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Navigating Digital Business Strategy in the Modern Era

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Subasish Barua
Taoheed Hasan
Esseen arvioitu lukuaika on 16 minuuttia.


Any person would need a way to run a business properly and smoothly. To create a business properly and smoothly of course a company must have the right strategy. Building a digital business strategy is one of the strategies used by the company to run the business, therefore it is essential in a business role. In this chapter, we will learn how digital business can be built within a company. However, before a business builds a digital business strategy, they also make digital talk. Before some businesses do digital business, they also create digital talk to build the ideas and discussion between their business growth and to create value for business in the digital world. Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm’s chosen business strategy. Even within this so-called alignment view, business strategy is directed at IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally Transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks . Accordingly, we argue that the time is right to Rethink the role of IT strategy, from that of a functional-level strategy—aligned but essentially always subordinate to business strategy—to one that reflects a Fusion between IT strategy and business strategy. This Fusion is herein termed digital business strategy.


In building a digital business, of course there are several ways that can be done. The first step is to create the Mindset and shared understanding through discussions to find the vision and the case further. The second step is to put the right leaders in order to set up a plan to get an assessment and strategic plans in the business. The third step is to perform actions on each organization to obtain a more efficient process and supported through advanced tools and technologies. The fourth step, this is the last step where the sets must be optimized well, through performance management and improvement of sustainability.


What’s a digital business?

At the beginning of this post, we said a successful digital business is one that makes use of digitization and technological solutions to market its products and services. But what’s a digital business?

In a nutshell, these are businesses that use digital platforms to attract customers and promote their products, and as transaction tools between the company and its consumers. Some well-known examples are:

E-commerce: a platform for a company to offer its products and services, with no physical interaction

Marketplace: a site serving as an intermediary between a company and customers, such as Amazon

Info products: digital products, such as e-books, apps, tutorials, and others, that you can market freely.

Blog: a website that publishes information about a topic, product, or service

Features of digital businesses

  • To be considered digital, a business must have certain essential elements and, of course, the goal of becoming a successful digital business. For this, a business needs:
  • Around-the-clock web connection
  • Constant updates about Trends
  • Digital marketing strategies
  • Digital Transformation throughout the organization
  • Smart oversight systems
  • Competitiveness
  • Its advantages are on display at every point of sale or contact with customers

Digital Business Strategy Themes:

We have identified four key themes to guide our future thinking on digital business strategy and provide a framework to help define the next generation of insights. The four themes are (1) the scope of digital business strategy, (2) the scale of digital business strategy, (3) the speed of digital business strategy, and (4) the sources of business value creation and Capture in digital business strategy . We believe that the proposed four key themes capture the key attributes of digital business strategy and help us to articulate its main nuances. We synthesize these four key themes with a discussion of success metrics (see Figure 1) that could serve as the starting point for developing a rich set of research questions to guide the debate and discussion within the broader academic community and for Guiding practicing Managers and executives .

Digital Business Strategy Transcends Traditional Functional and Process Silos

Digital business strategy is different from traditional IT strategy in the sense that it is much more than a cross-functional strategy, and it transcends traditional functional areas (such as marketing, procurement, logistics, operations, or others) and various IT-enabled business processes (such as order management, customer service, and others). Therefore, digital business strategy can be viewed as being inherently trans-functional. All of the functional and process strategies are encompassed under the umbrella of digital business strategy with digital resources serving as connective tissue. Digital business strategy relies on rich information Exchanges through digital platforms inside and outside organizations that allow multifunctional strategies and processes to be tightly interconnected with the aid of interfering IT capabilities (eg, Rai et al. 2012). Discussion of how IT strategy shapes and influences business strategy Originally articulated by Henderson and Venkatraman (1993) now emerges to the core through digital business strategy. Accordingly, digital business strategy is broader, more prominent, more embedded, and more encompassing than other functional strategies. Consequently, while IT strategy may be positioned as a functional-level strategy (under the province of the chief information officer), digital business strategy should not be positioned below business strategy but treated as business strategy itself for the digital era. Over time, as firms and industries become more digital and rely on information, communication, and connectivity functionality, we envision that digital business strategy will be the business strategy. At that juncture, there would be no separation between business strategy and digital business strategy.

Common Elements of a Digital Business:

There are several views on the exact definition of digital business from industry experts. Gartner says that digital business is the creation of new value chains and business opportunities that traditional businesses cannot offer. McKinsey emphasizes that “digital should be seen less as a thing and more a way of doing things.”

Most digital businesses fit one or both of these points; they focus on creating value at new frontiers for their core business, or they use digital technology to drive growth, revenue and performance in ways that were impossible with traditional models.

It may be helpful for companies to review common elements of digital business and compare them against their own business models. These are some of the trends that differentiate digital from traditional processes.

Use existing technologies  to cut costs, gather data and provide a better customer experience. Digital businesses focus on the competitive advantages that technology gains them, whether that’s reducing overhead or providing new value to their customers.

Embrace the concept of digital transformation and the cultural shifts that require. The implementation and management of digital services can necessitate organizational restructuring, especially as new roles are created, and IT is given greater input into strategic decisions.

Explore new business models that put customer experience at the center of digital strategy. People are often willing to spend more for an exceptional customer experience, making it a key differentiator in the digital economy. Business models that align with this hyper focus on customer satisfaction will eventually center on digital services, since digital is increasingly the experience that people prefer.

Steps for becoming a successful digital business

Managing a digital business takes a lot of effort in order to adapt to new technologies and strategies. However, this kind of innovation will help you target more efficient processes and offer one-of-a-kind products and services to your consumers. This is why we’ve listed below nine recommendations for you to have a successful digital business.

  1. 360º online presence

Because consumers can get to know your business through multiple channels, maintaining consistency and cohesion between your brand, tone, and visual identity is essential.

For example, users seeing a post on Facebook should readily identify it as belonging to your business thanks to the post’s consistency with the content on your website. Such a pattern helps boost your trustworthiness and ensures customers see your business is completely reliable. Likewise, in order to have an even greater impact on your target audience, you should make sure you’re available on all media, platforms, and channels wherever your potential customers spend their time, or in other words, where your audience is present.

The most popular social media include Facebook, Instagram, and YouTube. Additionally, you should implement SEO and SEM strategies using content marketing and tools like Google AdWords.

  1. Communication with customers

Finding innovative and effective ways to communicate with customers is crucial for digital businesses. Most times, potential customers will find the information they need on the website or on social media; however, some may consider it not enough, or uninteresting. This is why the ideal would be to use the broad selection of channels to communicate with them effectively and memorably.

For example, if you see your tweets aren’t generating the interaction you wanted, you can develop a strategy through videos. This might possibly favor your branding and give it an easier way to get your consumers’ attention.

  1. Customized experience

The data generated from the many digital tools out there, like ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and BPM (Business Process Management), enable you to obtain powerful insights about customers’ needs, interests, preferences, and behavior. This information helps personalize customers’ experience on your site, blog, or e-commerce business by making offers specific to each person, as well as providing different services based on their previous needs.

  1. Metaverse

You’ve surely heard a lot about the metaverse recently. Since Mark Zuckerberg announced the creation of a virtual 3D space where people can bring their daily life activities, companies started to rethink their business models. To make sure your business will turn into something successful, this can’t be ignored.

  1. Omnichannel

Omnichannel is a set of techniques and tools letting you communicate with your customers through different channels by making the purchase experience consistent and delivering customers the service and attention they’d receive if they were using only one communication channel. Put another way, customers can make their first contact with your business through Instagram, ask for more information about products and services through email, and complete the purchase in the physical store, without needing to start the process over and over every time they change the channel.

  1. User privacy

User’s data privacy has become a critical topic for brands. For example, companies like Apple and Google have taken actions to restrict the influence of cookies. This will set an example for businesses around the world when it comes to the data protection consumers receive.

  1. Automation

Incorporating automation tools in different departments in order to optimize resources and make repetitive tasks more efficient is an extremely valuable process for companies. For example, according to a McKinsey study, when automated, a sales team’s tasks can be optimized up to 30% , letting them segment their audience, reduce costs, and improve customer service.

  1. New purchasing options

Through the use of tools that encourage and expedite the purchase decision for users, like Facebook’s or Instagram’s Marketplace, companies can use these platforms to extend their offers to potential customers who don’t know the brand.

  1. 5G Technology

Without a doubt, 5G technology for mobile networks represents a next-generation technological leap, one which will enable data transmission, connectivity, and digitization to spread even further and increase the online presence of people in search of new products and services to consume.

Linking with competitiveness with digital business strategies:

Over the past thirty years, the rapid rise in the IT sector has been a functional strategy that must be in line with the business strategy chosen by the company. Even in this so-called adaptation idea (Henderson and Venkatraman 1993), despite the invitation for recognizing the importance of a digital business strategy that shapes business strategy and changes business processes and scope, the process has run very slowly (Venkatraman 1994). With this adaptation idea where digital business strategy is considered as a functional strategy – largely aligned to the business strategy but essentially underlying -, numerous studies have conducted about a redesign of the business process, including internal audit and approval systems, studies on the business value of the business strategy and, it is seen that the importance of digital business strategy increases as time passes among business development strategies like others (Chan and Reich 2007; Hirschheim and Sabherwal 2001; Hussin et al. 2002; Luftman and Brier 1999; Reich and Benbasat 2000; Sabherwal and Chan 2001; Sabherwal and Kirs 1994; Sledgianowski et al. 2006). In the last decade, however, impressive advances in information, communication and connectivity technologies have created new functionalities. Therefore, the decade after (.com) has established companies that use global connectivity to adapt to global connections at lower price / performance levels (hardware and software) as well as standard protocols (eg Internet and mobile web). These digital technologies fundamentally reform the traditional business strategy into modular, distributed, functional and global business processes that enable business to be conducted within the limits of time, distance and function (Banker et al. 2006; Ettlie and Pavlou 2006; Kohli and Grover 2008; Rai et al. 2012; Sambamurthy et al. 2003; Straub and Watson 2001; Subramaniam and Venkatraman 2001; Tanriverdi and Venkatraman 2005; Wheeler 2002). Considering these configurations, different definitions were made by different authors regarding the digital business strategy. According to Davidson and Vaast (2010: 2), digital business strategy is the search for opportunities based on the use of digital media and other information and communication technologies. Yaghoubi et al. (2012: 1049) emphasizes that digital business strategy is a type of entrepreneurship involving digital products or services, digital distribution, a digital workplace, a digital market, or some combination of these. According to Rashidi et al. (2013: 1), digital business strategy is an area of entrepreneurship where new technological tools such as the internet and informatics are used for business.

Facebook is considered as one of the innovative communication tools in the internet network and is widely popular for advertisers because it is spread to a wide audience of users (Yousif, 2012: 122). Facebook, users’ country and city, age, gender, profession, interests and so on. It provides a great convenience to the advertisers in terms of their diversity in terms of personal information, finding the target audience of the advertising that needs to reach the addressee directly and making the market classification from a wider perspective. In addition, many studies have shown that personal and demographic factors cause significant differences in the way consumers perceive social media advertisements. (Taylor et al., 2011; Lukka and James, 2014). In the past, most of the information technologies adopted by organizations were perceived as added tools to increase productivity or lower operating costs. While IT is linked to people’s work as a work that can be pushed aside, work can continue (El Sawy 2003). As a result, the broad strategic view was that the IT strategy should align with the firm’s business strategy (Henderson and Venkatraman 1993). However, over the past two decades, the digital infrastructure of business and society has radically changed, and researchers and executives have acknowledged that IT’s role has undergone a transformation. IT became involved in the workspace and homes, becoming an inevitable part of both daily routines and business processes.

Social information technologies are an example of a new technology that is deeply embedded in our daily routine and personal interactions; to the point where it is almost impossible to separate business and social processes from underlying IT infrastructures. What’s more, social computing creates a shift in empowering users with relatively low technological sophistication to transfer computing power from organizations to individuals, to show the creativity of the web, to participate in social intervention, to contribute to their expertise, to share content, to enable them to share in bulk. build new tools and disseminate information (Parameswaran and Whinston 2007, p. 753). Like other capital stocks (eg property, facilities and equipment), IT capital is an economic production factor. Unlike physical goods, designs are information goods and are therefore essentially unrivaled (ie a company can license their designs without losing them). In addition, the value of IT capital may be firm-specific, because a particular set of designs may require complementary assets or capabilities to successfully acquire them (Teece 1986).

Therefore, IT capital can be a source or disadvantage of competitive advantage similar to other company-specific resources. In addition to designs for customer-oriented system components (eg, user interfaces) and architectural design elements (eg programming interfaces or design rules), capital includes internal systems and processes (eg providing flow capability). Content involves the risk of managing credentials or securely processing payments( Baldwin and Clark, 2000). The current literature in Electronic Commerce has documented several advantages for companies to sell directly over the Internet. These advantages can be classified into these three channels based on the functions performed: As a communication channel: exchange of information between vendors and buyers. To access, edit and transmit information. To enhance interaction and perceptual experience. Gather information about customers through surveys and competitions for new product development and promotion, relationship building and personalization.

Processes (P): define steps that interact with software to create an ability (eg data compilation for mining software); This ensures protection of information, customization of design, and loss of opportunities that may arise from openness in sharing software, processes and information. Lack of openness can also prevent customers from interacting with the company. Therefore, when formulating Digital Business Strategy, companies should assess the balance between managing the visibility of the system and the value of micro-applications (Pavlou and El Sawy; 2006). Traditional business strategy understanding includes acquiring and obtainment new opportunities, transforming these new opportunities into saleable products or services, gaining value, taking risks and realizing the gains (Yaghoubi et al., 2012: 1048).

Digital business strategy, on the other hand, adapts the characteristics of traditional business strategy to the digital field and associates it with better sensitivity to risk, creativity or agility (Van Horne et al., 2016: 296). There are different aspects of digital business strategy than traditional business strategy (Hull et al., 2007: 296-298; Hafezieh et al., 2011: 269-270; Yaghoubi et al., 2012: 1048; Özdemir, 2016: 6). These differences are shown in Table 2 comparatively.

Examples of Digital Business:

Uber capitalizes on the widespread adoption of smartphones and utilizes a business model that allows them to maintain relatively low capital assets. A traditional taxi company must own and maintain vehicles, as well as contribute overhead to recruiting and managing employees; an e-business version would allow customers to schedule a taxi online and perhaps view past trips, but the essential experience would remain the same.

Uber cements its place as a digital business because it is, at its core, a platform that connects people and drivers on a massive scale through the internet, while creating an experience that improves on what was previously available to people.

Netflix is a good example of a company that switched from e-business to digital business. Originally, Netflix used technology to manage an inventory system and mail people DVDs, providing an experience that was more convenient, but ultimately fairly similar to movie rental stores. However, once it gave customers the option to stream video on demand, it disrupted itself and transformed the way that people view film and television media. The ability to consume movies and TV shows at any time or place is impossible without the widespread internet access that most consumers have today.

Disney is one traditional business that has embraced digital technology in order to enhance experiences in its theme parks. The goal of its MagicBand, a wristband that uses RFID and radio to connect with sensors in the park, is to improve five key elements that are part of every Park experience: going to an attraction, staying in a hotel, dining at a restaurant, taking a photo and sending it to friends or family, and buying merchandise as a souvenir.

Guests receive the MagicBand a few weeks before the visit and can use it to enter the park, buy food or merchandise, reserve attractions, and watch real time data on wait times. At the end of the day, guests have an experience that moves fluidly between digital and physical.

Scale of Digital Business Strategy:

How should we think about the scale of digital business strategy under digital conditions? Scale has been a primary driver of profitability in the industrial age. Scale confers benefits of lower unit cost of products and helps enhance profitability. When infrastructure becomes increasingly digital, rather than thinking of scale only in terms of physical factors of production, supply chains, or geographic coverage, we need to think of scale in both physical and digital terms. We have identified at least four ways that scale of digital business strategy is distinct and qualitatively different. When digital intensity increases and digital business strategy takes hold, scaling options are more likely to be based on alliances and partnerships through shared digital assets with other firms in the business ecosystem across different traditional industry boundaries. While we already see such scaling strategies in settings such as travel and hospitality as they share reservation systems, loyalty programs, and online cross selling (e.g., Star Alliance, One World), we will increasingly see companies rely on different firms to pull together the requisite scale in areas where they do not see competitive advantage. We expect that as firms continue to assess their unique drivers of advantage in digital settings, they will modularize their business processes and rely on plug-and-play capabilities for richly linking digital assets. We already see this with many new startups relying on linkages through application programming interfaces (APIs) and web services.


Finally, we believe that advances in our thinking about digital business strategy would occur as we articulate the shifts in sources of value creation through digital resources and the location of value capture in digital business networks and ecosystems. In this paper, we have adopted a general view of digital business strategy arising from the resource-based view and the dynamic capabilities perspective. Just as strategic management researchers have refined the general ideas of the resource-based view and dynamic capabilities over the last two decades, we expect that we would have a more refined and detailed understanding of digital resources and their role in impacting value creation, capture, and distribution of business value among partner firms in emerging industry ecosystems.

We hope that this collection of papers will provoke IS researchers and strategic management researchers to step up their collaborative efforts and will provide an energizing platform to help produce the next generation of insights around digital business strategy. It is a very exciting area whose time has come. The future of digital business strategy is already here, it is just unevenly distributed!


In today’s world, where competition among sectors is increasing day by day, it is observed that, more than local actors, companies competing with stronger companies in the global market should update their strategies day by day. In order to obtain competitive advantage, it is seen that providing the changes made on the strategies they have determined within and outside the company in the digital environment in today’s conditions is a necessary strategic transformation rather than a recommendation. Based on these results, it is expected that digital entrepreneurship will have more widespread application areas in the world in the future. For this reason, businesses should consider the developments in digital technologies as opportunities, and use technologies appropriate to their own culture, goals, structures and processes to go beyond customer expectations and develop new business models. In addition to government grant, there is a need for centers to provide consultancy and training for entrepreneurs on digital transformation. As a result of this article, it is foreseen that companies that have not been able to form or develop their digital business strategy will lose their competitive advantage among their competitors and lose their position in the sector.



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