Digital Strategy – Just do!

A digital marketing strategy is a series of actions that will help you achieve the company's goals using online marketing. Therefore, building an effective digital strategy doesn’t need to be difficult.

In simple terms, a strategy is just a plan of action to achieve the desired goal or multiple goals. For example, the overarching goal might be to generate 25% more leads via your website this year than you drove last year. This approach to strategy results in a plan or in the digital world a roadmap. Digital strategy is not an IT strategy and requires a different approach.

Digital technology has been roiling markets and disrupting companies for more than two decades, but despite that lengthy history, incumbents are still struggling to enact and deliver on digital transformations.

The challenges

The first challenge is disruption; digitization is enabling new, disruptive models that aggressively compete with legacy models, putting material pressure on incumbents’ revenue and profit growth.

The second challenge is when companies launch transformations in response to competition, the results are often underwhelming. Based on our a recent worldwide survey of 2,000 incumbent companies across all major industries and countries, the average return on incumbent digital initiatives is below 10% — barely above the cost of capital

The six types of digital strategy

Platform play: engagement in platform strategies, in an attempt to redefine the industry’s value chain so customers and suppliers can interact more directly and benefit from network effects. Platforms have the power to radically alter the way value is distributed in a value chain.

New marginal supply: using digital technology to tap into previously inaccessible sources of supply at a marginal cost, often, but not always, in combination with a platform play.

Digitally-enabled products and services:  using digital technology to create new products or services with digital features, typically to serve new demand.

Customizing: using digital technology to re-bundle their products or services to better serve their existing customers.

Digital distribution channels: invest in digital distribution channels, in an attempt to make it easier for customers to access their products or services.

Cost efficiency: using digital to improve their cost efficiency, typically through automation or cost scaling. But in today's market dynamics, this strategy looks like it’s aimed at survival rather than creating a source of comparative advantage.

Digital strategy needs to become the essence of business strategy. Renewing the baseline for digital and strategy clears away the clutter, setting teams on a path for action. In that renewal a digitally informed business strategy becomes an answer to a simple question: