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In: Economics

Consider Digital businesses progression, and types. Give examples of companies that follow each method of adopting...

  • Consider Digital businesses progression, and types. Give examples of companies that follow each method of adopting digitalization

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Expert Solution

There are four types of digital business progression models; business process transformation, business model transformation, domain transformation and cultural/organizational transformation. Business process transformations refer to digitization of the channels through which business is conducted. Business model transformation has an aspect of wholesome change in fundamental building blocks of value creation and delivery. Domain transformation pertains to exploring capacities of technology to create value that had not been identified by incumbents. Lastly, cultural or organizational transformation exploits adoption of new mindsets, values and beliefs to create value in digital aspects of the business.


Explanation:

Digital business progression or transformation is defined as changes in organizational operations by the incorporation of digital technologies to materially improve performance. Digital business transformation is happening at an unprecedented rate posing both threats and opportunities to businesses. Companies are increasingly embracing digital technologies for fear of missing out on the vast opportunities presented by digital technologies in value creation and delivery that offers a competitive edge within the market (Annacone, 2019). There are four main types of digital business progression; business process, business model, domain, and cultural/organizational. For assured success, implementation must take a multidimensional approach and team effort. Let us now consider each type with appropriate real market examples.

Business Process Transformation.

Refers t the adoption of technology to re-invent operations with an aim of refining quality, lowering production and operation costs, reducing cycle times and ultimately increased efficiency (Annacone, 2019). Operations could also be re-invented by the incorporation of technology to improve customer experience which has a pivotal role in retainment of customers loyalty in today's competitive industries. It may take various models like offering delivery services or adoption of robotics and artificial intelligence particularly in the hospitality industry.

  • Examples: Airbus have developed and adopted the use of heads-up display glasses to facilitate human inspection of airplanes with improved efficiency and quality assurance.
  • Tesla has built a fully automated production factory that specializes in use of robotic arms in car manufacturing with increased precision and efficiency.

Business model Transformation.

Refers to the adoption of technology to refine the fundamental building blocks of how value is delivered in the organization or entire industry (Annacone, 2019). For efficiency, such changes should not happen rapidly or instantaneously but by gradually shifting from traditional practices to allow customers time to internalize changes and hence less opposition to change.

  • Examples: Netflix pioneered a change in the delivery of video content from hard-copy and theater to over the internet purchases and streaming.
  • Uber Technologies' reinvention of the taxi industry through websites and mobile apps in partnerships with individuals.
  • Apple reinvented music delivery through the creation and adoption of i-Tunes.

Domain Transformation.

These involves the use of new technology to create new market segment or exploit previously unexploited markets through creation of products and services that challenge the boundaries of traditional models. It explores into limitless potential of value creation that previous models were oblivious of. The major challenge to this type of transformation is that company executives view it as a reserve of technology companies such as Microsoft and Amazon hence fail to look into possibilities it may present in other industries (Annacone, 2019). Understanding the evolution of technology is thus imperative in identification of new opportunities presented by technological upgrades.

  • Example: Amazon's creation of a new market segment (online).

Cultural/ Organizational transformation.

These refers to the use of technology to influence or reinforce attitudes, mindsets, values and beliefs held by employees that reflect in how they conduct business within the organization. These has resulted to emergent trends in the workplace such as learning cultures, decentralization of decision making and a particular concern towards business ecosystems in efforts of sustainability through corporate social responsibility. Instead of harnessing value from digital advancements, these type of transformation rather focuses on skill innovation and digital mindsets as tools to create value in the digital transformation.

  • Example: Experian, a consumer credit agency transformed its organization by incorporating agile development and collaboration into its workflows and by shift in employee focus from equipment to data (Annacone, 2019)

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