Abstract

Despite their best efforts, many businesses cannot reinvent themselves in the era of the digital
revolution. Sunil Gupta, a Harvard professor who has worked with some of the world's most well-
known companies, has published a new book called Driving Digital Strategy, containing essential
insights gained from his years of experience.

Introduction

The introduction was fabulous. Typical mistakes create separate digital divisions incapable of
delivering long-term impact, conducting experiments that do not scale and concentrating on
operational rather than strategic change. The four parts of the book, each with three chapters, are
then presented. After reading the first few chapters, I was eager to read the remainder of the book.

SECTION 1: REIMAGINE YOUR BUSINESS

Chapter 1: Business Scope

The evolution of Amazon's products and services is discussed in the first chapter. In the second case
study, John Deere, a farm equipment company that evolved into a farm-management firm,
introduced valuable farmers' data collection and analysis services. The chapter then returns to
Amazon, recommending three skills that helped the company thrive (customer insights, logistics and
tech infrastructure). It discusses how complementary and connected products improve stickiness,
using Paytm and WeChat as examples, and how network effects have grown significantly as the
digital age has advanced.

The chapter concludes with a short discussion of whether business scope expansion should be
restricted, using an Apple vehicle as an example. While the case examples were insightful, the
majority of the conversation was on Amazon and its efforts. I'm afraid I'm incapable of summarizing
Amazon's digital strategy lessons. After reading Brad Stone's comprehensive history of Amazon's
origins and growth ('The Everything Store,' this chapter's appraisal of Amazon's competitive
advantages did not ring true. There was no discussion of market domination or how other e-
commerce businesses use data to forecast product demand and pre-stock correctly.

Chapter 2: Business Model

The book's biggest chapter is devoted to business models, with case studies illustrating critical
principles for current business models. The chapter discusses the components of marketing, social
media, and experience-based strategy. According to the study, product differentiation is dwindling in
today's market, pushing companies to rely on services for profit and growth.

This chapter included no digital material. For example, I was searching for a debate on how digital
publishing has affected the advertising income and music CD sales of the New York Times. The first
chapter provided an excellent explanation of how it used its assets and reputation and created
effective partnerships.

Chapter 3: Platforms and Ecosystems

Goldman Sachs stunned the industry by introducing its own SIMON product to boost stickiness and
earn a fee on rivals' sales (SIMON allows users to analyze risk or construct portfolios). Chapter 3
teaches you how to achieve critical mass, facilitate transactions, manage partners, and administer
governance. Payment technology is attracting considerable interest. He makes an intriguing
argument about the degree to which a platform should be accessible to external input and growth
(think Android vs IOS). Finally, the section addresses Facebook's governance issues briefly during the
2016 election.

Overall, I felt the book did a good job concentrating on this chapter, and the story about the Gelato
was an excellent, surprising example. In my view, the chapter lacked a link to "digital strategy." Some
comments regarding supporting platforms may have been made in the context of conventional
shopping malls, but I was looking for the digital component in this book. For example, we provide
physical and data infrastructure in the digital realm, allowing third parties to share data, including
consumer clickstream data. Even if a business has a modest number of EU clients, it must consider
geopolitical issues such as the GDPR. We must select which technologies to make accessible to
consumers of our platform (e.g. Apple has a proprietary language for its IOS store while listing on
Amazon requires minimal technical expertise). While most of these are tactical rather than strategic,
they are potential subjects for a digital strategy book.

SECTION 2: REEVALUATE YOUR VALUE CHAIN

Chapter 4: Rethinking R&D and Innovation

This chapter examines open innovation, often known as crowdsourcing challenging issues. It all
starts with NASA revealing a significant issue with the International Space Station. Surprisingly,
almost half of the 2k+ submissions beat NASA's solution. The chapter discusses several successful
crowdsourcing efforts, why people choose to participate, and some practical suggestions for
developing your crowdsourced issue. This chapter provided an excellent summary of a growingly
important subject that was not immediately related to digital. Kaggle might have been included in
the list.

Chapter 5: Operational Excellence

The event with the exploding Samsung Note 7 is used to illustrate quality control. The following
section introduces Industry 4.0, which is described as a manufacturing paradigm shift based on
decentralized machine-to-machine communication. It includes recent Siemens and General Electric
(GE) developments, including GE's Predix platform, which is now widely available. 3D printing is
given its page first, followed by virtual and augmented realities (VR/AR), giving them a thorough
introduction and stressing their importance. The chapter examines services, including how Goldman
Sachs uses machine learning in its IPO process, Deloitte employs it in audits, and law companies
benefit from marketplace platforms and text-based AI.

Chapter 6: Omnichannel Strategy

Overall, this chapter offers helpful omnichannel management advice to avoid cannibalization and
displeasing third-party distributors. The case examples that were discussed offered clear insights.
Interesting, although more focused on specific technical solutions than general applicability
concepts. The concept of 'testing things out at a store would have been fascinating to investigate
further, especially in his prior subject of drivers who purchase cars with little or no test drives
(chapter 2).

The following section analyzes store beacons' poor performance. It includes particular digital
solutions developed by businesses to solve four customer pain issues connected to purchasing in
physical shops (finding things, trying things, paying for something, and returning something). There
are two more towards the end:

SECTION 3: RECONNECT WITH YOUR CUSTOMERS

Chapter 7: Acquiring Customers

He started with Chase's Sapphire Reserve card, whose 2016 sign-up incentives were so attractive
that the promotional spend was estimated to take five years to recoup. Because of the affluent
demographics and high customer retention rates, Chase could justify the expenditure and cross-sell
additional products.

Another point stated in the book's section on client lifetime value is that long-term metrics such as
spending and retention are more significant than short-term indicators (acquisition cost). The author
then provides 'The 200-20 Rule,' which was the most useful new finding in the book. In conclusion,
the 80-20 rule overlooks certain customer losses when keeping just the top 20% of customers would
provide a 2000% return (the graphs provided make this clear). The 200-20 rule focuses on attracting
the right customers. The first section ends with reasons why determining customer value is
challenging.

The "How to Acquire" section includes four key steps: online search, purchase, product use, and
advocacy. On the other hand, the personalization of marketing materials has assisted companies in
better recognizing and responding to critical moments.

Chapter 8: Engaging Consumers

Here's how to engage customers without annoying them. It provides data demonstrating that most
modern digital advertising is unwanted and ineffective, particularly on mobile devices. It includes
two new case studies:

Chapter 9: Measuring and Optimizing Market Spend

Following an introduction of five frequently used attribution techniques, an A-B test (bank) case
study is presented. There's also a section on how a choice will affect you in the long run. To evaluate
the offline effect, Facebook's Lift tool employs A/B testing and some businesses' in-house research
on the efficacy of marketing campaigns across media. This section lacks practical guidance and
ignores issues like cookie deletion, 'walled-gardens,' and cross-device activity. As a consequence, the
chapter leans more toward the theoretical than the practical.

SECTION 4: REBUILD YOUR ORGANIZATION

Chapter 10: Managing Digital Transition

This chapter focuses on top-level strategy change. Starting from scratch is much more difficult than
leaving an incumbent with existing assets and demanding shareholders. The chapter begins with two
instances of businesses that took risks to combat revenue declines: He compares the digital
changeover to mid-flight engine changes. The author discusses Adobe's difficult transition phase, as
well as how management communicated internally and publicly. Over a thousand Adobe customers
signed a Change.org petition against the company's new subscription model, showing the turmoil.
Adobe's stock increased 400% in the five years after the introduction of this massive effort.

Chapter 11: Design and Organization for Innovation

Finansbank, a Turkish bank that created Enpara, a digital-only bank, is the first case study. Due to a
cultural clash, Finansbank's leadership was unable to reintegrate Enpara into the mother ship. Ajay
Banga, President and CEO of Mastercard, is featured in the following case study (MC). The majority
of the chapter describes MC's innovative thinking. The design and approach of MC's innovation
laboratories and accelerators must be consistent. They focus on three expansion areas (core,
growth, and development) using three guiding operational concepts (B2B2C, govts as critical
stakeholders, and cybersecurity). MC focuses on five areas to accelerate innovation.

Innovation through an internal but independent lab

Exogenous ecologies are used. Create new laboratories and invest in a variety of small-to-medium-
sized companies worldwide.

Joint ventures and direct investment

In response to Dodd-Frank and the Volcker rule, Goldman Sachs developed Marcus, an online
consumer lending instrument, and SIMON, a platform for structured notes (see chapter three). The
Principal Strategic Investment Group, which oversees a billion-dollar portfolio, is a venture capital
and private equity mix. At the same time, the Digital Strategy Group brings together business
division executives to guarantee project coordination and execution. Overall, I found the Mastercard
and Goldman Sachs case studies quite informative in managing innovation inside a big incumbent.

Chapter 12: Skill, Capability and Talent Management

Apart from aggressively pushing a product called 'Knack,' I thought this chapter to be very
uninteresting. The first section of this last chapter discusses basic AI concepts and speculates about
job automation. These few pages are great cocktail party conversation starters, but I don't see much
practical value for the reader.

Part 2 focuses on talent: recruiting, training, evaluating, and retaining employees. It addresses the
demand for more digital expertise as well as cutting-edge digital technology for candidate screening.
According to the report, a large software development company "evaluated hundreds of thousands
of IT employees and discovered no significant relationship between a college degree and job
success." This section is presently focused on Knack, a Silicon Valley startup. The following section on
training makes use of the Knack product as an example.