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Seven forces at work

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Broken link? Global politics and new media Perfect transmissions: evil Bert Laden Postcolonial theory and global media The information empire Citizens, digital media, and globalization The culture of the digital self Identity theft and media The aesthetics of distracting media The good, the bad, and the virtual Psychoanalysis, the body, and information machines more Global politics and new media Perfect transmissions: evil Bert Laden Postcolonial theory and global media The information empire Citizens, digital media, and globalization The culture of the digital self Identity theft and media The aesthetics of distracting media The good, the bad, and the virtual Psychoanalysis, the body, and information machines Digital commodities in everyday life Who controls digital culture?

Everyday virtual life Consumers, users, and digital commodities Future advertising : Dick's Ubik and the digital. Online Table of contents only Broken link?

Digital Culture

In the Library Request this item to view in the Library's reading rooms using your library card. Details Collect From YY They have come to expect payment systems that work across borders, global distribution, and a uniform customer experience. As the spread of the Internet and digital technologies reshapes the competitive landscape of industries, it is also revolutionizing the traditional flows of goods, services, finance, and people. All this is happening at breakneck pace exhibit , as we showed in a recent report, Global flows in a digital age: How trade, finance, people, and data connect the world economy.

The pace will only accelerate as global Internet traffic, which has expanded fold since , surges an additional 8-fold by Digitization transforms global flows by vastly reducing marginal production and distribution costs in three ways. The first is the creation of purely digital goods, in both the B2B and B2C realms. The volume of digital consumer goods, from music to movies, transported and reproduced around the globe continues to soar. Apps that allow consumers to purchase virtual goods and digital services on mobile devices have become a significant industry. For businesses, digitization is transforming even physical flows of people into virtual flows, enabling remote work through tools for global collaboration.

In some manufacturing sectors, it is now possible to ship a digital design file for 3-D printing and then make the product where it will be consumed instead of producing centrally and shipping the physical goods.

Knowledge Machines: Digital Transformations of the Sciences and Humanities

Online reviews or customer ratings, for example, help consumers decide whether to purchase products. Increasingly common digital tags and sensors connected by wireless communications can identify objects and collect information about transactions, the location of a product, and when it is used. Such wrappers greatly improve processes ranging from payment systems to supply-chain management.

Imagine Apple trying to assemble the iPod, with parts from many different countries, without digital tracking and supply-chain-management tools. Finally, digitization is creating online platforms that bring efficiency and speed to production and cross-border exchanges. Proliferating e-commerce platforms allow greater and faster flows of goods and services to new markets and help smaller players participate in expanding global trade. New online markets in information flows facilitate innovation through crowdsourcing, while other platforms let designers upload product designs, use 3-D printers to create physical items, and manage logistics and payments.

One global bank has aligned its offerings with the borderless strategies of its major customers by creating a single website, across 20 countries, that integrates what had been an array of separate national or product touch points. A US technology company has given each of its larger customers a customized global portal that allows it to get better insights into their requirements, while giving them an integrated view of global prices and the availability of components.

In transportation, digitization a combination of mobile apps, sensors in cars, and data in the cloud has propagated a powerful nonownership model best exemplified by Zipcar, whose service members pay to use vehicles by the hour or day. As the digital model expands, auto manufacturers will need to adapt to the swelling demand of car buyers for more automated, safer features. Rethinking strategy in the face of these forces involves difficult decisions and trade-offs. Here are six of the thorniest.

The growth and profitability of some businesses become less attractive in a digital world, and the capabilities needed to compete change as well. Consequently, the portfolio of businesses within a company may have to be altered if it is to achieve its desired financial profile or to assemble needed talent and systems. Tesco has made a number of significant digital acquisitions over a two-year span to take on digital competition in consumer electronics. Beauty-product and fragrance retailer Sephora recently acquired Scentsa, a specialist in digital technologies that improve the in-store shopping experience.

Scentsa touch screens access product videos, link to databases on skin care and fragrance types, and make product recommendations. Companies that lack sufficient scale or expect a significant digital downside should consider divesting businesses. Some insurers, for instance, may find themselves outmatched by digital players that can fine-tune risks. In media, DMGT doubled down on an investment in their digital consumer businesses, while making tough structural decisions on their legacy print assets, including the divestment of local publications and increases in their national cover price.

Home Depot continues to shift its investment strategy away from new stores to massive new warehouses that serve growing online sales. This year it bought Blinds. Incumbents too have opportunities for launching disruptive strategies.


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One European real-estate brokerage group, with a large, exclusively controlled share of the listings market, decided to act before digital rivals moved into its space. It set up a web-based platform open to all brokers many of them competitors and has now become the leading national marketplace, with a growing share.

In other situations, the right decision may be to forego digital moves—particularly in industries with high barriers to entry, regulatory complexities, and patents that protect profit streams. Between these extremes lies the all-too-common reality that digital efforts risk cannibalizing products and services and could erode margins.

Yet inaction is equally risky. In-house data on existing buyers can help incumbents with large customer bases develop insights for example, in pricing and channel management that are keener than those of small attackers. Brand advantages too can help traditional players outflank digital newbies. While in the past, there may have been one or two new entrants entering your space, there may be dozens now—each causing pain, with none individually fatal. PayPal, for example, is taking slices of payment businesses, and Amazon is eating into small-business lending.

Companies can neutralize attacks by rapidly building copycat propositions or even acquiring attackers. Santander, for instance, recently went into partnership with start-up Funding Circle. The bank recognized that a segment of its customer base wanted access to peer-to-peer lending and in effect acknowledged that it would be costly to build a world-class offering from scratch.

A group of UK banks formed a consortium to build a mobile-payment utility Paym to defend against technology companies entering their markets. British high-end grocer Waitrose collaborated with start-up Ocado to establish a digital channel and home distribution before eventually creating its own digital offering. Digital technologies themselves are opening pathways to collaborative forms of innovation. As digital opportunities and challenges proliferate, deciding where to place new bets is a growing headache for leaders.

Diversification reduces risks, so many companies are tempted to let a thousand flowers bloom. The alternative is to double down in one area, which may be the right strategy in industries with massive value at stake. A European bank refocused its digital investments on 12 customer decision journeys, 6 6. A leading global pharmaceutical company has made significant investments in digital initiatives, pooling data with health insurers to improve rates of adherence to drug regimes.

It is also using data to identify the right patients for clinical trials and thus to develop drugs more quickly, while investing in programs that encourage patients to use monitors and wearable devices to track treatment outcomes. Nordstrom has invested heavily to give its customers multichannel experiences. It focused initially on developing first-class shipping and inventory-management facilities and then extended its investments to mobile-shopping apps, kiosks, and capabilities for managing customer relationships across channels.

Integrating digital operations directly into physical businesses can create additional value—for example, by providing multichannel capabilities for customers or by helping companies share infrastructure, such as supply-chain networks. However, it can be hard to attract and retain digital talent in a traditional culture, and turf wars between the leaders of the digital and the main business are commonplace.

Moreover, different businesses may have clashing views on, say, how to design and implement a multichannel strategy. One global bank addressed such tensions by creating a groupwide center of excellence populated by digital specialists who advise business units and help them build tools. The digital teams will be integrated with the units eventually, but not until the teams reach critical mass and notch a number of successes. Wal-Mart Stores established its digital business away from corporate headquarters to allow a new culture and new skills to grow. Hybrid approaches involving both stand-alone and well-integrated digital organizations are possible, of course, for companies with diverse business portfolios.

Advancing the digital agenda takes lots of senior-management time and attention. Customer behavior and competitive situations are evolving quickly, and an effective digital strategy calls for extensive cross-functional orchestration that may require CEO involvement. One global company, for example, attempted to digitize its processes to compete with a new entrant.


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  5. Meanwhile, a business unit under pricing pressure was leaning heavily on functional specialists for an outsize investment to redesign the back office. Eventually, the CEO stepped in and ordered a new approach, which organized the digitization effort around the decision journeys of clients. Faced with the need to sort through functional and regional issues related to digitization, some companies are creating a new role: chief digital officer or the equivalent , a common way to introduce outside talent with a digital mind-set to provide a focus for the digital agenda.

    Walgreens, a well-performing US pharmacy and retail chain, hired its president of digital and chief marketing officer who reports directly to the CEO from a top technology company six years ago. Her efforts have included leading the acquisition of drugstore.

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    Relying on chief digital officers to drive the digital agenda carries some risk of balkanization. That may be necessary if digitization is a top-three agenda item for a company or group, if digital businesses need substantial resources from the organization as a whole, or if pursuing new digital priorities requires navigating political minefields in business units or functions. The emergent nature of digital forces means that harnessing them is a journey, not a destination—a relentless leadership experience and a rare opportunity to reposition companies for a new era of competition and growth.

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