FIGURE 3.
5
Formulating a Digital Position Framework
WHY / WHOM
Generic Strategy
What is your generic strategy?
Do you aspire to be the cost
leader, a quality differentiator, a
niche player, or an integrator?
Value Chain Position
Where in the value chain do
you play? Upstream B2B or
downstream B2C? Both? How
vertically integrated are you in
the value chain? Who are you
partners in the value chain?
Targeted Customers
Who are your target customers?
What demographic segments, ge-
ographies, etc. are your products
and services designed?
Value Proposition
What value do you desire to
create for your targeted custom-
ers? What unique attributes will
attract customers/partners to
your products and services?
Data Value
How can you leverage data to
enhance the value proposition?
When should offerings be auto-
mated to create more data? How
can data be used to create long-
term continuous relationships?
WHAT
Fee-for-Product Model
Traditional model where a fee
is paid for discrete product or
service.
Subscription Model
A model where a subscription
is paid. Software-as-a-service is
one example.
Advertising Model
A model where users do not pay
a fee but are exposed to adver-
tisements.
Freemium Model
A model where basic services
are free, while premium services
require a fee.
Partnering Model
A model where a partner, such
as a platform provider, charges
a percentage fee on every trans-
action.
HOW
Network Economies
Lever network externalities to
offer a unique product or service
while building a defensible
position.
Switch Costs
Attempt to lock-in customers to
a desired technology or platform
by creating switch costs to
alternatives.
Counter Positioning
Outmaneuver rivals by offering
new products, services, or
business models that rivals are
unlikely to match.
Scale Economies
Aim for early and quick growth
to capture economies of scale
that discourages competition.
Cornered Resources
Aim to secure scarce resources,
such as patents, to establish a
valuable defensible position.
Branding
Lever marketing and a distinct
identity to increase customer
willingness to pay for your prod-
ucts and services.
Processing Power
Lever learning-curves and
inter-dependencies to create
advantages that are difficult for
others to copy.