The Future of Competitive Strategy

Introduction

7

©2022 MIT. This excerpt is from The Future of Competitive Strategy by Mohan Subramaniam, published by The MIT Press.

As sensors continue providing real-time data, they help firms fur- ther refine and generate finer-grained product and user profiles. The consequent deep insights set up a foundation for firms to offer more customized product features, new experiences for customers, and fresh opportunities to create value. Caterpillar, for example, developed a new design of its motor grader to more effectively move gravel rather than dirt, reducing its costs of production, offering a more competitive price, and improving margins. Sleep Number Corporation offers new wellness services anchored on getting better sleep. Allstate can offer customized and more attractive premiums for safer drivers. Nike, similarly, can offer a different shoe that more precisely suits the customer’s mix of walking and running preferences. Modern Digital Technologies Expand the Role of Data The kinds of insights firms can now derive from interactive data point to a transformation in the conventional purpose of products. Products are no longer meant just to deliver a functionality, build a brand, or generate revenue. Instead, products are a significant conduit to generate data that serve as wellsprings for new customer experiences. Relatedly, businesses will also observe a reversal in the roles of data and products. The prevailing role of data is to support products. Now, rather than data supporting products, products support data—because products become conduits for new kinds of product-user interaction data empowered by modern digital technologies such as sensors and the IoT. With this role reversal, products are not the only revenue generators for legacy firms. Data too become a significant revenue generator. As modern technolo- gies transform data’s key characteristics, data are assuming an expanded role in today’s corporations (see tables 0.1 and 0.2). Moreover, products are not the only source of interactive data. A variety of different sources can generate interactive data through sen- sors. Such data can come from suppliers, from assets, from different processes (such as assembly, manufacturing, bank loan applications, insurance claims), from logistical services, from retail shelves, and so