Discuss about the Trends in Global Business for Digital Disruption.
Digital disruption is predominantly any kind of disruption that has been created due to the onset of technology and has adversely impacted the value offered by existing products or services in the industries. These disruptions have changed industries, consumer behaviors, spending patterns, attitudes and preferences. Digitally disruptive businesses are extremely important for the economic growth of a country. They aim to change the way in which people lead their everyday lives. This report specifies certain examples of digitally disruptive organizations that have changed economies, industries and human lifestyles (McQuivey, 2013). All these organizations have created a significant mark in this world and in their respective industries. Most of these organizations started on a minute level and then suddenly grew to such a massive extent that it created disruption in the market.
Digital disruptions are not limited to cities or countries. The increasing globalization has made it possible for people, resources, technology or even ideas to travel from one part of the world to another (Lindgren, 2013). This is what made it possible for these digitally disruptive organizations to grab their hold in many different regions of the world. At present, we are leading technologically advanced lives than all the generations that existed before us. Our smartphones are capable of conducting various tasks of our everyday lives. Digitalization of the world has made life convenient but it has also enhanced our dependence on technology. Therefore it is our responsibility to use this technology in the most effective manner.
Monitoring health has never been as easy as it is right now. Earlier, checking body temperature and blood pressure required a trip to the doctor’s clinic. However, self-monitoring of health has been widely accepted and propagated around the world. Fitness bands need to be tied around the waist and then they can calculate the number of steps taken in a day, calories burnt, heart rate and blood pressure (Gellerstedt, 2016). These bands are convenient to use and have made people increasingly health conscious.
Fitbit was first launched in 2007. The product Fitbit has been widely accepted across the globe and people are actively using it. Since 2010, Fitbit has sold over 38 million devices worldwide (Statista, 2018). The fitness industry’s disruption has occurred with the advent of fitness bands. This massive acceptance towards the product has been possible owing to certain reasons. Firstly, the advent of technology has made it possible for people to accept these bands. Technology can be trusted and hence people believe that the data depicted by the fitness band is correct (Baalbaki et. al., 2017). Secondly, a changing lifestyle has been observed over the last 10 years. People are becoming increasingly health conscious and their focus on getting healthier is increasing (Terry, 2015). Young girls and boys are becoming concerned about how many calories they intake, their number of steps taken per day and their sleep schedule (Fagan, 2017). This changing lifestyle provided fitness bands with an outlet to penetrate deep into the market.
Fitness industry before the launch of fitness bands was limited to gymnasiums, yoga clinics and fitness centers. These places had experts who would guide customers regarding their work out. Today, people prefer going for a run and measuring their steps taken. This disruption has changed people’s approach to health and reduced their dependency on others. The future appears bright for fitness bands. The technology is expected to improve further and it will be possible for the band to track other details of individual health.
Convenience in shopping has been one of the biggest advantages of digital disruption. Buying products and services is a single click away and that has been possible because of the advent of technology. Buying clothes, shoes, groceries, food, bags and everything else is possible through a single smartphone while sitting in any part of the world. Amazon, the ecommerce giant is renowned to offer products spanning across many product lines. The advent of Ecommerce and players like Alibaba, Flipkart and Amazon have changed the way this industry operates.
Initial if an individual had to buy something, the only way to do that was to figure out where it is available, go to that place and buy it. Today people can window shop millions of items while watching television or travelling to work. The disruption caused by Ecommerce has been possible because people around the world have widely accepted technology and these leading brands are adding convenience to an individual’s life (Miller, 2012). The advent of Ecommerce has also changed other industries. Besides this, the digitalization has allowed consumers to buy food and medicines online. People can book their movie tickets and salon services with a single click and this is what has made all the difference.
Every leading brand has an online platform to target its technologically savvy customers. There is no denying that technology has made it easier for customers to buy and sell products through online platforms. The acceptance towards this model and the efficiency of it have disrupted the brick and mortar businesses spread across the globe. Online goods are available in people’s phones, they get delivered at the doorstep of the consumer and are often priced lesser than products sold offline because of economies of scale. Ecommerce has changed consumer preferences, consumer attitudes and their buying behaviour by offering them something highly effective, convenient and reliable. More and more businesses are entering into and adopting this model for improved sales and the number will continue to grow. What is yet to see is that Ecommerce giants are already in the middle of a price war and it will be interesting to understand how new players compete with them and how the existing players would continue to survive with the ongoing price war.
It is impossible to discuss digital disruption and not mention Airbnb. The brand has single handedly changed the shape of the hospitality industry. Even though, new players have now begun to enter the market, for a long time, Airbnb was a one of a kind platform for a long time in the industry. The hospitality industry itself is massive and caters to a wide number of customers across the globe. Airbnb is the only player in the industry which has a massive customer base and owns no real estate (Tornjanski et. al., 2015).
This has only been possible because of digitalization of the world and creation of a technologically savvy society. Airbnb has simply created a platform between people who are willing to offer their properties on rent for shorter durations and travelers and tourists who are looking for short term accommodation. This serves two important purposes. Firstly, people can earn extra money by renting out their properties for a few days. Secondly, travelers can find less expensive sources of accommodation as provided by their hosts and also experience the local cultures and traditions in their most natural form (Weill, 2015).
Hosts who are willing to offer their properties on rent can register the property on Airbnb. The platform will then make it available for tourists who are looking for accommodation. This platform offered by Airbnb has built a community of over 150 million users from different parts of the globe. At present the brand has 0.6 million registered properties and this number is expected to grow further in the years to come.
Besides technology and innovation of the idea, Airbnb’s pricing strategy has also helped the brand in remaining competitive. Airbnb charges between 6%-12% of the booking amount from the customers who are looking for accommodation. On the other hand, Airbnb charges 3% from the hosts who have made their properties available for tourists from around the globe (Dawson et. al., 2016). This makes the brand earn somewhere between 9% and 15% from all their bookings. Airbnb has changed consumer behaviors and patterns within the hospitality industry and saved people from the trouble of booking expensive hotels with a rare local cultural experience.
Airbnb’s growth has been possible due to increasing technology, growing use of the internet and smartphones across the globe. The brand has earned immense trust in different parts of the world. The new industry is sure to face competition in the future but it would take a long time for a new player in the industry to gather the same level of customer base and brand value as Airbnb.
Communication companies like Whatsapp, Facebook, Viber and Skype
There are leading telecom operators around the globe that have heavily invested in the infrastructure that makes broadband heavily available over smartphones and computers. They have been able to achieve this level of ubiquity in terms of the broadband service over a span of many years. However, over the last few years, technological advancement of the world has made it possible for people to call their loved ones over various mobile applications free of cost. These include applications like Facebook, Whatsapp, Viber and Skype. In some evil manner, these mobile applications and their phone calling feature are still using the same infrastructure that was laid out by previously growing telecom companies. But now new entrants in the industry are eating away the market share of these old firms by using the same infrastructure that these old firms built for themselves.
This is why these new services or applications are better known as over the top (OTT) platform providers (Kramer & Kalka, 2017). All these new applications including but not limited to Whatsapp, Skype, Facebook and Viber allow users to make voice and video calls. The similar feature is now being adopted by Snapchat. It is important to note that these applications or services are not telecommunication companies but massive disruptions in the industry of telecommunication. As of September, 2015, Whatsapp had over 600 million users.
Even though the strength of the network may not allow users to make calls through these applications few times but even then, the disruption and the acceptance of these applications will continue to grow. This is because, since their launch, these services are being used to send messages. SMS revenues that were generated by older telecommunication providers were a pot of gold for them (Brem & Viardot, 2017). Many million messages were sent every day and these operators minted money over it. However, with the growth of these mobile applications and their increased usage for calling and texting purposes, the overall usage of traditional telecom operators is declining. This disruption has completely changed the way this industry operates. It would be interesting to note what do these applications or newer players of the industry have to offer next.
Media houses have been majorly known for the content that they create. There are leading media companies in different parts of the globe which have been putting efforts in creating lucrative content in order to target customers to their platforms. The validity of a media house was judged by the quality of content offered by the firm. If customers like this new content, they will stick to the platform, if not, they will move on to the next one. This signifies that all times media houses had to make sure they offer the most relevant, topical and creative content for its viewers. This is how media houses have always worked.
However, just ten years ago, Mark Zuckerberg introduced us to the world of Facebook and since then, we haven’t been able to get enough of it. Facebook allows people access to the latest news that is happening across the globe, in their own countries, cities and to their next door neighbors and friends. But what is most interesting is that despite holding such a massive amount of content, none of the content is ever created by Facebook (Silicon Republic, 2015). It is simply a platform for a large number of people to write, post and share the content that they create with over 1.5 billion users from different parts of the world. There are a large number of people who are watching videos on Facebook every day and sharing messages over Whatsapp. The same messages get circulated to every person connected with the platform (Schmidt & Cohen, 2010). Most people do not feel the need to read the newspaper as most of the information and the latest updates are anyway available on the social networking platform.
Until a few years back, Facebook attracted young and the millennial generation between the ages of 18 and 35. However, over a period of time, Facebook has expanded its target audience and now it is not uncommon to find a people over the age of 80 or 90 who have a Facebook account. This widespread reach of the brand has created a disruption in the media industry and that is sure to remain. Facebook is one of a kind platform that has engaged customers from different parts of the world (Robertson, 2012). It is a single platform that connects such a massive amount of people from around the globe.
“Netflix and chill’ is not a phase but it has now become a lifestyle. Gone are the days when people would queue up, buy tickets and watch their favorite movie or visit a plethora of websites to find the safest way to download a particular movie of their likeability. Netflix is a platform that collects and curates content in the form of movies, TV shows and documentaries and makes it available for the world to see. The brand has gained immense traction since the first release of “House of cards” in the year 2013. Since then, the Netflix original series have been the talk of the town. Netflix is a digital disruption because it has completely transformed the entertainment industry by bringing entertainment at people’s homes and in their phones. People can download movies or TV shows and watch them at their own convenience. Four people can use a single ID. Netflix TV shows are creatively curated and appeal to a large audience. Netflix is a digital disruption that has transformed the entertainment industry. (Adhikari et. al., 2012).
Netflix is known for the content it gathers and creates. The platform gained popularity with class apart shows like Black Mirror, 13 Reasons why and House of Cards (Jenner, 2016). Once the shows were renowned, more and more people wanted to be the part of the Netflix community. Hence, leading to increased subscriptions. This led to the boom of Netflix and if the brand continues to maintain the quality of its content, the brand will only continue to grow.
Digital disruption of various industries has transformed customer behaviors and spending patterns. Everyday lifestyles have changed and the acceptance of technology has increased (Schmidt & Cohen, 2010). This has introduced people to a life of Netflix and chill where they shop from online platforms and read with the help of Kindles. People read content on their Facebook and call each other via Whatsapp. Air and train tickets can be booked through online portals and Airbnb has become synonymous to accommodation. People are ubering to different destinations and staying connected with the world at large.
The world that digital disruption has created is significant and has led to a massive growth of various economies. Lifestyles have changed and internet of things has occurred. It is this digitalization, globalization and disruptions that have change consumer patterns and business behaviors. Such disruptions will continue to occur for as long we continue innovating and it is imperative that these disruptions are welcomed to sustain our long term growth and development.
Adhikari, V.K., Guo, Y., Hao, F., Varvello, M., Hilt, V., Steiner, M. and Zhang, Z.L., (2012), March. Unreeling netflix: Understanding and improving multi-cdn movie delivery. In INFOCOM, 2012 Proceedings IEEE (pp. 1620-1628). IEEE.
Baalbaki, S., Hoffman, D. L., & Gilliard, D. J. (2017). The Fitbit Addiction: Will This Disruption Last?. Journal of Marketing Development and Competitiveness, 11(4), 86-103.
Brem, A., & Viardot, E. (2017). Revolution of Innovation Management: The Digital Breakthrough. In Revolution of Innovation Management (pp. 1-16). Palgrave Macmillan, London.
Dawson, A., Hirt, M., & Scanlan, J. (2016). The economic essentials of digital strategy. McKinsey Quarterly, 1-13.
Fagan, D. (2017). Wake Up: The nine hashtags of digital disruption. Univ. of Queensland Press.
Gellerstedt, M. (2016). The digitalization of health care paves the way for improved quality of life?. Journal of Systemics, Cybernetics and Informatics, 14(5), 1-10.
Jenner, M. (2016). Is this TVIV? On Netflix, TVIII and binge-watching. New media & society, 18(2), 257-273.
Kramer, A., & Kalka, R. (2017). How digital disruption changes pricing strategies and price models. In Phantom Ex Machina(pp. 87-103). Springer, Cham.
Lindgren, S. (2013). New noise: A cultural sociology of digital disruption. Peter Lang Publishing Group.
McQuivey, J. (2013). Digital disruption: Unleashing the next wave of innovation. Available at ftp://ftp.lotus.com/info/Webcast__Digital_DisruptionUnleashing_Th_1330847.pdf Accessed on 27 May, 2018.
Miller, M. (2012). B2B digital marketing: Using the web to market directly to businesses. Que Publishing.
Robertson, C. B. (2012). The Facebook Disruption: How Social Media May Transform Civil Litigation and Facilitate Access to Justice. Ark. L. Rev., 65, 75.
Schmidt, E. and Cohen, J., 2010. The Digital Disruption-Connectivity and the Diffusion of Power. Foreign Aff., 89, p.75.
Schmidt, E., & Cohen, J. (2010). The Digital Disruption-Connectivity and the Diffusion of Power. Foreign Aff., 89, 75.
Silicon Republic, 2015, ‘How digital disruption changed eight industries forever’. Available at https://www.siliconrepublic.com/companies/digital-disruption-changed-8-industries-forever. Accessed on 27 May, 2018.
Statista, 2018, ‘Fitbit – Statistics and facts’. Available at https://www.statista.com/topics/2595/fitbit/. Accessed on 27 May, 2018.
Tornjanski, V., Marinkovi?, S., S?voiu, G. and ?udanov, M., 2015. A Need for Research Focus Shift: Banking Industry in the Age of Digital Disruption. Econophysics, Sociophysics & Other Multidisciplinary Sciences Journal (ESMSJ), 5(3), pp.11-15.
Weill, P. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review, 56(4), 27.