Dalelorenzo's GDI Blog
1May/210

6 Elements Of Digital Brand Dominance

6 Elements Of Digital Brand Dominance

Video streaming is just one example of a digital economy where rivalry is intensifying. Many so-called legacy companionships are caught up in a battle with digital challengers, and so far, the born-digital corporations have been eating their lunch. Walmart( and every other physical sales outlet, from Macy’s to Best Buy) is in a constant struggle with Amazon, and banks and credit card companies are squaring off against PayPal and Apple Pay.

Meanwhile the digital monsters are battling one another for market share and dominance: Amazon’s AWS versus Microsoft’s Azure vapour services. Customer goods business, retailers, and manufacturers have hundreds of e-commerce start-ups nibbling at the edges of their market share with niche produces sold immediately to buyers online. Think of P& G’s Gillette razors sold in stores versus the online subscription-based Dollar Shave Club that sells direct to consumers.

The common yarn in these erupting debates is digitization. It has upended the very nature of competition today, and constituted twentieth-century ways of "ve been thinking about" competitive advantage obsolete.

The old-fashioned proverb “stick to your knitting, ” for example, a conversational version of “build on your core skill, ” tends to narrow a company’s imagination. Yet a forceful resource is crucial for commanders today. Netflix, Amazon, Facebook, and Google would not be what they are if their CEOs and executive teams has not been able to imagined a future that did not yet exist.

A clear goal of the competitive landscape has indicated that some of the early generalizations about “first mover advantage” and “winner takes all” are not holding up, especially as digital giants challenge each other.

First movers may be able to scale up fast, but others are certain to enter whatever large market cavities they start. For that reason, wins really don’t take it all, at least not forever. And if new adversaries don’t enter the fray quickly enough, antitrust government regulators may step in.

As early and dominant as Amazon has been in e-commerce, it is hardly alone. Alibaba, Tencent, and JD.com are ferocious global competitors, and traditional retailer Walmart is barreling into the online space in a bigger way since its possession of Jet.com and its majority stake in Flipkart, India’s largest e-commerce player. It has been gaining friction by connecting its online sales with physical storages. In Brazil, B2W has regarded Amazon, a relative beginner, at bay.

The outcome of these competitive battles is uncertain. But some fundamental differences in how digital business participate have become clear. When one dissects the Netflixes, Amazons, Googles, and Alibabas of the world, we see that they have certain elements in common 😛 TAGEND

They imagine a 100 x busines gap that doesn’t more exist. They imagine an end-to-end experience in a person’s life--as the individual roams, munches, shops for good, or aims medical care or leisure -- that could be greatly improved, and if "its been", that a prodigious number of parties would want. They think about how technology might help to offset the seemingly inconceivable happen. They focus on the end user even if middlemen lie between them and the consumer. They know that if their provide is right for the end user, they can scale up very quickly, because oath spreads roughly promptly. Netflix believed that a huge number of parties would prefer to discover and experience videos at their gadget in their homes instead of going to a movie theater and putting up with overpriced snacks and shaking neighbours, or watching Tv at prescribed times set by the entertainment companies or systems. In persons under the age of $ 50 cellphones and ultra-low-cost Internet contacts, as in India, the potential market explodes. They have a digital platform at their core. A digital stage is an expertly sewed together mix of algorithms that store and analyze data for a variety of purposes. It allowed by fast experimentation and fast adjustment of tolls, and makes it possible to reach a huge population globally at negligible incremental payment. Netflix can easily stream its repertoire across geographic frontiers. Algorithms in the categories of artificial intelligence and machine learning can chasten themselves as they learn more about customers’ behavior and preferences, improving personalization and thereby increasing customer loyalty. They have an ecosystem that accelerates their growth. Ecosystem marriages take many forms, such as third-party sellers on Amazon’s website, Uber’s independent motorists, or Apple’s app makes. They permit the company to expand capacity promptly, often with no capital investment on its part. They admit cross-selling to extend innovations to a broader audience. They can also enable a new moneymaking model or supply a capability that is missing. Most ecosystems share data, contributing to the ability to scale up fast. Netflix would not exist without the contents it licensed from its ecosystem, such as the TV line Friends from WarnerMedia and The Office from NBCUniversal. Companies don’t compete against each other--their ecosystems do . Their moneymaking is bind to money and exponential swelling. Digital enterprises is a well-known fact that after a period of intense cash consumption, if the give is successful, returns will turn sharply upward as the incremental cost of the next component sold or customer contributed removes. They focus more on cash than on accounting measurings. Funders who distinguish the existing legislation of increasing returns are willing to ease the liquidity issues in the early going to reap exponential wages later. Decision-making is designed for innovation and raced. The downside of emergence and a principal reason traditional corporations experience diminishing returns is the increased complexity and bureaucracy that come with growth. But increased bureaucracy is no longer a given for companies that have a digital platform at their center. Teams close to the action can make decisions and take action without strata of oversight because they can easily access real-time information. They can move very fast. Accountability is built in because the digital platform makes a team’s progress perceptible to anyone in the company who needs to know. Overhead is kept to a minimum even as the company expands rapidly; Amazon’s general and administrative expenses are just 1.5 percent of revenues. Recruiting people who are self-motivated and can were living in a team-based environment makes the company innovative and agile. Their supervisors drive learning, reinvention, and execution. Digital captains have a different aim of knowledge and competencies than traditional overseers. They have a working knowledge of technology, an expansive imagery, and an ability to link their big-picture pondering with ground-level execution. Their use of data takes execution to a whole new level. And their constant communication with their teams, along with their decisiveness in switch aids, acquires the organization agile. The fluidity of their conjecture drives endless alteration and swelling. They form the modification that leaders of many other fellowships struggle to contend with.

So today’s digital whales and upstarts focus intensely on the experience of an individual consumer and open big brand-new busines infinites. They scale up fast, aggregate data, and draw relevant partners into their ecosystem. Their business representations focus on cash gross margin, money generation, and exponential proliferation. They get hefty sums of currency to fund their growth from VCs and investors who understand the brand-new motifs of money-making. And their highly committed commanders and employees work with purpose and focus relentlessly on what’s next, driving rush, ongoing innovation, and punishment execution.

Contributed to Branding Strategy Insider by: Ram Charan and Geri Willigan, excerpted from their book RETHINKING COMPETITIVE ADVANTAGE with permission from Currency, an imprint of Random House, a separation of Penguin Random House.

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9Mar/210

What to buy in auto & digital themes: Khemka

Pharma would continue to report good doubled toe raise move forward with steady boundaries, says Siddhartha Khemka, Head of Retail Research, MOFSL Auto has been a well discovered tale. Where do you realise fresh buying opportunities? A sector pirouette is happening and in the last couple of fourths, it is happening at a pretty fast pace. Auto did well for some time and then we realized a correction. The monthly crowds have been mostly okay and have been in line with beliefs and some are below beliefs. But the overall anticipation is that with the new year starting things will improve for automobile. Some of the companies have been talking about February being much better and at analysts’ matches and management interactions, there have been talks of improving profit. A case in point is Tata Engine, which was the major gainer out of the automobile bundle, yesterday. We had the managing for the investor’s day for JLR over the weekend and they seem to be focussed on improving profitability, increasing pay and well geared for the future with a start of a lot of EVs in the world markets. Apart from that, some of the auto ancillaries have been doing well in anticipation of impetus from the EV space and talks of PLI scheme for the automobile sphere. Within the OEMs, we like Maruti which is doing good in the passenger vehicle space. M& M is our opted collect to play the agricultural sphere and among the two-wheelers, we like Hero Moto. This is the preferred basket within the OEMs; within the auto ancillaries we like Motherson. We believe they are the best suited to benefit out of the entire world-wide change from the traditional automobiles to EVs. What is your outlook on privatisation of PSU banks? Do you like this theme? Yes. It sounds the government is pretty determined to go through with privatisation of PSUs. A mint of steps are being taken despite the times and postponements for umpteen eras for Air India privatisation. BPCL disinvestment was supposed to happen last year but got spread. But now the government has met its planneds very clear and are taking steps in the right direction. They are taking those steps -- be it in Concor or in Shipping Corporation. Now BPCL is selling off its stake in Numaligarh refinery as that division needed to stay within the public space. This paves behavior for BPCL to be privatised and this would be one of the biggest privatisations. We certainly like this theme. Historically, a good deal of these PSU firms are not that efficient. They has not been able to been at the forefront of growth. The only thing that they offer is appreciate in terms of trading at a much-much discount to some of the other peers. With the private participates coming in and turning around the business in terms of efficiency, profitability further improve and hence these evaluations. We have been positive on the OMCs for some time now. BPCL continues to do well and we is confident that with the Numaligarh refinery transaction at a much better valuation than earlier expected, the overall mark for these other refining enterprises is caused and hence that is a big positive step for BPCL. How are you looked at the numbers from the pharma space? Will we meet strong domestic as well as international growth across the board? Pharma has been reporting strong amounts for the last three consecutive quarters and upright pandemic, things have improved for the companies not only on the domestic front but including information on the international front with the US FDA become much more lenient in making approbation for flowers and concoctions. We have identified a strong product pipeline for a lot of these companies which are not related to Covid, but rather lifestyle cankers for which we will have heavy demand going forward. A bigger challenge for the pharma opening was the pressure on toll realisation which has easy off a lot post the pandemic. A fortune of raw material expenditures have come down leading to improvement in perimeters. We accept pharma would continue to report good double toe proliferation going forward with the continuous margins and that should lead to good returns from the cavity. Are there any broths in the brand-new economy gig frolic gap that you would propose? Does it interest you? Yes, this is a space which is a niche play and it is doing very well. This is a digital theme although different corporations are in separate segments. Some of the companies within this space that we like are IndiaMart which is in the B2B space, which is where JustDial has just participated. We are seeing how the valuation had run up for IndiaMart because of the scarcity payment that it was getting and which is now getting distributed with a second player like JustDial getting in. While we continue to like IndiaMart, we have lowered the rating to neutral having regard to the high-pitched valuation. On digital, we have recently established coverage on a brand-new stock -- SBI Cards. This is mainly a play on the increasing digitisation in terms of events which have accelerated announced the pandemic. SBI Cards is the second largest player in the Indian card space and it has the benefit of the parentage of SBI and payed its access to the client base of SBI, has received continuous growing in the past. The financials are pretty strong and the valuations are pretty cozy. That is a stock within the new age digital theme that we like. How are you looking at the Tata Group business like Trent, Tata Consumer? Some of these specifies in the consumer basket have doing well. Tata as a group has ascertained a huge modify announce N Chandra coming in as the chairman. The part group of business have refocused towards return fractions and efficient use of capital is the main mantra rather than the earlier intention of expanding and becoming a global leader. So that has helped a lot of these companies. We have assured the change in leadership management and consolidation of the consumer business from Tata Chemicals into Tata Consumer as well as closing of some of the loss-making businesses globally. From here on, the fib for Tata Consumer is about the process of improving margins which will lead to higher growth in net profit. On the top course, the focus is going to be integration, economies of magnitude and cross selling between the two segments. The third new segment that they are launching is Tata Sampann which is also doing well. On the operating leveraging, improvement in EBIT margins because of the its effectiveness and magnitude will lead to higher growth. Similarly, Trent is in a kind of unlock trade. With the lockdown, all these plazas and showrooms were shut and retail stores were closed. With the reopening, we have seen pent-up demand and a lot of these companies are moving towards e-retailing which are likely to be the increment driver in future. Tata Consumer is gonna be a consistent compounder. We still have a buy rating on Tata Consumer. Trent is a long term play given the very high valuation that it commands. Over the last few years, we have seen that the premium valuation exactly continues and they have given consistent 20% plus growth. They should continue to do that in future as well. How are you looking at some of the recent rolls? If you look at some of the recent listings and also include some of the IPOs in the last one year, a lot of these companies are niche firms within their space and some of them were firstly of its nature and that captivated a lot of interest. Another large-scale part is that some of these IPOs are in the midcap space within that Rs 1,000 -2, 000 -3, 000 crore market detonator with an IPO size of about Rs 400 -7 00 crore. It is a usual sugared recognize where you have a huge market liquidity driven rally and there is a lot of appetite for some of these newer, niche corporations and the first-of-its-kind listing fellowships. We have investigated a good deal of demand for such IPOs. The other ingredient is that these IPOs were coming out with good valuations and hence the demand was pretty strong, a case in point the recent listing in the railway segment. Even in the past we have seen some of the better managed railway companies like IRCTC, which is a kind of a monopoly within the rail ticketing platform, has visualized a huge interest even on the IPO post listing and it continues to do well. RailTel is another company which is a play on purvey broadband business through the railway network and that has done well although we do not have a view on that. The MTAR Technologies IPO which kickings off today is a play on not only defence but civil nuclear energy and we understand the numbers being somewhat steady. It is a private firm but a play on defence and we believe it could see steady expansion move forward. The valuations are not that expensive and could see some enumerate incomes. One can look at this IPO from a long-term perspective as well.

Read more: economictimes.indiatimes.com