Name: Sumaiya Sayeedi

SAP ID: 80201190060

MPE 25 - Trimester I
Digital Transformation
Final Examination
Question 1: -

Digital Technologies are anything that is used to make the functionality of the businesses
much easier and smoother. Examples are – Net banking, Mobile App, Social media, etc.
The two companies used to in answer are.

Let’s begin with Target Corporation: -

Target is a general merchandise retail firm that was found in the early 19th Century in
Minneapolis, United States. Their operating strategy is to provide exceptional value to
consumers through various retailing formats from high discounts, reasonable pricing to full-
service department stores.
Target began as a caterpillar in the e-commerce movement. Target has spent the last few
years working hastily on catching up with the remaining Ecommerce firms with the value of
their physical assets. In 2004, Target was a part of the Fortune 50 companies, but it was a big
doubt if Target would maintain its position in the Fortune50 companies.

Target failed to notice that ecommerce could be a big deal, they embraced it very late. Target
thought Ecommerce was not a big investment and would not be as profitable so they
outsourced those activities to Amazon.
A) What made Target Digitally Transform themselves?

Below are categorized based on the 3 main drivers of DTn: - Processing, Communication
and Storage.

i) Change in consumer’s perspective: First reason for any retail firm to digitally
transform is to stay in sync with the consumers, to meet their expectations. The in-
store experience is digitalized, the billing section is digitalized and also helping
find their store to the consumers around.
How the retailer connects with the consumer, how they acquire them and retain
them. As per a research survey, 85-90 people have been said to use their
smartphones in the store even while they shop.
This also boils down to the “Big data” , as a massive retailer that Target is, it
becomes important to analyse all the aspects of their end user behaviour(consumer
behaviour) and thoughtfully make use of it for creating better customer
 experience.

ii) Mobility: Online retail consumers use various tools while they want to purchase a
product. The same will not be available to do while in the store. Also, tasks
wherein the consumer can pay online or check about the product online using its
barcode is done through smartphones Once the consumer has done this task, the
data is stored in the back end of a tool which in the future will help the consumer
with offers or schemes related to what was viewed.

iii) Data Control: When Target digitally transformed, it showed people what they
wanted to see on their website, like for example the discounts or schemes for
regular customers. It gives the company a right to place itself in the market the
way it wants to be placed. As a company, you can also Target your audience and
feed them the information you think they should know. As the availability of big
data, customers can also access information of Target as their need be. Data is the
new fuel to run any industry, even retail and companies like Target.

iv) Competitive Advantage: When Target did not consider to digitally transform,
there was amazon that shoot its business with online platform. Target’s
competitors like Walmart, Amazon were already in the eyes of the consumers, but
for Target its Amazon handling its sales. Amazon handled Target’s website which
meant that Amazon earned commission from whatever sales Target made. Only in
2011, did Target take the website handling to themselves. Amazon was a big
player in the market already.

v) Innovation: It was “the survival of the fittest”, if Target wanted to remain in the
market despite lagging behind with a lot to catch up on, it had to do something
different. When innovation has become to new norm, every company has to strive
to be a part of the norm. Any type of digital technology has removed the barriers
that once existed for any company. To constantly innovate to survive in the game
is what pushes firms to keep up with new things in the market.

B) What are the business objectives that Target wished to achieve?

i) Remodulation: Target has remodelled around 400 stores to provide better

customer experience.  The Target stores were equipped with new technology, plus
Target also invested in infrastructure suitable for scaling, speed, and inculcate data
and analytics solutions. This includes developing new brands, working on
customer’s experience and digital strategy.

ii) Holistic strategy: Target has already inculcated the combination of Augmented
Reality, Virtual Reality and Artificial Intelligence. Target with the help of these
wanted to provide personalization for its customers with options that go beyond
digital fulfilment.

iii) International Exposure: It was very evident back in last decade, how Target
miserably failed in the Canadian market. Despite Canada, Target is more
 comfortable within its boundaries than moving international. Having said that,
Target has managed to open approx. 1900 stores across the globe. Different
countries have different shopping habits, Target did not pay heed to this but went
ahead to set up stores after stores.

iv) Inventory Management: Target has somehow failed to manage the inventory it
holds. It either has too much of something or nothing at all.

v) Online Presence: As much as Target was customer centric, it did nothing to

achieve its goal. It was not in sync with the customers. Perhaps, cause of the
wrong technology or engineers, the website was not functioning 7 out of 10 times.

C) Strategies to achieve the above objectives based on -

i) Customer Xp: Customer experience is an important for any industry because it helps
develop brand loyalty, retain customers and bring in new customers and the community
builds that way.
 Loyalty Program, was launched on October 6th 2019. This does not require the
customer to be a member but allows them to avail special sales and 1% reward for
their every trip to Target.
 Two Entrances, wherein the two entrances are divided for those who are at Target
during their leisure and another for the one’s who are busy and have dropped by to
pick an item or two essential items.
 Convenient Parking Spots, a spot close to the entrance wherein you can drive by
and pick the items you ordered online.

 Instore Experience, products relating to one category are listed on one side of the
store so it’s easy to pick up products of a particular category.
 Target Team, when a customer is looking for a product the Target team member
will help the customer than push the product. The store is equipped with
technology that is going to help the Target team members look out for inventory,
take payment and arrange delivery all from the same floor.
Also, Target has programs that help them cultivate ideas from their team members
and even customers.
 Beacon Technology, small devices located across the store that sends notifications
alerting customers having the Target App about the sales, offers etc.
 International Marketing, tracking the visitors on Target website they have
collected information about non-U. S visitors which has helped determine the
markets in other countries. Working together with Border-Free, Target has been
able to access foreign markets offering digital inventories and providing price
conversions in local currencies.

Customer Convenience = Customer Loyalty

ii) Operations: Operations in the retail industry is equated to everything that leads to
supply chain management.

 Positioning: Target has narrowed its core focus on D2E (Direct to End Customer)
and its core customers. Target has a specific market they want to focus on and
they would do their best to meet customer expectation there. This does not mean
that it leaves out on the other customer markets but that it individually focuses on
specific groups for specific categories. Brand Positioning is also one of their
strengths wherein they focus on providing fashionable high-quality products at
discounted rates.
 Wide range of Merchandise: Targets operations are for different types of
categories, namely from pharmacy to cosmetics. The digital channels used by
Target also provide for the same.
 Inventory Management: Various forms of management techniques are used to
reduce the wastage and increase the availability of products depending on the past
records and forecasting to keep as many products as needed.
 Logistics: Target has acquired grocery delivery service that delivers orders on the
same day like its competitors Amazon and Walmart.
 iii) Business Model: This basically tells us how Target works and how they make money -
As known and seen above, target is a retail corporation and started off as a departmental
store. The below being the keys to their business:

What target sell?

Target is a general merchandise store offering a wide range of products from an edited food
assortment, including perishables, dry grocery, dairy and frozen items. Its digital channels
include a range of items found in its stores, along with an assortment, such as additional sizes
and colours sold only online.

How does it sell?

Production and Distribution Chain: Like many other retailers, target focuses on the
production and logistics, they basically just label the products with the brand and then charge
less price. This is also called private label.
Third party seller: Target in 2019, began to allow 3rd party sellers to its website. Target+
market will allow sellers to join their website only by invite.

Target offers: Store card (credit or debit) with benefits like 5% off Target Runs (including in-
store Starbucks) and free 2-day shipping on hundreds of thousands of items, every day. 

Digitalizing: Browse 360-degree shoppable rooms online. Using augmented reality to see

how large an item will actually be. Have someone shop for you with Same Day Delivery
shopped by Shipt. Current target’s business model focusses on increasing their market share
through their website where they experienced an 80% high in 2018.

How it makes money?

Financing: Target has greater profit margin over its competitor Walmart. The similarity
between the two companies is low pricing but, Target does not price lower than Walmart
which gives Target a greater profit margin. Target grew digital sales an impressive 42%
during the latest quarter to 2019. Target’s shipping delegitimizing is narrowing, particularly
as it invests in fulfilment choices which promote higher traffic and reduce costs.

Seasonal Offerings: A section is specifically designed for whichever season it is. For
example, Halloween, a part of the store is for all products related to Halloween which when
visited make the customer purchase something from it. Target’s baby and toys businesses
outperform other categories during Christmas, target benefits from increased traffic around
Valentine’s Day and Easter weekend
Partnerships and Unique Products: Target has 175 partnerships, recently partnered with
Victoria Beckham for a homeware collection. These exclusive designs not only create a hype
around the store.
D) The performance pre vs post DTn and KPI of over 3 years: -

Pre-digitalization:
Target was a retail brand everyone relied on before the digitalization took over the
competitors as well. Target became a retail giant known for offering style at discount
prices. The decade saw the opening of Target Great land stores and Super Target.
After digitalization took over and Target was slow to catch up, it lost on innovation and
mostly customers that moved to Amazon or Walmart.

Below graph represents Target’s stock price and sales, which are directly related to its
performance

Post Digitalization
The graph below states it for itself that the digital sales over the period have risen. Owing
to the current situation, as of March 2020, target has lost its sales margin.

The graph below shows specifically about the digital sales or sales made online by
Target:
Key Performance Metrics are shared below: -

The above sales margins can also be taken as a point to understand the performance of
Target.

The second company we are focussing on is – Robert Bosch or Bosch.

It is a German multinational engineering and technology company. 92% of Bosch Group
is held by Robert Bosch Stiftung, a charitable institution.

Group of Companies: -

Bosch Chassis Systems India

Bosch Rexroth India
Robert Bosch Engineering and Business Solutions
Bosch Automotive Electronics India
Bosch Electric Drives India

A) What made Bosch Digitally Transform themselves?

The driving factors for Bosch were basically as listed below: -

 Need to become the Enterprise of the Future - the need for speed which
determines the customer experience a success. new age skills that can and should
be inculcated into employees to minimize the resistance and give way for
innovation. The need to grow and thrive in the changing environments and various
dynamics and that gives need to be agile.
 To be the business of the future: To deliver minimum viable product, Introduction
of Digital Product and the need for real time feedback, to work better and expand.
Changing nature of products is disrupting value chains and is pushing the
enterprises to rethink their products.
 Smart Process to be the Factories of the future: To have higher productivity gains
resulting from automation. Efficiency gains from less manual tasks. Strategic
decision making to deliver customer’s expectations faster.

B) Business objectives that Bosch wished to achieve?

  To enhance quality of life: To develop and innovate useful products and solutions
to enhance the quality of life of the consumers.
 Mobility Solutions to Business Sector: Electrification, Mobility services, Automated
driving.
 Industrial Technology Business: Retail revolution, Global standardization of
technology, presence of local, regional and international companies, Growing exports
for Indian packaging, Groceries.
 Advanced training and certification training academy.
 One stop for all products.

C) Strategies to achieve the above objectives based on –

i) Customer Xp:

 CX Transformation solutions help to successfully transform each customer contact

into a real experience. Developing highly effective concepts using innovative methods
and technologies such as Voice of the Customer, Customer Journey Mapping or
Artificial Intelligence.
 CX Delivery focuses on standard contact services centre and that covers channels of
contact. Fast and flexible for improved costs and efficiency.
 Transparency and troubleshooting with All in one solution.
 Customer retention. Bosch promises its clients to retain its customers with Loyalty
clubs, management claim and surveys to understand where they stand. Consistent
global communication to maintain quality.
 Local service centres for a better turnaround time.
 After sales service, that allows customers to have local point of contact in case of
emergency.

ii) Operations: Bosch operates on the Lean Philosophy, wherein:

 Reduce Lead Time in value creation process. Lead time refers to the time taken to
procure raw materials and to the final product.
 Minimization of losses.
 Respect the employees since they are the major assets to the company.
 Maximize value of the customer by keeping processes up to date with continuous
improvements.
 Use resources efficiently to work on the logistics. Use of info communication
technology and planning system to see the expected production needs are met and
orders are delivered.

iii) Business Model: Bosch is divided into divided into four business sectors: Mobility
Solutions, Industrial Technology, Consumer Goods, and Energy and Building
Technology.

 Mobility Solutions: Provides a series of automotive innovations so that everyone can

afford them. Ensuring cars are economical, easy to manage and driving with pleasure
becomes a part of the future mobility. A comprehensive Portfolio, Innovation, Global
presence and Quality and reliability.
 Industrial Technology: Mobile Applications such as Construction Machinery,
Material Handling, Agricultural Farming and commercial vehicles. Industrial
Applications such as Steel, machine tools and automation, Food and packaging,
Marine and offshore.
 Consumer Goods, Energy and Packaging Technology: To process and package
technology as well as handling, automation, and inspection equipment, complemented
by a comprehensive services portfolio including laboratory services, validation and
qualification of machinery, and industry-specific trainings. The change in buying
behaviour and packaging requirements need are achieved.

D) The performance pre vs post DTn and KPI of over 3 years: -

Pre-digitalization:

Bosch struggled to collaborate the economies of digitalization into its core business processes
as its workforce was operating primarily on fuzzy definitions of new-age business and digital
dynamics.
Bosch’s decade-old traditional automotive manufacturing culture challenging to implement
an organization-wide change.
The motive was to focus on the top weaknesses and threats, while simultaneously improving
existing strengths and maintaining the market leadership position.
Since Bosch was spread worldwide, it was a challenge to make digitalization the focal point
of its plan to devise new systems, processes, and models of business operations.

Post-Digitalization:

A new Digitalization model was set up based on the existing one. It was designed to focus on
digitally transforming the organizations.
It encompasses thirteen new competencies;
Software Engineering (SWE),
Artificial Intelligence (AI),
Digital Transformation (DT),
Cloud computing, etc.
and seven cross-functional competencies i.e., Business Modelling, User Experience (UX),
Agility, Change Management, etc. A clear pathway was developed to build these
competencies across all levels of hierarchy and function.
As believed by Bosch, DT is not all about technology but about cultural change as well.
90% of the above was achieved by 2019, carving Bosch’s performance upright.
the management has identified digital products and customers for all business units and, has
also digitized several processes for partners and stakeholders.

Highlights and possible performance indicators for the past 3 years –

Bosch carries a technical centre based out on Bangalore, the objective is to provide world
class solutions to automobile industry.

They also work closely with Vehicle and engine manufacturers to meet specific needs of new
generation vehicles.

Bosch has a global responsibility to design develop and manufacture single, multiple cylinder
pumps and mechanical distributor pumps for the entire Bosch India.

Bosch has a major chunk of investment in R&D with technical expertise and qualified
engineers.
Above is a graph showing the revenues earned from 2008 to 2018, showing their consistency
and growth in performance.

From the below 3 highlights Bosch has seen to maintain consistency while also focussing on
other areas of business.
Below are selected 4 performance indicators of Bosch Group, specifically in India from
2006-2010: -

Compared from 2006 to 2010, the growth of Bosch Group in India has taken a leap showing
the sweep in performance because of inculcating trainings (as discussed above) and working
on various competencies.
Question 2: Business Plan for submission to the senior management to operationalize the
DTn in Accor Hotels.

About Accor –

The Accor Hotel Group (Accor Hotels) is a leading European multinational hotel and is
considered to be the third largest hotel group in the world. It owns, manages and franchises
hotels, resorts and vacation properties. It was initially started as a Novotel and grew into
becoming Accor today.

As of recent times, Accor operates over 100 countries with about 4,800 hotels across the
globe. It has 704,000 rooms of capacity and the hotels range from luxurious to economical.

In 2013, Accor revamped its business by dividing them into 2 – one concentrating on hotel
business and another concentrating on real estate and asset management.

Now, having established itself and expanding over countries, what is the need for them to
digitalize their business or their services? Let’s understand this from the need to digitalize to
how do we measure our success post transforming.

A) Project Charter

i) Reasons for the project –

 Customer needs and expectations, with a change in the environment and availability
of so much resource the customers also expect more from the services they use.
Example – the use of mobile phones or the availability of internet has made customers
want more or to do more from it.
 Internet of Things (IoT), we are in that phase of transformation wherein devices,
databases and every other technology is connected to another without any human
intervention.
 Improve quality of service, Hyper personalization - with the help of customer
feedback from various websites, customer experience through various social media
platforms (since hotel industry is customer centric) they can work to build better
quality of service.
 Applications, Mobile will remain the backbone of technology when everything can be
done on the tip of the finger. By using these applications or creating specifically one
for Accor will be of help in terms of marketing and sales.
 Customer relations, chatbots are a major hype in the market. Accor could use chatbots
to stay in touch with their customers and even help those who visit their website or
App.
 Existence of Augmented and Virtual reality: Providing a virtual tour through the
apps, websites would add more to what customers think of the hotel. Many times,
what hotels show in pictures is not what it is. This will help build a better connection
with the customer’s mind.

Increase
communication
flows

Decrease costs
Reduce waiting
and improve
time
revenues

Benefits of DTn

Improve Know your

performance customer

Personalize your
service

ii) Focus areas of Digitalization: - In general the below are the focus areas –
 But Accor group could focus on the below: -

 Data and Agility: To become agile is to be accustomed to every other job, here
particularly in the hotel industry. Using of Big data to analyse and process to know
how to serve better to the guests. If a customer prefers privacy, then they are to be
given those staff who are guest passioned and it is a great sign of personalization and
creates an impact on the customer.

 Reservation systems: With the help of IT and digitalization, Accor must focus better
on the reservation system. The customer would not prefer being navigated to the
website every time they choose to book a room.

 Better goals and objectives: Accor cannot focus solely on the number of rooms they
sold every day but it should go beyond that to build relationships, not only offer
rooms but to offer meeting rooms, work stations etc.

 Becoming faster: This goes back to IT and people, wherein they could work on
websites that makes sure a customer wanting to book a room should not take more
than 5mins of their time. This same process should be much faster on a handset.

 Retaining customers: Loyalty programs, partnerships with events, offers that a

customer will not deny or will make use of by sending another customer or use it
within the span of time.

 Culture: Culture could work both way but it starts from the hotel because they are at
the delivering end and that impacts the customer. If the work culture for the
employees is satisfactory it would lead to better service to the customers since they
are the frontline service delivers. Similarly, every staff working directly with the
customer or the ones working backend, must be trained to be agile. Resisting change
in an industry as dynamic as the hotel industry with new emerging competitors, would
be a major setback.

 Focussing on their Employees: IT and Data are more so the backend of the Hotel
industry and the ones working on it are a major asset, they must be given the right
solution to help deliver service of high value.

 Infrastructure: Blockchain has essentially decentralized booking platforms to give

hotels more power and away from the OTAs, opening the door to commission-free
booking, which the customer and the hotel would have to pay to the 3rd party.

 Environment: The location of the hotels is a major decision maker for the customers.
Millennials choose destination after they have chosen the hotel, they want to stay in.
Becoming a “smart building”, to have sensors that are connected to the hotel and to
the customers bedrooms.
 Ecommerce Subject Technology Gap

DTn Gaps
System Elements
Platform and tech Rules Productivity Gap
Drivers of Digital Transformation

Big data and Community Policy Gap

Inteligence
Division of Labor
AI and IoT
Policy and
Governance
Fiscal and Tech
Architecture

With respect to the above-mentioned focus areas, lets mention about the gaps as well
and we can divide them into 3 as mentioned above in the chart –

 Technology Gap – The Digital providers are dominant as everyday something new
comes into the market, but this has created a gap for hotels or even travel at large. The
amount of IoTs present, the hotels who are prominent and big players take the most
stake in the market not allowing new entrants. However, any faulty software or a virus
that attacks the technology side of the business could halt most of the activities
happening around the world for the hotel and for the customers.

 Productivity Gap – Platforms that have held data for years are now the like the Holy
book for the travellers. Big data, as we call it, cumulatively makes use of the all the
data and the service providers make use of it. The use of digital content, and data
analytics could be considered a gap in productivity. Somewhere, so to believe, we can
say all that’s on the internet cannot be true, likewise information held by these
websites cannot be legitimate.
On the flip side, digitalization has created new jobs in travel and hotel industry giving
more need for new skills and knowledge

 Policy Gap: E-commerce has rules which prohibit using local facility that country
invested in establishing, employing local people and training them, this creates a
problem of dependency. As trade-off between market access and losing the profit,
hotels have to sell their products through channels and implement digitalization rules.
Ecommerce has also put restrictions on free data flow and priority of financial service
in secure transactions have brought down the use of electronic payment method.
This policy gap also affects the culture the Hotel represents because of various
restrictions laid out by Ecommerce.
Benefits: Since the plan was designed keeping Customers, employees and partners in
mind lets talk about the benefits from that perspective:

 Customers: Accor can take into account that the customers have mobile phones in
hand, rolling out of a single application could ease all tasks that are during, before and
after the stay.
A personalized(Hyper personalization) is the closest way to keep your customers and
understanding their preferences to make their stay better.
Every stage of activity will be seamless, from the payment to the checking and the
LeClub Accor hotels card.
Online booking of seminar facilities, workstations, increasingly incorporating B2B
will bring in more clients and customers.

 Employees and Partners: Employee friendly programs to boost the morale of the
employees, making their service the most looked upon since they are the direct
contact to the customers.
Encouraging experience sharing via Accor Live will not only motivate the employees
but acts as a training tool for the employees to act correctly in situations of need.
Offering the most comprehensive dynamic pricing and revenue management solutions
Accor will be the most transparent partner.

iii) The risks identified are similar to the gaps we see in the transformation.

B) Estimated Budget for the plan:

 Areas Amount($/Hotel)
Website and App redesign $2,000-$5,000
Ongoing Website and App  $300-600/ month (minimum)
Maintenance, Management, &
Hosting
Ongoing Search Engine Optimization  $500-$2,000/ month
Social Media Marketing $500-$3,000/ month (May vary based on channel)
Paid Advertising  
* Paid Search $3,000-$5,000+/ month
*Metasearch Google: $500/ month
  TripAdvisor: $500/ month
  Kayak: $250/ month
  Trivago: $250/ month
Display (Digital awareness) $500-$1000 per month
Additional Digital Marketing Services minimum of $500/ month
Targeted Promotions $800 and $2,000+.
Blog Post $200 per blog post.

C) Business Plan and model at a glance

 D) Key metrics to measure success of DTn:

 Improved performance and scalability: All client applications exchange information

through Accor’s Integration Platform. As per records, they have 5million messages
per day and will be adding more services around the booking domain. And eventually
increasing the volume to 300%. To overcome technology gap, TIBCO software is
being used to ensure efficient working.
 Ease of Speed: TIBCO has made a difference in the area of speed as well. The
information is standardized. The customer data is retrieved and is always integrated
the same way, so right information is put across.
 Simplification: Modular building blocks to execute business processes and limit the
impact of new needs. Defining a way, the business wants to execute their process and
simultaneously structure modular modular business services to meet those processes.
 Market Penetration Index: Earlier, Accor was exceptionally weak economic
environment, which caused revenue to decline. But now, the growth has been
increasing and is expected to make better sales and results by 2025.
 RevPAR: Revenues made per room is basically Accor’s revenue per available room.
The highest rate of RevPAR is seen in North America, Central America and
Caribbean.

To conclude,
Accor is an established, worldwide 50-years-experience hotel chain, having faced challenges,
smoothly and profitably, by new actor in the market, as OTAs, Review site, Travel blogs and
Social network and the rise of mobile connectivity, which have influenced the costumer
journey in the hotel and tourism sector and shaped and empowered the customer. The supply
and the demand chain will have better way to success in future. the business expansion will
make the organisation stronger.

Accor will be a best global leader in near future. It makes a constant focus on the long term
sometimes taking bold action but never excessive risk.