The rapid change and development of digital technologies in the last decade forces companies to follow and adapt to innovations in this area. For the most part, businesses are aware that they have to use digital channels in order to maintain a healthy relationship with their key stakeholders and audiences. But few know exactly how to keep up with the digital transformation that is happening around them. In a market where fierce competition is dominant and everything is digitized, the most important requirement is to follow the innovations on time and not to be insensitive to a technology that can upset your entire business plan. In short, companies should adapt to the new digital environment.
Without technological adaptation, no company can maintain its competitive advantage. Moreover, no company has time to lose in the face of this rapid transformation. Every day we witness the birth of a new digital platform and device. Generation Y and Generation Z can not only anticipate the needs of the generation and determine their needs, but also create the need to keep up with the pace of change. In order to understand the impact of technological developments on consumer behavior and predict the changes that this change will bring across the entire value chain, companies need to focus on the issue of digital transformation. At this point, companies have to develop comprehensive digital strategies and restructure their businesses.
In an environment where customers discover, compare and buy products without leaving home where customers shop with multiple digital devices, companies will be doomed to disappear in this rapid transformation unless new business models can be established where interaction between customers, suppliers, employees and investors can be established.
The point of technological developments in our age is spreading information much faster than in the past and the response time to this new information is getting shorter. In fact, at this point, it is mentioned that technology trends have started to spread out of linearity and exponentially. In other words, a new technology that is emerging immediately reaches maturity and is rapidly beginning to disappear in the face of the destructive effects of another new technology.
Digital Demolition, Continuous Innovation, and Valuable Brands
When we look at the common points in the success of names such as Jeff Bezos, Larry Page, Richard Branson, and Elon Musk, we see that they are all names that have quickly brought up companies and brands they have established in the last decade. When we look at the world’s most valuable brands today, it is no coincidence that Google and Amazon are at the top of the list.
According to Diamandis and Kotler, the concept of exponential entrepreneurship lies at the heart of this success. Kotler argues that the way to achieve exponential entrepreneurial spirit is to understand the growth cycles of exponential technologies. Kotler and Diamandis also call this cycle of 6 phases a digital destruction cycle.
6 D Model in Digital Transformation
1. Digitization: No idea or technological innovation enters the exponential expansion trend without being digitally expressed. The rate of spread of everything digitized from music to biotechnology is much faster than that of the non-digitized.
2. Deception: Technological trends are not exponentially propagated at a linear rate. Although the diffusion rates of exponential technologies are not noticed at the beginning depending on their usage rates, the destructive effects of these new technologies, which are becoming more and more popular day by day, are in proportion to the diffusion rates.
3. Disruption: New technologies begin to spread and rapidly replace their predecessors. One of the best examples of this could be the devastation that DVD technology inflicts on the VHS market.
4. Demonetization: A large part of the industry starts to use the new technology and it is getting cheaper to produce/develop.
5. Dematerialization: Technologies are made easier to achieve physically.
6. Democratization: Technology is increasingly cheap and accessible to everyone. It can completely disappear under the destructive effect of a new technology.
Although Kotler and Diamandis have defined the digital destruction cycle as 6 phases, we should also know that this cycle starts and ends very quickly. At this point, the reasons for the failure of brands that make successful brands even more successful or are exposed to destruction and disappearance meet in a common area. The most important reason that makes brands valuable and successful is to understand the importance of providing continuous innovation and continuous innovation. If Amazon, which is an undisputed success, remained only as an online selling website, would it be possible to reach this point? By constantly improving its service, Amazon Prime has changed people’s understanding of shopping, and thanks to the technologies it uses, it has revolutionized the creation and use of Big Data. With the data she collected, she was able to analyze consumer behaviors in detail and produced entertaining technologies that would lead the consumer to buy again. Last but not least, Dash Button and Alexa have been developed by Amazon, giving the consumer the message that they already know what they need and this adds stability to the brand loyalty of Amazon users.
Winners and Losers in Continuous Innovation
Behind the success of Google, which became the second most valuable company of 2019, similar to Amazon’s success secrets are available. When we consider each of its products, such as Google Chrome, a browser designed to be fast enough for a mobile application or the modern web, we see that Google takes into account the speed of each new product. In fact, Google’s main strategy is to make things even faster. Every new technology is used brutally, quickly digests and the new masses waiting for the new audience to meet the different needs, satisfying the different problems, the fastest way to introduce the market, quickly update and market again better. In short, it has realized the speed of the digital transformation and has no problems at the point of fitting.
Most Valuable Brands List of 2019 (Forbes,2019)
The opposite of Google and Amazon success examples, which we can look at an example of failure, which is the sad story of how Kodak ended in 2012. Although Kodak invented the digital camera in 1975, it did not invest enough in new developing technologies, or it was too late for these investments. Although Kodak developed a digital camera in 1975, the first of its kind, the product was dropped for fear it would threaten Kodak’s photographic film business. In the 1990s, Kodak planned a decade-long journey to move to digital technology. Kodak continued its traditional camera and film production with a sweaty strategy. However, Kodak didn’t realize the answers to the question of why people take photographs changed. Indeed, people did not take photographs just like they used to save memories for themselves and their loved ones. People took pictures of themselves to show people what they are doing, how they spend time and how they enjoy life. There was a new medium called social media, and now people were using their cameras unrestrained to see and be liked. The most ironic part of this story was that Kodak invented the digital camera, but didn’t take his hand quickly and took no risks to complete the whole digital transformation process for their brand. In short, Kodak has always tried to be an innovative company, but has not been able to take the necessary steps fearlessly and timely, taking into account the speed of digital transformation.
In short, in a world where customers buy image, reputation, service quality, speed and lifestyle rather than just products and services, Muslim companies have to put the issue of digitalization at the top of their agenda in order to build closer relationships with their customers and achieve higher profitability. Companies should understand the importance of digitization, develop new business models, follow new technologies and implement them at full speed, and Muslim business owners should be aware of this necessity. Otherwise, they will lose their competitive advantages and will be sentenced to be deleted from the market by being far behind their competitors who are rapidly adapting to this new order.
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