Digitalization for Value Creation by Andreas Weber

Author:Andreas Weber
Language: eng
Format: epub
ISBN: 9783030362294
Publisher: Springer International Publishing

Considering how you can improve your products and increase the customer benefit.

Imagining based on scenarios how you can quickly raise and reduce quantities.

And how you can better anchor yourself in the value chain using data, trusting that you can optimize your resources with additional software and data links in order to grow both vertically and horizontally.

You do not need any elaborate technologies to make your business model scalable—the Internet should suffice to extend your agitation radius. Once there was only one toy retailer who sold goods in a village. It had a monopoly in the sector in its region. Children pressed their noses up against the store window just to get a look at the miniature railway set. Mothers bought Christmas and birthday gifts there, the retailer was their go-to supplier for many years. Now a new anonymous online retailer is offering its goods, e.g., train sets, dolls, arts, and crafts materials, etc.—and doing so on a larger scale. It draws in the customers from the village online, and it will sell its goods anywhere else in the world too. Looking a little further down the line: the small store on the corner has transformed from a brick-and-mortar store into an online retailer and is on its way to becoming a completely invisible company in the depths of the Internet. It looks instead for distribution partners on other continents who will take care of sales on its behalf.

The former store owner is integrating himself in a value chain, and he is willing to forgo his name in favor of a new business model. For him it is merely a question of product sales—not an image. The “Made in Germany” label is no longer relevant, especially in the eyes of the younger generation. They want to see a customer benefit—not the quality seal. They go online and order what their friends have recommended to them on social networks. Brand loyalty is a value that is no longer relevant, long since having been replaced by online communication. Company marketing departments will have to come to terms with this too. After all, there are new standards in advertising too. Review portals, tweets, posts, and even automatically controlled social bots influence customer behavior. Opinions are formed online.

Amazon is servicing this development par excellence. A customer needs a washing machine, orders it from the Internet giant, and has little interest in whether this washing machine came from Media-Saturn’s warehouse stock or an electronics store in Leipzig. All that matters to the customer is that the price is right and that the delivery happens straight away. These kinds of multichannel platforms regulate demand and do not rely on person-to-person customer communication. The aim of this is to use data to determine customer requirements and emphasize benefits. If we continue to spin this web of the future economy, only non-channel platforms will supply customers, and every single process along the digital value chain, from raw materials purchasing right through to logistics, will take place on an automated basis.

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