Published: 26. 9. 2016 in Blog by Branislav Bubanja

The secret of the Missing Link

Why we are talking about digital transformation. Brace your company for the digital age: be inspired by success stories from organizations of all trades and discover the missing link on your own operational chain.

Digital success comes to those who dare
Michael Dublin and other leaders disrupted their business using digital

Michael Dubin invested 4,500 USD and made a funny and interesting video for YouTube. The video went viral and, in the first 48 hours, Michael received 12,000 subscription requests. Michael is the CEO of DollarShaveClub.com and his video promotes subscriptions for shaving blades. Clients receive one free razor and then, every month, five new blades for one dollar a month shipped to their door.

Michael is using humor, virality, social networks and the internet as channels. Subscription is his business model and, with low investment and in very short time, he managed to challenge the 8 billion USD business bastion of Gillette. After his initial success in the US, Michael is expanding his business to Canada and Australia. And he is introducing a new product.

Great story of a startup that penetrates very fast, with minimal investment, the world market of an existing product. DollarShaveClub.com goes against a Gorilla market leader and its huge advertising machinery. Thanks to the internet and social networks.

Second example:Nespresso. They are already covering 60 countries with their unique business model: selling machines through retail channels and selling coffee – Nespresso capsules – online or via the direct business called Nespresso Club. If Nespresso wants to penetrate a new country, it is very easy for them to agree with retail channels to start selling machines and to open an online Nespresso Club for the local market.

Nespresso is using the internet to establish and nurture a direct relationship with consumers and to develop their brand. Club members are important for Nespresso and, in 2004, Club Members chose George Clooney as Nespresso's club brand ambassador.

Yet more examples: recently Telenor acquired KBC Bank in Serbia. Tesco owns a bank in the UK for a while; MTS, mobile phone operator in Russia, also owns MTS Bank. Each of them will offer cross industry services based on their relationship to their own consumers or, better to say, on owning data about consumers.

Telecom operators are offering cloud services brokerage to their client base, increasing loyalty and ARPU and also reducing churn.

Banks are offering different business services to their clients and creating a market place where their customers can meet each other and start collaboration.

Different models are confirming that, besides recession, digital economy is dangerous for established business enterprises. Low investment, easy, experimental business models and a wide geographical coverage endanger revenue and profit of well-established businesses. In the terms of Porter's five forces, the internet increases the bargaining power of buyers, enables suppliers to cut all intermediaries and establish a direct relationship to consumers, lowers barriers for new entrants and reduces switching costs significantly.

That is why we started this website: to share experience, best practices and ideas about digital economy and its impact on established enterprises. To propose and discuss changes in processes and business models that can help enterprises adapt to change faster and convert the danger of the digital economy into the opportunity to grow and expand business.

We are inviting all of you, interested in digital economy principles, to collaborate and to create awareness about the dangers and opportunities of digital economy. To innovate and exploit different ways to connect closed and internally focused IT systems to new tools to achieve an excellent customer experience. And discover The Missing Link.

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