Sunday, April 23, 2017

Digital Disruption - McKinsey (April 2017)

http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-strategy-and-corporate-finance-blog/think-digital-is-a-big-deal-you-aint-seen-nothing-yet?cid=reinventing-eml-alt-mip-mck-oth-1704&hlkid=a392bc6844d5492c86d86913d2625b7d&hctky=3200528&hdpid=08fcf9d6-8466-444c-bd58-8609402719b9


 – All the talk of digital disruption turning incumbents into dinosaurs and unicorns into masters of entirely new domains might lead you to think this is already an old narrative—so 2016. In fact, digitization has barely started, and so has the accompanying upheaval.
Digital technologies and processes have penetrated only about 35% of the way into the average industry,...Globally, digital disruption is shaving 45% off incumbent companies’ revenue growth and 35% off their earnings before interest and taxes (EBIT). As digitization accelerates, the hit to revenues and profits of digital laggards will grow significantly, even as the digital leaders capture disproportionate gains.
...he most widely discussed dimension is the way digitization enables new entrants using disruptive models to penetrate existing industries. Today, our research finds, those digital newcomers own about 17% of total revenue worldwide...
...customers linked via crowd-sourcing platforms and middlemen eliminated.
...incumbent companies have rarely ventured to disrupt their own markets: only 9% ... Rather, incumbents’ digital strategies have focused primarily on digital distribution and marketing, ...it’s really “table stakes” for staying in the game.
... digitizing supply chains—a mere 2% are focusing their digital strategies on that...Amazon and Alibaba...
...media and high tech are the most digitally advanced of the 10 major sectors we studied, while automotive and consumer packaged goods (CPG) are the least digitized. ... the more digitally advanced an industry is, the larger the negative impact on incumbents that fail to act. 



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