The challenges posed by digital disruption can also be excellent growth opportunities. Yet to accomplish growth in the face of total industry disruption, firms should ask themselves how they plan on investing in their digital enablement – and how that plays into their business objectives and long-term plans for competitive success. This means building for change through agility and being able to pivot strategy in order to handle new market entrants and also to enter markets ripe for investment. At Virtusa, we’re past understanding the potential that Digital provides, we’ve helped our clients actualize and generate real benefit across their business through technology enablement.
The 4 Challenges your company is facing when looking to create and implement its digital strategy:
- Differentiating and defending market share – Due to new entrants disrupting products, services, and processes, companies will no longer be able to master all aspects of their business and will need to decide on the value proposition they wish to compete in: Service, Cost, Platform, or Product Innovation
- Using disruption to grow faster or enter adjacent businesses – Digital disruption enables companies to leapfrog competitors and the opportunity to choose a product line or business segment and leverage adjacencies and, through focus, become the industry leader in existing and new areas.
- Envisioning your future digital business – A digital company needs to evolve and innovate rapidly across products and services, customer experience, and cost as industry forces drive increased competition.
- Simplifying offerings to launch new business – Companies of the future will be intuitive, automated, and provide simple product offerings. Achieving this vision requires firms to decide where to simplify and where to lean.
To respond to these challenges, business should learn how to simultaneously navigate the four business pillars – product innovation, service experience, cost, and platform – and leverage company investments in them to achieve business differentiation that provides tangible growth outcomes.
Product innovation, service experience, and cost have been the traditional pillars of competition, and companies have largely succeeded by focusing on one as the basis of their competitive advantage. For example, Fidelity Investments disrupted the investments market with a focus on product innovation. IBM took pride in its focus on service experience, and Wal-Mart is an example of competing on cost. However, digital has leveled the playing field and the inherent advantage of any of these strategies is diminishing. Platform businesses that focus on building large customer bases and offering them a broad suite of products and services are challenging traditional companies who are focused on only one of these pillars as the basis of competition.
Heavily investing in one pillar inherently means trading off the ability to invest in others. We work with you to help you understand how to approach these pillars and the implications of choosing to lead, be good, or stay competitive in each of these categories.