Text book:
Weill, P., & Woerner, S. (2018). What's your digital business model? : Six questions to help you
build the next-generation enterprise. Harvard Business Review Press.
Weill and Woerner's (2018) "What's your digital business model?" emphasizes that in today's
digital landscape, characterized by mobile-first strategies and enhanced customer knowledge,
competitive advantage stems from excelling in one or more of three key areas: content,
customer experience, and platforms.
The authors highlight the significant shift from a "world of place" (physical, product-based) to a
"world of space" (intangible, service-based, digital-centric). In this new paradigm, companies
must rethink internal accountability, business processes, and data accessibility to digitally engage
customers effectively. Enterprises that prioritize digital customer experience achieve higher
profit margins and revenue growth.
The three sources of competitive advantage are defined as:
Content: Refers to the products and information offered, both digital and physical. Rich,
relevant, and frequently refreshed content drives new revenue streams and customer
engagement. TripAdvisor is cited as an example, where its vast user-generated reviews,
photos, and travel information are its primary competitive edge, attracting millions of
users and disrupting traditional travel agents.
Customer Experience (CX): Encompasses the quality of interaction between customers
and a company's content, influenced by ease of use, presentation, and multi-channel
integration. A superior CX drives cross-selling and increased revenue per customer. DBS
Bank is presented as a prime example, transforming itself by focusing on customer
journeys, simplifying banking, and saving customers time, leading to significant
customer acquisition with its mobile-only Digibank in India.
Platforms: Represent the digitized processes, data, and infrastructure (both internal and
external) used to deliver content. Robust, reusable platforms enable economies of scale,
efficiency, and flexibility, leading to better margins. Amazon's sophisticated platform,
including its vast customer data, analytics, and seamless integration with external
delivery services, exemplifies this advantage. Schneider Electric also built a unified
global CRM platform to improve customer experience and drive cross-selling.
The authors advise that while leading digital enterprises like Amazon eventually need to excel in
all three areas, "born-physical" companies transitioning digitally should initially focus on one or
two areas based on their strategic goals:
Strengthening digital content if the goal is driving new digital revenue.
Improving digital customer experience if the goal is cross-selling and increasing
revenue per customer.
Building and exploiting shared digital platforms if the goal is efficiency and flexibility
(lower costs and better margins).
The text uses examples like Netflix's journey from a DVD rental misstep to a global streaming
leader by focusing on content and customer experience, and The Wall Street Journal's
transformation from physical print to modular digital content and platforms. The effectiveness of
exploiting these levers varies by industry, but top financial performers across all sectors
consistently demonstrate stronger capabilities in content, CX, and platforms.
Weill and Woerner's (2018) "How Will You Connect Using Mobile and the Internet of Things?"
emphasizes the transformative power of combining mobile technology with the Internet of
Things (IoT) for businesses seeking digital competitive advantage. This intersection promises
unprecedented knowledge sharing, enhanced customer independence, and significant financial
opportunities for enterprises.
Mobile Connectivity: Smartphones have become the primary channel for digital engagement,
with users spending increasing amounts of time on their mobile devices. This ubiquity and rich
functionality (sensors, camera, location, payments, personalization) make mobile a crucial
battleground for customer engagement. Enterprises must develop strong mobile strategies to
become a "go-to" for customers, consolidating services previously spread across multiple
channels and businesses. This can lead to significant revenue growth and improved net margins
for companies that excel.
The authors identify five mobile strategies with increasing potential impact:
1. Brand Enhancement: Using mobile apps to provide useful, free services that enhance
the brand, often for B2B companies looking for their first direct customer engagement
(e.g., Johnson & Johnson's health apps).
2. Multichannel: Improving customer experience by seamlessly integrating mobile with
other channels (e.g., Woolworths' app helping in-store shopping and offering online
delivery).
3. B2B2C: Enabling enterprises that traditionally sell through intermediaries to connect
directly with end customers via mobile (e.g., P&G's Pampers Rewards, Dunkin' Donuts'
DD Perks).
4. Targeted Segment: Creating unique mobile offerings for specific customer
demographics (e.g., iGaranti's mobile-only bank for millennials).
5. Mobile First: Launching all new product and service offerings in the mobile channel
first, requiring significant organizational realignment (e.g., Westpac Bank's commitment
to mobile as its "front door").
Successful mobile strategies require clear definition, effective execution, and often lead to
internal organizational changes to prioritize customer experience. Companies that achieve high
mobile engagement goals see significant financial benefits.
IoT Commitment: The IoT, involving digitally sensed products and assets, is poised to generate
trillions of dollars and billions of connected devices. While many executives are still figuring out
monetization, the true power of IoT emerges when combined with data analysis and algorithms
to proactively meet customer needs and optimize operations.
The authors highlight a strong correlation between an enterprise's commitment to IoT and its
revenue growth from new products and services. High commitment involves:
1. Threat: Acknowledging and responding to digital disruption as a motivator for IoT
investment.
2. Vision: Executive-level discussion and analysis of digital disruption and innovation.
3. New IoT Capabilities: Developing open APIs for internal and external connections to
leverage IoT data and services.
4. Organizational Readiness: Possessing the leadership, investment, governance, and
sharing capabilities needed for significant business model changes.
Enterprises with strong IoT commitment are more likely to become "ecosystem drivers," leading
and controlling IoT networks to deliver comprehensive solutions, while those with less
commitment may become "modular producers," participating in others' networks. The chapter
illustrates these concepts with examples like GE, Flex, and Schindler. The convergence of
mobile and IoT creates a "connectivity on steroids" effect, promising immense value creation
and control for both enterprises and customers, but also presenting a complex battleground for
market dominance.
• What is a competitive advantage? Give me an
example in SA?
Capitec Bank (Financial Services):Competitive
advantage = low-cost banking model
Shoprite (Retail):Competitive advantage = extensive
supply chain and economies of
scale
• What is a digital competitive advantage? An
example or two?
• Discovery (Insurance & Financial Services):Digital
competitive advantage = Vitality Program powered
by data analytics and digital engagement
• UX Design and User Experience As A Competitive
Advantage e.g. Virgin Atlantic & Zappos
