DEBATE ON THE FUTURE OF DIGITAL TRANSFORMATION

IA but not only, what about the other technologies such as blockchain?

24h with Loik and Phil

6h with PJ Barlatier on Open Innovation

1. Analysis of industries
2. Analysis of actors : start-ups and big companies

50% -> collective (35%) and individual (15% quiz)

50% -> final individual exam

Student presentation & discussion:

- 4 groups will be selected to present their work (10min) + 5/10min discussion

1.NEW TRENDS IN E-COMMERCE

Overview of a growing sector

5,4 trillion € : turnover of e-commerce in the world in 2022

146,9 billion € : turnover of e-commerce in France in 2022
43,6 billion € : turnover of e-commerce in France in 2012 (10 years ago)
 HUGE INCREASE in the last couple of years

E-commerce started around 20 years ago with the bubble of internet which exploded in the
beginning of 2000s

Unicorn = a privately held startup company with a value of over $1 billion. It is commonly
used in the venture capital industry (ex : Bla-bla car, Back-market, Drop box)

Is there a real competitiveness on internet ?

When you have no competition, it is harder to change your clientele segment’s way of
thinking

There are a lot of actors/websites (around 200 000 in France in 2022)

With so many actors it is harder to get traffic on your website and this can affect profitability
(more than 95% of websites make less than 1 million turnover annually)

76% of market shares are detained by big actors with over 10 million € turnover

BATX = China’s version of the GAFAMs (BAIDU, ALIBABA, TENCENT, XIAMOI)

ERNIE = China’s ChatGBT
Top online e-commerce stores in France in 2022 include Shein which made an appearance
last year.

What are the drivers of online perchases in France?

- Shipping directly to home (1st driver)

- Cheaper prices (if consumers are price sensitive they can compare the price on
different plateformes, so you havr to sell a huge amount of products to stay
profitable)
- Avoiding crowds
- Great range of products

Are IT solutions really new (such as IA)?

TURING : father of creation of IA

Garry KASPAROV : the first person to compete against Deep Blue (IA) in chess

Deep Blue is the father of Watson, an IA solution which collects information. It is used by
different actors such as Walmart

IA IS NOT NEW (created in the 1950s), it is just an evolution through machine learning
(1980s) to deep learning today (learning based on Deep Neutral Network)

IA : FEEDING WORDS
MACHINE LEARNING : BUILDING SENTENCES WITH WORDS
DEEP LEARNING : MAKING CONNECTIONS BETWEEN SENTENCES AND MAKE THEM MAKE
SENCE

THREATS : IA will destroy jobs but the goal is to move from one type of job to new ones

What would be the next digital revolution?

IoT = the Internet of Things, refers to the concept of connecting everyday objects and
devices to the internet, allowing them to collect and exchange data with each other and with
people.
(ex : smart watches, Ring Doorbell, Diabetic alert devices…)

QUANTUM COMPUTING = 50% head and 50% tail

Evaluates the probability for it to be heads or tails

Some say it is a waste of time to invest too much in quantum computing because we can’t
figure out how to optimize it’s use but others think it might enhance predictive approaches,
something that is more reliable for research models

Technologies have a “hype” evolution, at one-point VR and autonomous cars were very hype
(just a few years ago) but then we drive away from them

With Metaverse, it is difficult to identify a business model

METAVERSE = Think of the metaverse as a huge, interconnected digital universe where

people can play, work, socialize, and create things together, just like in the real world.
It's a virtual space where you can use your computer, virtual reality headset, or other
devices to explore and interact with a vast, shared online world.

Is E-commerce the new Eldorado?

E-commerce offers the possibility to address new segments and new solutions

Some of the first big actors: Yahoo, Meta…

Amazon was one of the first to invest in cloud computing, and Google needs to do the same
in order to stay competitive and keep the gap between these two manageable.

Internet is both :
- a distribution channel
- a communication channel
= a multiple source of profitability

A website can be used as :

- A showcase
- A channel to sell product/service
- A tool to develop a brand community
 Behaviors are changing faster (new generation is moving faster than expected).

Notion of ubiquity, we are never 100% present somewhere

WHAT IS BIG DATA:

Structured information: name, segmentation by age, location, social-prof catergory…

(something that you can put in an excel sheet)
Unstructured information: traces left by socia media… (complex info that needs to be
treated specifically)

They contribute to predict patterns of conception, identify habits/behaviors, attitudes

Big data refers to extremely large and complex datasets that are too large to be
effectively analyzed, processed, or managed using traditional data processing tools and
methods. It is characterized by three primary characteristics often referred to as the 4
Vs:

• Volume: Big data involves massive amounts of data. This data can range from
terabytes to petabytes and beyond. It includes information from various sources, such
as social media, sensors, transactions, and more.
• Velocity: Data is generated at an incredibly high speed in many cases. This includes
data generated in real-time or near-real-time, such as social media updates, sensor data,
or financial transactions.
• Variety: Big data encompasses diverse types of data, including structured data (like
traditional databases), semi-structured data (like XML or JSON files), and
unstructured data (like text documents, images, and videos). This variety adds
complexity to data management and analysis.
• Veracity: This refers to the quality of the data. Big data often includes noisy,
incomplete, or inconsistent data, which can make it challenging to work with.

You don’t necessarily need a lot of info, you just need info on a real event to be able to
predict.

There are 3 parties:

• 1st party: belonging to the company
• 2nd party: companies belonging to the same eco-system
• 3rd party: other companies

Retail, main evolutions:

Phigital = marrying physical shops with digital technology

Ex : if a camera detects a woman or a man, it won’t show the same ad

ROPO : Research Online Purchase Offline

Use of AI:

Visual analytics, search by image to find the product or something similar, interact
with voice (IBM has services to understand natural language)
Helps predict patterns, corelate info and help prepare collections & merch

OMNICHANNEL APPROACH:

Omnichannel: combination between online and offline simultaneously interconnected

to each other

Offline shops are scared that e-commerce will take over the market share BUT the
more u have ways to meet with your client (=contact points) and the more digital
options/tools you offer, the more you are able to maximize the turnover of the
company and the average basket.

Technologies and industries: newspapers

The first page people look at is necrology.

The traditional book editing industry

Amazon completely changed the rules of the book industry game.

With the emergence of technology, there are so many more marketing actors, so harder
to differentiate.

VUCA WORLD : Volability, Uncertainty, Complexity, Ambiguity

Il est utilisé pour décrire un environnement en constante évolution, imprévisible,

complexe et ambigu. Quelles pratiques l'entreprise doit-elle adopter pour faire face à
ces défis ?

A la fin des années 80, apparaît une nouvelle caractérisation du monde : “VUCA
World”. Ce terme très connu dans les organisations agiles (à juste titre car l’Agile est
un des meilleurs moyens en entreprise de s’adapter à cette caractérisation du monde),
permet de visualiser le monde comme étant rapidement changeant et ce de manière
incontrôlable.

BANI WORLD : Brittle, Anxious, Non-linear, Incomprehensible

Les entreprises (pour ne parler que d’elles) ont subi ces dernières années des
évènement structurants. Les entrepreneurs ont dû s’adapter et beaucoup ont mis la clé
sous la porte. Et force est de constater que ce n’est ni la première ni la dernière fois
que cela va se produire. Grèves, Virus, Climat, Ecologie, Consommation tout change.
Les spécialistes ont défini un terme pour désigner la situation : BANI world.
The Disney+ Case

They have decided to increase the subscription fee, limit to 2 screens and maybe sell
big channels such as ABC & Natural Geographics.

Conclusion
Industries can be substantially modified by new entrants, new intermediaries, substitution
offers…
The power of actors can evolve simultaneously.

STARTUPS

A new innovative firm with a high growth potential and high value perspectives.
It’s a new firm that needs to test its solution and that evolves through iterations.

A unicorn = a start-up with a value > 1 million.

Traditional strategy methods often do not work for disruptive innovations.

How can we organize and plan start-up development?

How to launch an innovative company?

Problem pinpoint (facts) -> Problem importance (facts) -> How we solve it (facts & fit) ->
Why US? (fit, complementarity, engagement) -> What we want to achieve (ambition) -> How
will we make money (business model) -> What we need (human, tech & financial
resources)-> Our next steps (business plan)

 A GOOD STORY WITH THE RIGHT CASTING

CANVAS BUSINESS MODEL:

Il permet de représenter en une seule page, au travers d’un canevas, l’ensemble de

votre modèle économique. Une fois complété, vous pourrez définir vos priorités en
faisant apparaître en un clin d’œil ce dont vous avez besoin, les démarches à accomplir
et les axes de progrès.

Smartphone industry : a disruptive business model

Xiaomi:
- An e-commerce company, not a handset manufacturer
- Sells exclusively through e-commerce : no marketing costs, no distribution network
Flash 1S sale which sold 40 000 units during the 1st flash sale in 4.2 seconds.

The lean start-up approach

MEASURE – LEARN – BUILD

You build a “minimum viable product” (MVP) with your clients

You experiment, improve, modifiy, and pivot if needed
You learn as you progress together with your clients

Ex : Zalando which sells shoes online (in the 2000s, consumers find it hard to buy shoes
without trying them on). So they invested partially to see how the consumers would react =
MVP. First shop, then website etc

EFFECTUATION APPROACH

 You do with what you have when the future is unpredictable

 Creators rarely develop their initial idea. Stakeholders/network (clients, team
members, friends, mentors, venture capitalists…)
 The start-up project evolves with the inputs ….

THE DYNAMIC CYCLE OF EFFECTUATION

The dynamic cycle of effectuation is a concept in entrepreneurship that outlines the

process entrepreneurs often follow when starting and growing a business. It was
developed by Professor Saras Sarasvathy and is in contrast to the more traditional,
goal-oriented approach called causation.

In simple terms, the dynamic cycle of effectuation can be explained as follows:

• Start with What You Have: Instead of setting a specific goal and working towards it,
entrepreneurs using effectuation start with the resources, skills, and knowledge they
already possess. They don't try to predict the future; they look at what's available to
them right now.

• Leverage Your Means: Entrepreneurs then identify and leverage the resources they
have at their disposal. They focus on what they can control, like their own skills and
the people they know, rather than trying to control external factors.

• Co-create with Stakeholders: Effectuators often involve others in the process, co-
creating opportunities with partners, customers, and investors. They are open to new
ideas and collaborations, allowing the venture to evolve based on the input and
interests of others.

• Iterate and Adapt: Effectuation is an iterative process. Entrepreneurs are constantly

adjusting and adapting their plans based on the feedback and opportunities that
arise. It's a flexible approach that embraces uncertainty.
 • Affordable Loss: Rather than focusing on potential gains, effectuators think about
what they can afford to lose if things don't go as planned. They take calculated risks
that won't put them in financial or personal jeopardy.

Escalation of commitment

• Bird-in-Hand Principle: Entrepreneurs start with what they have, focusing on their
existing resources, including their skills, knowledge, networks, and means. Instead of
setting a specific goal and then figuring out how to achieve it, they explore
opportunities that are within their immediate reach.

• Affordable Loss Principle: Effectuators think in terms of what they can afford to lose,
rather than what they hope to gain. They take calculated risks that won't jeopardize
their financial well-being or personal security. This principle emphasizes risk
management and a willingness to explore opportunities without excessive downside
risk.

• Crazy Quilt Principle: Entrepreneurs using effectuation form partnerships and

collaborations with stakeholders who are willing to commit resources and become
co-creators of the venture. They build a "crazy quilt" of relationships based on
mutual trust and shared interests. This principle emphasizes the importance of
collaboration and leveraging the resources of others.

• Lemonade Principle: Effectuators view surprises and unexpected events as

opportunities rather than obstacles. They are adaptable and open to change, and
they creatively pivot when faced with unexpected challenges. This principle
encourages entrepreneurs to be flexible and resourceful in response to changing
circumstances.

• Pilot-in-the-Plane Principle: Effectuators believe that they have control over the
future of their venture. They don't rely on predicting the future, but instead, they
shape it through their actions and decisions. They continuously adapt and adjust
their plans based on feedback and real-world experiences. This principle promotes a
proactive and iterative approach to entrepreneurship.

BUYING A COMPANY:

1. Strategic info
2. Due diligence : norms, turnover etc (need permission from the owner, this is info you
can’t find from the outsite)

FINANCIAL GROWTH

There are 6 stages of investment :

• (Pre-Seed Stage: This is the earliest stage of funding when an entrepreneur or a small
team uses their own savings, bootstrapping, or funding from friends and family to
develop a business idea, create a prototype, or conduct initial market research.)

• Seed Stage: Seed funding is the first formal investment stage. Startups at this stage often
seek funding to prove their concept, develop a prototype, and validate their business
model. Seed funding can come from angel investors, early-stage venture capital firms, or
crowdfunding platforms.

• Angel Investors: Angel investors are individuals who provide capital to startups in
exchange for equity (ownership) in the company. Angel investors often contribute funds
at the seed stage or even in the pre-seed stage. They may also provide valuable advice
and connections to the entrepreneurs.

• Series A: Startups that have proven their concept, achieved initial growth, and are
looking to scale typically seek Series A funding. This stage involves a more significant
round of financing from venture capital firms. The funding helps the company expand
and capture a larger market share.

• Series B: Series B funding is aimed at startups that have already demonstrated significant
growth and want to scale further. This round of investment is often used for expanding
operations, entering new markets, and strengthening the company's competitive
position.

• Series C and Beyond: Series C, D, and subsequent rounds represent later-stage funding
for startups that are on a path to becoming mature, established companies. These
rounds often involve large investments from institutional investors, including venture
capital firms and private equity.

• IPO (Initial Public Offering): Going public is an exit strategy for many startups. An IPO
allows a company to sell shares to the public, providing a significant source of capital for
further expansion. It also provides liquidity to early investors and employees who hold
equity in the company.

• Acquisition: Some startups may be acquired by larger companies before or after going
public. This is another common exit strategy, and it can provide founders and investors
with a return on their investment.

NFT MARKET VALUE

CRYPTO MARKET

Consequences of this “far west” : more regulation

SYNTHESIS

1. CO-EVOLUTION
 2. LEARNING
3. OPEN INNOVATION

2. Overview of business models in IT sector

3. New uses by consumers and firms and next steps

Incumbent’s strategic responses to technological evolution

1. Corporate strategies

2 levels of strategy

If you have 3 different activities, you need 3 business strategies. So choosing your portefolio
is very important.

Possible changes in business portfolio : stopping one activity to start another (ex : Aviv
France, M6 digital services, Sony with Honda

2. Business strategies

Level at which :
- You meet competitors
- You try to build a competitive advantages or a Blue Ocean
- You elaborate and run your business model

Blue Ocean = refers to a market space or industry where competition is minimal or non-
existent. In a blue ocean, companies are able to create and capture new demand for their
products or services without being constrained by existing competitors. This stands in
contrast to a "red ocean," where the market is saturated with competitors, resulting in
intense competition and often declining profit margins.

Ex with Cirque du Soleil which created an erotic show

Ex :
Airtel : comp advantage
Drouot : digitalization for competitiveness
Audodesk : Competitive advantages with BIM
Vinfast : becoming leader in electric cars

3. How to implement ?

- Alone : recruit skilled people if tech gap (ex : Drouot)

- Buy business/competences : acquisitions (ex: Axel Springer buys Se loger, Prisma
Media bought M6 digital services, Walmart)
- Combine : alliances, creation of ecosystems (ex : Sony/Honda JV)
Ex of Rossignol : application pour mesurer la performance des utilisateurs, utilisation de
Salesforce renforcer leur CRM et vendre des services

4. Innovative practices

- Experimentation (cf Rossignol) – Lean Startup approach

- Specific CEO Budget
- Internal incubator
- Startup accelerators
- Agile methods – project management
- Research unit in Silicon Valley

SHADOW COMEX : new type of structure in a company recruiting talents in order to provide
information, be a part of the people <ho will design the strategy of the company.

Sebastien Basin CEO of Accor Hotel used this strategy, he recruited people who are very far
from the hospitality industry. They use people in the mobile industry because this is what
people use to rent aribnbs and so on.

Conclusion :

Incumbents need to :
1) Revise their corporate and or business strategy
2) Find the right way to implement their new strategy (alone, alliance, acquisition)
3) Become more agile / learn to use start-up approaches

AI & BUSINESS

Expectations for generative AI

Main functions : customer operations, marketing and sales, software engeneering, and R&D

Main industries : bRANKING, high tech, lifesciences, Retail…

Workforce transformation and technical automation

Source : McKinsey

Consequences of AI

AI can be helpful to get tasks done more quickly = augmented brain

BUT can be the cause of laziness

Ex of recruitment systems, AI does not take into account original CVs in their content, it only
takes into account “normal” Gossian curbs like CVs.
Issues :

- Environmental costs
- Massive data, inscrutable models : are there biased?
- Illusions of meaning : mistakes, misinformation, crowd manipulation
- Real / fake

CYBERSECURITY

Maersk Line : 1 company in the world for maritime transport

Information system was down, linked to an attack called Notpetya. They had to create new
phone lines for captains of boats to localize them.

Adult Friend Finder : data theft

Dusseldorf Uni Hospital : Data theft and ransom
Terra Luna : Fraud and APT
Hong Kong Bank & Deepfake : CEO fraud
Solarwinds : Data theft through supply chain : by finding a weak point in the supply chain you
can access a lot of info, also companies work in networks so an attack on one company can
reach multiple others.

Biggest bata breaches and hacks in history : AOL, Yahoo etc

Main criminal actors & motivations :

Actors : Organized crime, Nation states, International terrorists, Hacktivits, Competitors

Motivation : Financial Gain, Espionage, Sabotage, Political/Religious Ideology

White hats try to identify breaches to inform companies and encourage them to fix it.

APT (ADVANCED PERSISTENT THREAT)

= a stealthy threat actor, typically a state-sponsored group which gains unauthorized access to
a computer network and remains undetected

Target 2013 case study :