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- Cryptocurrencies
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- Industry
- Geography
Even though the internet has been there for nearly three decades now, executives are still in a run figuring out how to use digital technology to advance their business strategy. The new tech trends such as artificial intelligence, data analytics, and the internet of things are the most commonly heard and used technologies that are changing the way business leaders are thinking of the strategy.
Before, the companies were focused on digital technology that they own and had exclusive rights to use it as a critical driver of competitive advantage. But with the advancement of cutting-edge technology is being developed that can be used as a shared resource where the core digital technology is freely available to anyone who wants to use it and is also being presented as open-source software. And these days, apart from the digital technology, companies are also considering their user data and their tech employees as the primary drivers of potential advantage to boost their business strategy.
Some of the companies consider digital technology as a mere and different type of capital investment that does not impact their way of doing things. But on the other side, firms are adopting new tech trends knowing that they have a great potential to bring significant changes with regard to customers and their experience. Technology can change the way the company can serve, the skills they employ, and can add value to their organizational structures. The latter approach involves higher costs and time horizons at the same time better and higher returns too.
Most of the companies are turning towards pricing algorithms to set prices, especially conjuring the online markets with the hit of COVID-19. Pricing algorithms are capable of enabling better-targeted prices, but they also can fundamentally alter how a company competes in the market. The company adopts a pricing algorithm that can transform the nature of price competition. This can actually change the direction of a firm, requiring additional investments in IT, modified production decisions, and different personnel, among other changes.
With the help of technology, companies can now experiment in many ways such as in competitive decisions like product positioning, pricing, and which markets to serve. Prior, these decisions depended on master plans and involved time horizons measured in decades. But now, online platforms, ubiquitous data, and algorithms that allow firms to test these decisions quickly, sometimes in a matter of months or weeks.
The competition will intensify in many digitally-enabled industries as the cloud makes it even easier for competitors to enter a market, with Disney and HBO streaming to compete with Netflix. The major cloud providers will themselves inevitably compete with and threaten their own customers and partners as they expand their offerings. As companies incur increasingly massive cloud usage costs that threaten their own profitability, they should make sure they do not get locked in with one cloud provider. Using multiple cloud providers ensures that they can always switch to the lowest cost option.
