Thank you very much for your post.
What I found most interesting is the move of the big consulting firms towards creating separate units dedicated to digital. Although I think that as an initial step this may help overcome some of the cultural resistance and internal push-back, I also see it as a source of potential future conflict. As the world becomes increasingly digitalized, more consulting projects will inherently need digital know-how within the team. If the digital units are completely autonomous, how will best practices flow to traditional operations and traditional clients? Will this limit the firm’s ability to provide their clients with the best solution out of fear of losing the client to a different unit? As you mention, I agree that the next few years are crucial.
Regarding the acquihire processes, I believe consulting firms should be very deliberate in the integration of the new businesses to their practices. If integration happens to quickly, there is significant risk of losing the value for which the company was acquired.
Thank you for the post Iryna! It was very interesting to read about how a spirits’ company is tackling digital transformation.
I was intrigued by the fact that the company is still managed by members of the founding families. Although this usually means that people may be set in traditional ways, I wonder if it also means they are able to take more risks and make faster decisions if they have a controlling stake. As you mention, many of their moves towards digital seem like PR moves to engage a younger audience, and I wonder if this is a reflection of how the company as a whole is thinking of digital. Are they only using digital in their costumer facing activities, or will they truly use the data internally to improve the customer experience?
Thank you for you an interesting post!
I found it really interesting that Disney failed to understand the importance of the relationship between the content creator and the user in their acquisition of Maker, and I wonder how this impacts the business going forward. As customer behavior changes, will Disney be able to change accordingly? Considering the size of the company and the long history, will it be able to react fast enough? Disney continues to attract significant talent due to their brand awareness and strong heritage, but is this sustainable in the future? As you mention, I believe that a change in mindset at the top of the organization will be key for future development. If top level managers do not fully believe and embrace the digital era, it is difficult to see how they will outperform competitors. Although the use of technology in production is part of the company’s tradition, it appears as though digital transformation in processes is not yet clear.
Another way they could maybe use to tackle this challenge would be to create partnerships with new content creators, and expose their employees to different ways of using technology that could then be imported into Disney.
Thank you for your post!
As you mention, given the nature of their business, Spotify needs to find ways to use data to improve the customer experience in order to be able to differentiate. The amount of data they have and hence the amount of user engagement and input is core to their competitive advantage. My question is therefore their capacity to continue using data in differentiated ways. There are many on-demand music server providers, and some with significant scale, and thus I wonder how easy it is for them to replicate Spotify’s use of data analytics. In this regard, I find playlists and recommendations based on data as good ways to raise barriers to exit, but I fail to see them work as effectively in the future.
Thank you for your post Austin!
I think it is very interesting that a company as big as McDonalds was able to roll-out a digital initiative in such a successful way. As we have seen in class, there can be significant resistance to data-driven changes, and I wonder if that was an issue for McDonalds. Other than the significant economical costs of this to franchisees, I assume there is a significant loss in independence and higher accountability and I wonder how much push-back the company had.
As you mentioned, this has had significant consequences in their customer experience, and it be interesting to see if customer satisfaction has increased accordingly.
Thank you for your post Sean. It was very interesting to know more about how data is used in the creative process of Netflix new shows!
Reading your post, similarly to Zach, I got worried about the creative process of new shows and how data might affect it. In my opinion, it would be detrimental to users if this approach ultimately led to a convergence of “blockbuster” themes that appeal to large audiences and are likely to be successful, as opposed to new, more creative ideas. At the same time, I wonder if the fact that Netflix knows which subscribers are likely to be interested in a particular show, thus reducing the risk, as you mentioned, could be used as an advantage. As micro-classifications and likely audiences are identified, could people be incentivized to produce targeted content by investing small amounts that make economic sense, hence increasing the amount of new and differentiated content?
What I find most interesting about this crowdsourcing effort is the complicated nature of the research it seems to target. Although I belief this is a significant hurdle to achieve scale, which it appears they already have, it may be their main source of competitive advantage and protection against future competitors. As the platform attracts and helps with more significant research, more people will be willing to take part of the effort. My main concern though, is the ability of the platform to provide sufficient recognition to members that took part on a particular research project, and the ability to handle possible IP problems. Keeping a big community engaged is key in order to maintain the quality, but it can be also more challenging to manage and keep interested. I would also be concerned about the quality of the research project that are available, to ensure that there is a constant and interesting pipeline for users to be part of.
I find the model of Rotten Tomatoes an interesting one. As you mention, they leverage external sources and crowds to generate a rating. My concern is that people do not need much time in order to see a rating, especially if they are not looking for specific reviews but just for an aggregate number. Thus, I assume the time users spend in the platform is low, which diminishes the company’s ability to generate revenues from advertising to a certain extent. From the company’s perspective, I would try to increase the value I generate for users within the website in order to keep them engaged. As you mentioned, they have an active news section, but I question if they have been able to create enough awareness and credibility in this to truly engage customers.
Thank you Christie for your post! It is very interesting that you went through the process. As mentioned in comments before, my main concern would be the quality of responses and the time that the person hiring the service has to devote to going through all the information. I wonder what is the screening process for the creatives in the platform. If there are no significant barriers to entry I would worry that there are many people that are not serious about the service provided, which appears to be the case. I wonder if by increasing the complexity of the requirements slightly, such as an explanation for the name, random submissions would be de-incentivized due to the increased effort needed.
Thanks for the post, Kat!
I find ClassPass’s business model very compelling to users that want to try different things in an industry with an increasing number of alternatives, at an affordable cost. What interests me if the value that they provide fitness studios. Even though I agree that economies of scale play a big role and that access to customers is of outmost importance, I fail to see sustainable value in what ClassPass offers the studios. As a fitness studio I would be concerned about their bargaining power and the actual conversion from ClassPass customers to full-paying members of the studio. As customers are presented with many alternatives in some cities, there might be an incentive towards not committing to one studio in particular. It would be interesting to see if the economics of small studio’s still holds with a majority of ClassPass customers.
This is a very interesting subject Iryna, thank you for writing about it!
I completely agree with the comments regarding the importance of content development and deal exclusivity to ensure sustainability, but I think it may not be enough for the long term survival of the platform. In an industry with low switching costs and thus high multi-homing tendencies, creating original content I think will only further encourage users to multi-home in order to get differentiated alternatives. Therefore, I believe that differentiation, in areas other than content, as you mentioned, is the safer way to go. Increased social media-like attributes, such as peer recommendation and / or following, could be included in Netflix to increase the engagement and time that users spend in the platform. As competition increases it will be interesting to see how companies create additional value in order to attract users.
Thank you Lama for this interesting post!
It is very interesting that a company known for being highly controversial in agriculture has chosen to take this route. Although I believe a platform such as the one developed truly helps farmers, and that leveraging big data is a great way to increase agriculture yields, I question Monsanto’s position in the market. Will Monsanto be able to distance themselves enough from the platform so that they create an ecosystem with little conflict of interests when other suppliers of seeds or equipment are involved? Or will an independent third party be able to gain traction and credibility in building a similar platform? Opening their platform for third party developers appears to be a move in the right direction, and I will be interested to see how they navigate the clashes between the company’s interests and the needs of the users of the platform.
Thank you for your post! I find some of the digital initiatives that Walmart is testing very interesting, and would love to see them applied in many grocery stores. But even with the improved in-store experiences, I struggle to see how Walmart’s traditional footprint advantage continues to be an advantage in the future. With Amazon and other delivery options reaching more areas and providing convenience, Walmart, in my opinion, will have a difficult time differentiating. I think maintaining their “Every Day Low Prices” strategy will be critical, and I hope they are able to do so while embracing digital technologies ways that are appropriate for their business model.
As you greatly point out, this is a critical time for print media, and has been for a while. Although I understand that the new digital media presents significant challenges, I wonder how much could this “powerhouses” leverage their heritage and brands to create a strong online presence. As you point out, many have invested in content for social media, but my worry is that they do so by following the same approach they did in print. Social and digital media is increasingly interactive, and thus require fast communication capabilities that were not as necessary in the age of print media. Hiring the right talent and fostering the right culture inside “legacy” companies is, in my opinion, critical at this point.
This is a really interesting way for a car manufacturer to interact with potential customers. Before reading the post, I would have thought that physical interaction with the car was important for customers in order to finalize a sale, the Audi case shows that for many that is not the case. My concern about this model, though, is the effect of the experience on customers that value the driving experience and need the physical interaction. Will digital technologies one day fully replicate the experience? I think that for brands with a value proposition centered around driving, this may prove to be a significant challenge.