What is a Brand?
Before attempting to include any definition of the term brand, it is important to acknowledge that it is overdefined given the fact that it has been existing for over 15 centuries (Stern, 2006). According to the systematic review of the brand definitions of over 100 papers and many expert interviews, a proposition was made to define the term such as; a brand represents the matching functional and emotional values devised by a firm with the performance and psychological benefits sought by consumers (de Chernatony & Dall’Olmo Riley, 1998). This definition is a mouthful however it covers the different definitions of a brand emerged over the years. In addition, this definition includes multiple characteristics of a brand such as tangible and intangible aspects (de Chernatony & Dall’Olmo Riley, 1998). It also shows how brand is related to the company’s internal capabilities (Diefenbach, 1987) and customers’ expectations (Assael, 1995). The characteristics and benefits of the brand is applicable in different fields such as marketing, innovation and design (Abbing, 2010). However, the main goal of using the brand attributes is shared among these different fields: to differentiate. In the field of innovation, brand is used in order to create differentiation on the product/service development and unique value propositions to their customers (Aaker, 2007) In the field of marketing, the main goal is to achieve a differentiation is customers’ minds, establish a unique positioning (Dawar & Bagga, 2015). Lastly, with design, the brands come to live and the intangible values are experienced in a tangible way (Wheeler, 2009). A company’s capability of differentiating itself is defined as a competitive advantage hence brand is considered as a mechanism for companies for achieving that through differentiation (Wood, 2000).
Branding is basically working with the tangible, intangible or combination of both types of attributes of the brand. According to Keller (2003), branding is a process of endowing products and services with the advantages that accrue to building a strong brand. In addition, it has emerged as a management priority. Therefore, the brand attributes should be part of strategic decisions (reference?).
As Keller (2013) stated “Great brands are not accidents”. In order to create, manage and sustain a strong brand a clarified strategy is required. Brand strategy is strongly connected to the overall company strategy in theory and should serve an overarching goal. For instance, Nationale Nederlanden, the Dutch insurance and asset management organization, explicitly addresses the multiple elements of the brand as a part of their corporate strategy such as; purpose, and values. Another example, Nederlandse Loterij (the Dutch Lottery) has a strong vision on contributing happier and healthier Netherlands. Lastly, take Adidas, worldwide known sportswear manufacturing organization. The brand is embedded in every inch of the organization, from the activities to the mindset of the employees. The common denominator of these examples is all of them can be considered as purposeful organizations.
How the companies are using their brand and how much it is part of strategic decisions or directions vary among the organizations. In this respect brand is classified by the functions that it can be carrying within an organization. (Explain the graph, internal external functions of the brand)
The Effects of Digital on Brands
The dominant presence of digital technologies in our lives is undeniable. Referring to the definition of a brand, and important part of the definition is that a brand provides the performance and psychological benefits that the customers are seeking for. The reason why this part of the definition is important is that with the digital technologies what customers are seeking for is changing. Therefore, brands are under high pressure of staying relevant and connect to their customers in way that satisfies them. Before the pervasive presence of digital technologies, the companies had more companies were influencers and there was a one-way flow. In contrary now, customers are influencers and reciprocal value flows are the reality (Rogers, 2016).
When we look at the model developed by (Edelman D. C., 2010), customers have more power while they are making purchase decisions and the journey after the purchase is as important. Therefore, brands should extend their strategic efforts to be in a reciprocal relationship with their customers in the new stages defined as well. [Examplify: RTL Videoland?]
Strategic Elements of a Brand
While defining the brand, the tangible and intangible attributes are touched upon. The question is how to use these attributes strategically which has already studied by many credible researchers.
– Brand DNA
o Is this the way to go?
o Three pillars of the DNA is still too broad of a scope?
– Different perspectives? – Sinek & Sharp
Digital technologies and how they emerged in our work or personal lives changed the dynamics in the society. Now the way people interact, entertain, communicate, educate or get cured is different and keeps changing constantly. Increasing computing power, networking capabilities, rapid developments in information and communication technologies, unprecedent processing power, storage capacity and unlimited access to knowledge are some of the reasons why digital technologies interpenetrated in our lives. (Demirkan, Spohrer, & Welser, 2016; Svahn, Henfridsson, & Yoo, 2009). As consumers, we are becoming more demanding as in our expectations from products, services or the brands that we are engaging. For instance; Uber changed how fast consumers engage with transportation means and this influences our expectations from other services (Mattin, 2016)
Clearly, digital technologies and numerous benefits they provide, present many opportunities not only for established businesses but also new entrants. The market conditions also influenced by digital technologies such as lower threshold for new entrants, improved product/performance ratios and novel approaches towards design, production, distribution and use (Yoo, Henfridsson, & Lyttinen, 2010). Evidently, many companies competing in markets that are being turned upside down by technology are no strangers to discord. (Margolies, Ronanki, & Steier, 2018). Digital technologies are resolute to break down the barriers of different industry or sector. As stated, no sector or organization is immune to the effects (Hess, Matt, Benlian, & Wiesböck, 2016). Therefore, the question of how to reap the benefits of digital technologies and create value for the business became a top priority in organizations’ agenda.
Before diving into the literature of digital, it is important to create a common ground in terms of the terminology use. Below, widely accepted definitions for important terms.
“Digitally enabling analog or physical artifacts for the purpose of implementing into said artifacts into business processes with the ultimate aim of acquiring newly formed knowledge and creating new value for the stakeholders” (Schallmo & Williams, 2018)
“Digitalization means the use of digital technologies and of data (digitized and natively digital) in order to create revenue, improve business, replace/transform business processes (not simply digitizing them) and create an environment for digital business, whereby digital information is at the core” (Schallmo & Williams, 2018).
Digital transformation is the profound and accelerating transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities brought by digital technologies and their impact across society in a strategic and prioritized way (Demirkan, Spohrer, & Welser, 2016) The combined effects of several digital innovations bringing about novel actors (actor constellations), structures, practices, values and beliefs that change, threaten, replace or complement existing rules of the game within organizations, ecosystems, industries or fields (Hinings, Gegenhuber, & Greenwood, 2018).
The main purpose of digital transformation is exploring the possibilities of digital technologies and exploiting the benefits to achieve sustainable business transformation. The exploration and exploitation activities emphasize the importance of the journey in digital transformation. In order to achieve increased productivity and creativity in decision making, innovation, connectivity and augmentation, organizations are shifting their focus towards digital transformation (Demirkan et al., 2016). The mentioned improvements help organizations to address and act on the emerging customer expectations and market needs faster and better. Research forecasts that the global spending on digital transformation in 2018 will be more than $1.1 trillion which is 16.8 % more than $958 billion spent in 2017 (Framingham, 2018). Therefore, regardless the sector or industry, digital transformation is the inevitable future for organizations that want to survive the digital age.
The answer: Strategy and why is it important
The topic of how to perform a digital transformation is an important pillar in digital transformation discussion. One of the biggest misconceptions about digital transformation is considering technology as a main driver of digital transformation. According to the review conducted by MITSloan in collaboration with Deloitte, it is explicitly stated that strategy not technology drives digital transformation (Kane, Palmer, Phillips Nguyen, Kiron, & Buckley, 2015). Chanias & Hess (2016) stated that increasing number of firms are introducing company-wide digital transformation strategies in order to deal with the risks and challenges that digital technologies unveil. The imperativeness of formulating and executing digital transformation strategies are also emphasized by Hess et al. (2016).
It is challenging and why
Formulating and executing digital transformation strategies is a big challenge for organizations. Looking back to the past decade, there are many examples of industry leader brands having had failures in their digital transformation journeys such as, Burberry, P&G and GE (Davenport & Westerman, 2018). Yet, there is not a single reason of these failures. Some of the reasons as pointed out are; focusing on technology without investing in organizational capabilities, failed implementation of enterprise resource planning or failure in changing the organizational mindset (Kane et al., 2015).
But what kind of strategy and why
After emphasizing the importance of having a strategy to survive the digital transformation, then the question of what kind of strategy emerges. In addition, in the literature, there are different statements about having a digital strategy (Kane et al., 2015) or having a digital transformation strategy (Hess et al., 2016; Matt et al., 2015; Chanias & Hess, 2016) is crucial. Digital (business) strategies are emerged with the goal of aligning functional IT strategies with the organizations’ business strategies in order to create value by leveraging digital resources (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013). On the other hand, digital transformation strategies are considered as blueprints that help companies not only to achieve their goals with digital technologies but also assist them in governing the transformations and operations also after the transformation (Matt et al., 2015). In other words, if digital strategies are considered as visions, digital transformation strategies are the roadmaps in how to reach those. For the scope of this paper, digital transformation strategies are taken as a must to survive digital transformation. However, there are also similar characteristics between two kinds of strategies which will be elaborated in the further sections.
In order to provide a better understanding of digital transformation, more characteristics of it will be revealed in this section. First and foremost, digital transformation has a wide scope which makes it a complex issue for the organizations. The transformation might be triggered by internal and/or external events and execution of transformation has effects on inner and outer environments of an organization (Chanias, 2017). In the literature, the transformation caused by digital technology effects defined across five domains (Rogers, 2016). These domains where transformation is dominant are customer experience, data, competition, innovation and value. In order to create shared understanding on what transformation in each domain means, short explanation is provided below per domain.
1) Transforming the Customer Experience
Digital technologies direct organizations to muse about their touchpoints with their customers and how they connect them. Among all industries, this type of transformation is considered as the most popular one and as a catalyst in enterprise-wide digital transformation (Solis, 2018).
2) Data Capability Transformation
The utilization of data has reached to new levels with development in digital technologies. Therefore, organizations are seeking new ways how to collect, analyze, manage and use data in their internal and external activities.
3) Transformation in the Competitive Environment
Digital technologies changed the rules of competition and collaboration. The borderlines between the industries have become more fluid and transparent. Consequently, with the help of digital technologies organizations consider establishing collaboration with their competitors.
4) Transformation in Innovation Processes
Service-oriented modularity in innovation (Svahn, Henfridsson, & Yoo, 2009) brought a new mindset of innovating which is based on agility. Establishing an agile culture in the organizations which encourages experimenting, failing, learning and fostering to take risks is considered as a necessity for digital transformation (Lee, Sambamurthy, Lim, & Wei, 2015; Hess, Matt, Benlian, & Wiesböck, 2016)
5) Transformation in Value Created and Delivered
Digital technologies opened up new perspectives for the organizations and stimulate them to create new value propositions that better fits to the market and customer needs. This domain presents the challenge of staying relevant and survive the digital age for the organizations.
As a concluding remark on the mentioned domains, each of them presents different challenges for organizations and as stated by Rogers (2016), they can be considered as point of departures for the organizations. The interrelated nature of these domains makes it impossible to focus on one and discard the others.
Drivers and Outcomes?
DBS Themes (4S)?
Until now, several aspects of digital transformation is covered and the necessity of formulating a digital transformation strategy is evident (Carlo, Lyytinen, & Rose, 2012; Matt, Hess, & Benlian, 2015) In the literature there are some requirements defined for digital transformation strategies to fulfill and also some frameworks developed on how to formulate such strategies.
One of the most important requirements for digital transformation strategies is their alignment with the corporate strategy and the supporting functional and operational strategies.
Requirements and frameworks
Detailed level of strategizing
- Aligning 4 dimensions (value, finance etc.) [framework]
- Aligning in with the sub strategies (IT, financial etc.)
- Treat it as strategizing for fuzzy front end
- Considering the emerging strategies in the organization while formulating it.
The new piece of writing ends here.
Characteristics of digital transformation
5 domains, internal & external, 4 dimensions
Drivers of digital transformation
Case study (media industry)
– Digital transformation strategies serve as a central concept to coordinate, prioritize and implement a firm’s digital transformation efforts (Matt, Hess, & Benlian, 2015) (Characteristics)
– Digital transformation is a complex issue that affects many or all the segments within a company. Managers have to simultaneously balance the exploration and exploitation of their firms’ resources to achieve organizational agility which is necessary condition for the successful transformation of their business (Hess, Matt, Benlian, & Wiesböck, 2016). (Characteristics as well?)
[Drivers of digital transformation]
[Characteristics of Digital Transformation]
Acknowledgment of creating strategies in line with the business objectives and with the intention of creating value for the customers is an important step. To bring more structure in how to perform digital transformation, five domains pinpointed in (Rogers, 2016) for companies to direct their attention to, namely; customer touchpoints, ecosystem context, data capabilities, experimentation platform, value proposition.
When we look at the real-life context in Deloitte ecosystem and the demands from the clients, not all five domains mentioned above are forming the basis of the interventions. A senior manager in Deloitte who participated multiple digital transformation projects over the years, categorizes digital transformation projects in practice in 3 groups based on the initial intention in the start of the project.
– Transformation from the business model perspective: meaning re-thinking the business and how to generate the new revenue streams,
– Transformation around the customer experience and how the organization is connecting to the customer
– Transformation of the core, which is more focused on the back-end and internal organization.
As a valuable insight derived from the same interview, in a large transformation all three categories are covered or touched upon.
Based on the literature, a complete and deep-seated digital transformation was deemed to comprise of several layers of change from the status quo. In categorizing the changes an organization experience in digital transformation, four distinct layers were identified (Yoo et al., 2010; Tripsas, 2009; Henfridsson & Yoo, 2009).
Material transformation deals with the adoption of digital interfaces that can be seen, heard, touched or used. These are tangible tools that act as intermediaries to contribute towards value creation and delivery.
Cognitive transformative refers to the new mental logic and knowledge that rationalize and facilitate the
Identity transformation refers to the development of a relevant organizational image and belief that projects the outcome of the transformation to members of the organization and relevant stakeholders.
Organizational transformation refers to the integration of new structure, process, skills and culture to cultivate new internal or external relationship and interdependencies that are enabled by or pertinent to the desired end goal of transformation.
If the perspective is switched to the context of the reality, the changes were noted to be non-linear and continuous. The layers of transformation may not necessarily take place at the same time or at the same pace. However, they may be interrelated and can influence one another to fuel at a more holistic transformation process and outcome (Yoo et al., 2010).
However, consideration of the different layers of the digital transformation is important. To exemplify it and give more of a contextual information two cases from Deloitte Digital will be explained. The first case company (Client 1) is a pension fund organization in the Netherlands and was looking for ways to become more customer centric initially. This can be considered in the customer domain of the five domains mentioned above. However, the brand perspective and how to find new ways of relating to the customers were initially out of the project. The transformation mostly took place in the material and cognitive layer which presents the future threat of how a pension fund can connect to and stay relevant for the customers. The second case was performed for a global sportswear manufacturer (Client 2) which has a strong brand. The initiation of the project was to improve customer touchpoints like in Client 1. However, in this case, the strong brand presence was holding back the client organization in considering the business objectives while performing such a transformation. Comparing two cases, the priorities in terms of the drivers of digital transformation were present in different levels and this off-ratio is found problematic by Deloitte Consultants. Therefore, as conclusion, consideration of different assets of the organization and building up the layers of the digital transformation is essential for creating strategies.
– Digital Transformation
o Insights from Deloitte
– Analyze global trend reports
Organizational Analysis – Contextual information
– Opportunity areas
– The need in the organization
– Inputs from organizational perspective
– Acknowledge the decisions
– The bridging two domains and with Deloitte
– Support with quotes from the interviews
– CX focus
Case Selection Criteria
The Gap in the Literature
– Dilemma lines/why/ according to what (refer back to the meeting notes with Roland as well)
Next Steps / Questions
– Interview Guide ?
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