle
- AI everywhere (deep learning, machine learning, UAVs, autonomous vehicles): increasing integration of AI in various industries and applications. This includes e.g., chat bots, virtual assistants, and autonomous vehicles.
- Transparency immersive experiences (4D print, AR, connected homes, VR): highlights growing demand for immersive technologies like VR and AR —> offer more interactive and engaging experiences in fields such as gaming, entertainment, and training
- Digital platforms (5G, blockchain, IoT platform, quantum computing): emphasizes the rise of online platforms that connect users and businesses. These platforms enable various services, such as e-commerce, ride-sharing, and food delivery, and have become integral parts of our daily lives.
What is the difference between digitized and digital?
Digitized: digitization involves standardizing business processes associated with cost cutting, reliability, efficiency, and transparency.
Digital: digital technologies are introducing speed and connectivity, creating opportunities for entirely new customer value propositions.
- Companies deliver digitally inspired customer value propositions in the form of digital offerings
- Digital offerings are information-enriched customer solutions delivered as seamless, personalized customer experiences. Digital offerings introduce new business models and provide new sources of revenue.
The process of digital disruption
- business world is increasingly digitized
- Breaking down industry barriers
- Creating new opportunities while destroying long-successful business models
Examples of digital disruption:
- Entertainment (Blockbuster vs. Netflix)
- Telecom (Nokia vs. Blackberry)
- Photography (Kodak going bankrupt due to lack of digitalization)
What do businesses need to compete in the Age of AI
Customer Centricity
Digital Business Model
Analytical Capability
Technology Maturity
Describe “a collision to action”
Traditional and digital operating models collide with one another where their value curves intersect. While the former tend to have diminishing returns, the latter can continue to grow in scale, scope, and learning, increasing in value as users and engagement grow.
What are the keys to success in the digital age?
- Understanding customer needs
- Organizational flexibility
- Respect for incremental change
- New skills and technology must be not only acquired but also protected
Evaluate digital disruption: how do digital technologies change industry dynamics? Which questions to ask?
- How can IT be used to reengineer core value activities and change the basis of competition?
- How can IZ build or reduce barriers to entry?
- How can IT add value to existing products and services or create new ones?
- How can IT change the nature of relationships and the balance of power among buyers and suppliers?
- How can IT increase or decrease switching costs?
What is a value chain?
A value chain is a set of activities that explains how a firm is essentially configured and linked, and the way they are organized. The way they are configured determines the competitive advantage of a given firm.
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Value chains can be used to analyze internal operations and evaluate key success and key processes
Support activities
- Firm infrastructure
- Human Resources
- Technology Development
- Procurement
- …
Primary activities
- Inbound logistics
- Operations
- Outbound logistics
- Marketing & Sales
- After-Sales Services
Digital doesn’t have to be disruptive (myths)
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Define the term “newly vulnerable market”
A newly vulnerable market refers to a market that is susceptible to disruption due to various conditions such as regulatory changes, technological advancements, changes in customer preferences, and reduced barriers to entry.
Explain “commoditization vs. decommoditization”
Decentralization refers to the practice of unbundling services and offering them as separate options with individual prices. In the airline industry this means charging passengers for specific services, such as checked bags, instead of including them in the ticket price.
Explain the three conditions that make markets vulnerable to digital disruption
Condition 1: Newly easy to enter
- Due to regulatory change that permits new entrants
- Changes in technology that reduce cost of entering
- Reduce the minimum scale needed to compete
- Changes in disruptive system
- Changes in customer preferences
** Condition 2: attractive to attack**
- If all participants were earning excess profit
- Profound differences exist in profitability across customers
Condition 3: difficult to defend
- barriers prevent incumbents from immediate replication
- existing pricing structures, strategic inflexibility, lack of vision, legacy systems
