Nowadays, many companies plan and execute digital strategies to compete in a competitive environment, but fail. And the reason is ignorance of digital evolution and its potential impact on the company revenues or indeed survival. In recent years, digital strategies took a major change and if you are not willing to adapt to those changes, you may lose the game.
According to expert Lameen Witter, before you frame digital strategies, it is very important to understand why most digital strategies fail.
Digital strategy is misinterpreted by most companies. Some associate it with a few digital projects or marketing. Digital is actually a free ability to connect multiple devices, people and services universally. Soon with IOT, it would bring more surprises and innovation. However, due to the misinterpreting the definition of digital, it will be difficult for a company to link the strategy to their core business.
Misinterpret The Economic Of Digital
Digital is abolishing ‘economic rent’ which is revenue in excess of the cost of capital. Unbundling profitable services are allowing customers to buy only the things they are willing to buy. They have unlimited choice and information. Hyper-scale is minimal expenses to almost zero. For instance, to include a store it costs Wal-Mart millions. While Jack Ma of Alibaba can do likewise with one server. Therefore the main organizations can rule the market and take a lot of the benefits.
Assumption That threats will come only from new players
If you think that the real threat comes from the new entrants and, you might be wrong. Often the real challenge comes when a smart dominant industry player is aiming to self-cannibalize and disrupt the current situation. According to experts, incumbents moving forward with confidence can achieve significant share and push an industry to the peak.
Overlooking Ecosystem Platforms
Traditional strategies that ignore the ecosystem platform are likely to face many challenges. Ecosystem platform allows digital players to compete and lead in the industry and sector borders. Amazon has reached to new heights from selling books to selling almost everything. Similarly, the tech giants like Alibaba has created platform ecosystems that are allowing them to grow into financial sectors and many other sectors. No doubt, these platform plays can evolve the dynamic of the whole business sector in a short period of time.
Lost The Duality Of Digital
According to many leading organizations, the digital revolution is all about searching for something new. While searching for or working on a new business model, they overlook the need to digitize their current business. Disruption is irregular, and ignoring the existing business is not something most will choose. The pressure of digital means that businesses will need to adapt and repeat to achieve success.
According to Lameen Witter, these are the reasons why most digital strategies fail. Therefore, it is advisable to consider these pitfalls before framing your digital strategies. After all, who doesn’t want a win-win situation in the competitive world?