Driving Digital Strategy

Sunil Gupta
May 2019

©Sunil Gupta| HARVARD BUSINESS SCHOOL 2

 Technology Revolution

Take it or it will call your mother I see you Please print a heart

©Sunil Gupta| HARVARD BUSINESS SCHOOL 3

 Rapid Adoption by Consumers
Years to Reach 150 million Users or Units

89
90

80

70

60

50
38
40

30

20 14
7 5 5
10 3 3 1
0
Telephone Television Cellphones iPod (2001) Facebook iPhone WhatsApp iPad (2010) WeChat
(1876) (1928) (1983) (2004) (2007) (2009) (2011)

©Sunil Gupta| HARVARD BUSINESS SCHOOL 4

 Digital Leadership and Transformation

©Sunil Gupta| HARVARD BUSINESS SCHOOL 5

Scope: What business are you in?

Market Books and

Place Electronics
AWS Kindle
Echo
VOD
Ad Network
Studio Search

Phone AppStore

©Sunil Gupta| HARVARD BUSINESS SCHOOL 6

 New Rules of Strategy Multiple
Customers
Network Effects: Network Effects
Create Virtuous Cycle and Complements

Whatsapp, Facebook WeChat

Amazon marketplace Amazon
Uber Paytm

Single Multiple
Products Traditional Strategy: Complements: Products
Make it cheaper or better Razor-Blade Strategy
Automobiles Echo and commerce
Consumer products Kindle and ebooks
Financial services iPod and iTunes

©Sunil Gupta| HARVARD BUSINESS SCHOOL Single 7

 US Foods

©Sunil Gupta| HARVARD BUSINESS SCHOOL 8

 US Foods

Product Complements Network

Restaurants

US Foods

Food Suppliers

©Sunil Gupta| HARVARD BUSINESS SCHOOL 9

 Leveraging New Capabilities

Current Business New Capability New Business

Online Retail Marketplace AWS

Marketplace Search Advertising

Warehousing Computer Vision Amazon Go

Taobao Escrow Account Wealth Mgmt.

©Sunil Gupta| HARVARD BUSINESS SCHOOL 10

 Reinventing Business

1. Redefine business scope and competitive advantage

©Sunil Gupta| HARVARD BUSINESS SCHOOL 11

 …becoming a “showroom” of Amazon

©Sunil Gupta| HARVARD BUSINESS SCHOOL 12

 Reinventing Business

1. Redefine business scope and competitive advantage

2. Find new ways to create and capture value

©Sunil Gupta| HARVARD BUSINESS SCHOOL 13

©Sunil Gupta| HARVARD BUSINESS SCHOOL 14
 Car Dealerships

©Sunil Gupta| HARVARD BUSINESS SCHOOL 15

 Retail Industry

©Sunil Gupta| HARVARD BUSINESS SCHOOL 16

 DBS Bank, Singapore

©Sunil Gupta| HARVARD BUSINESS SCHOOL 17

 Solving Logistics Problem in India

©Sunil Gupta| HARVARD BUSINESS SCHOOL 18

 Reinventing Business

1. Redefine business scope and industry boundaries

2. Find new ways to create and capture value

3. Start with customer pain points and work backwards

©Sunil Gupta| HARVARD BUSINESS SCHOOL 19

 Beyond Products : Product as a Service

©Sunil Gupta| HARVARD BUSINESS SCHOOL 20

 What can LVMH learn from Michelin Tires?

©Sunil Gupta| HARVARD BUSINESS SCHOOL 21

 Can car companies do the same?

©Sunil Gupta| HARVARD BUSINESS SCHOOL 22

 Porsche

©Sunil Gupta| HARVARD BUSINESS SCHOOL 23

 Reinventing Business

1. Redefine business scope and competitive advantage

2. Find new ways to create and capture value

3. Start with customer pain points and work backwards

4. Transition to product-as-a-service

©Sunil Gupta| HARVARD BUSINESS SCHOOL 24

 Nest Thermostat

©Sunil Gupta| HARVARD BUSINESS SCHOOL 25

 Battle for the Home

©Sunil Gupta| HARVARD BUSINESS SCHOOL 26

 John Deere

• Weather maps
Weather
Data • Weather forecast
• Rain, humidity, temperature sensors

• Seed database
• Farm performance
• Tractors Farm Farm Seed database
• Tillers Equipment Management Optimization
• Seed optimization
• Planters application

Irrigation • Field sensors

• Irrigation nodes
• Irrigation application
©Sunil Gupta| HARVARD BUSINESS SCHOOL 27
Source: Adapted from Michael Porter and James Heppelman, “How smart connected devices are transforming
competition,” Harvard Business Review, November 2014.
 Banks as Platforms?

©Sunil Gupta| HARVARD BUSINESS SCHOOL 28

 Reinventing Business

1. Redefine business scope and competitive

advantage

2. Find new ways to create and capture value

3. Start with customer pain points and work

backwards

4. Transition to product-as-a-service

5. Build product-as-a-platform
©Sunil Gupta| HARVARD BUSINESS SCHOOL 29