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Strategic Principles for Competing in the Digital Age

Strategic principles for competing in the digital ageDigitization is rewriting the rules of competition, with incumbent companies most at risk of being left behind. Here are six critical decisions CEOs must make to address the strategic challenge posed by the digital revolution

Mickinsy office

Strategic principles for competing in the digital age | McKinsey & Company

Seven forces at workOur research and experience with leading companies point to seven trends that could redefine competition.

1. New pressure on prices and margins

2. Competitors emerge from unexpected places

3. Winner-takes-all dynamics

4. Plug-and-play business models

5. Growing talent mismatches

6. Converging global supply and demand

7. Relentlessly evolving business models—at higher velocity

Managing the strategic challenges: Six big decisionsRethinking strategy in the face of these forces involves difficult decisions and trade-offs. Here are six of the thorniest.

Decision 1: Buy or sell businesses in your portfolio?

Decision 2: Lead your customers or follow them?

Decision 3: Cooperate or compete with new attackers?

Decision 4: Diversify or double down on digital initiatives?

Decision 5: Keep digital businesses separate or integrate them with current nondigital ones?

Decision 6: Delegate or own the digital agenda?

Regardless of the organizational or leadership model a CEO and board choose, it’s important to keep in mind that digitization is a moving target. The emergent nature of digital forces means that harnessing them is a journey, not a destination—a relentless leadership experience and a rare opportunity to reposition companies for a new era of competition and growth.

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