Business Digital Transformation: Digital Economy and Uber's Model

Business Digital Transformation Overview

Business Digital Transformation Bachelor's Degree in Business Administration A.Y. 2024/25, 1st semester Ruggero Colombari, Ph.D. ULC barcelonaDigital Economy

Efficient Retailers and Digital Homes

Which is the most efficient retailer? BLOCKBUSTER Create Your Digital Home with AOL. FREE '5 GIFTCARD AxEss 70% அவு வீர் பயிர் up to F NETFLIX HO ENT HONG KONG TAXI hotel social bella ciao KALIBER MADEMOISELLE AGENT.45 ZEN&ZACK AMORETINA ORION 3 ZOMBIE COLONY CONTRACT VENGEANCE ROCKET INJA GO KEN OPIUM STUDENT dharma yøgã LG Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 2 | ULC barcelona C KENYA JUILLETDigital Economy

Blockbuster Store Closures

Which is the most efficient retailer? BLOCKBUSTER STORE CLOSING EVERYTHING STORE! MUST NOTHING HELD BACKE F NETFLIX HO HONG KONG TAXI bella ciao KALIBER MADEMOISELLE AGENT.45 AMORETINA ORION 3 ZOMBIE COLONY CONTRACT VENGEANCE ROCKET INJA GO KEN ON 3 OPIUM STUDENT dharma yøgã LG Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 3 | ULC barcelona hotel social ZEN&ZACK C KENYA JUILLETDigital Economy

Blockbuster vs. Netflix Competition

Which is the most efficient retailer? Blockbuster @blockbuster Follow Amanda Holpuch in New York Tweet why you're leaving Netflix. The top three most creative tweets using #GoodbyeNetflix will win a 1-year subscription to Blockbuster! 3:55 PM - 21 Sep 2011 28,952 Retweets 31,197 Likes C 1.5K 17 29K 31K Blockbuster to close remaining stores as video rental chain calls it quits Once-ubiquitous video rental chain filed for bankruptcy in 2010 and has been unable to compete with Netflix and Redbox BLOCKBUSTER VIDEO Wed 6 Nov 2013 21.23 GMT f 44 23 BLOCKBUSTER VIDEO Blockbuster will close the last 300 of its own US video rental stores by January. Photograph: Robert Sullivan/AFP/Getty Images The American strip mall staple Blockbuster is closing its remaining stores by early January, according to parent company Dish. Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 4| uic 4| barcelonaDigital Economy

Blockbuster vs Netflix: A Digital Economy Example

Netflix's Evolution and Milestones

Example: Blockbuster vs Netflix Hastings (Netflix founder) predicted as far back as 1999 that the future of media was in online streaming

1997 2003 2006 2007 2011 2013 2017 2020 FOUNDERS HAVE IDEA TO RENT DVDS BY MAIL PATENT RECEIVED FOR RENTAL SUBSCRIPTION SERVICE MEMBERSHIP SURPASSES 5 MILLION STREAMING IS INTRODUCED NETFLIX BUTTON APPEAR ON CONTROLS ORIGINAL SERIES INTRODUCED 100 MILLION GLOBAL SUBSCRIBERS MOST NOMINATED STUDIO AT ACADEMY AWARDSDigital Economy

Customer Experience: Blockbuster vs. Netflix

Example: Blockbuster vs Netflix BLOCKBUSTER ® WHAT ANNOYS CUSTOMERS WHAT DELIGHTS CUSTOMERS

• Time-consuming store visits
• Instant access from home
• No catalogs, no recommendations
• Smart content recommendation system
• Late fees, late fees, late fees
• Only subscription fees, unlimted rentals
• Expensive VCR machine
• Available on any smart devices

Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 6 - - barcelona NETFLIX Why did Netflix survive while Blockbuster didn't? Because they never lost sight of the true value they offered customers: delivering affordable home entertainment.THE RISE OF NETFLIX (AND THE FALL OF BLOCKBUSTER)

Valuation Comparison: Blockbuster and Netflix

Blockbuster Netflix They were able to identify a shift in customer needs and use digital tools to close the gap in customer experience, transforming from a DVD mailing service to a fully-fledged digital media giant.

VALUATION: $8.4 billion (1994) VALUATION: $203 billion (2020) VALUATION: $50 million (2000) VALUATION: $24 million (2010)

Blockbuster founded (1985) Netflix founded (1997) DRIFTDigital Economy

Uber's Digital Platform in the Digital Economy

Uber's Operational Model

TAXI UBER IXAT

• Digital platform connecting riders and drivers
• Algorithm-based fare adjustments + Dynamic pricing
• Digitally managed schedules & rides + Flexible driver workforce

Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 8 JULC barcelonaDigital Economy

Uber's Regulatory and Payment Advantages

TAXI UBER IXAT

• Outside traditional taxi regulations + Reduced regulatory constraints
• Integrated digital payment systems + Cashless transactions
• Digitally enabled customer-driver feedback and route optimization + Real-time tracking & ratings

Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 9 | ULC barcelonaDigital Economy

Uber London: Passenger Perspective

UBER LONDON - PASSENGERS PROBLEM SOLUTION UNIQUE VALUE PROPOSITION UNFAIR ADVANTAGE CUSTOMER SEGMENTS

• Difficult to find a cab when you need it
• Guaranteed pick up from a car through an app tracking your location
• We allow Londoners to get from A to B in a comfortable, safe and reasonably priced ride by hailing a car through an app in 1 click
• 40K drivers already active
• Young (18-24 yo are 30%), internet-savvy Londoners and tourists
• Black cabs are expensive
• See who the driver is and his rating, car plate and car model in advance
• Minicabs needs to be booked in advance and most of the time are filthy old cars
• Pay a fair price from the app, automatically
• Never know who the car driver is and if it's safe

KEY METRICS CHANNELS Cabs mostly don't accept cards Time from hail to pickup PR Referrals - invite friend and get discount EARLY ADOPTERS Black cabs and minicabs Rating received Like taxi but cheaper, easier and safer American tourists opening the app Public transports Own means of transport. Wealthy and busy professionals

COST STRUCTURE Fare based on route and idle time £5 minumum fare

REVENUE STREAMS Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 10 JULc barcelona Brand awareness 84% among adults (2016) 25- 44 yo young adults (26%) Londoners and tourists - EXISTING ALTERNATIVES Price paid HIGH-LEVEL CONCEPT Outdoor advertsDigital Economy

Uber London: Driver Perspective

UBER LONDON - DRIVERS PROBLEM SOLUTION UNIQUE VALUE PROPOSITION UNFAIR ADVANTAGE CUSTOMER SEGMENTS

• Don't get enough rides while on duty
• Get ride requests in your area as you are ending your current journey, follow directions from app
• We allow anyone with a private hire licence and a less than 5yo car to make money by passing them ride requests from trustworthy people
• 3.5M customers
• Minicab drivers or wannabes
• Brand awareness 84% among adults (2016)
• Men with day jobs struggling to keep up with family costs
• Don't know routes across London
• Decide when to work based on personal availability or fares
• Need an extra income

KEY METRICS CHANNELS Need to be flexible with working times Number of rides PR Word of mouth EXISTING ALTERNATIVES HIGH-LEVEL CONCEPT EARLY ADOPTERS Minicabs companies Revenue Like minicabs but easier. safer and more flexible Freelance chauffeur luxury drivers Other part/full time jobs

COST STRUCTURE REVENUE STREAMS One off £250 for TFL licence Petrol and maintenance 75% of ride fare tips Business use car insurance Car leasing or renting £5 minumum fare £5/month phone rental Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 11 ULC barcelona Don't feel safe with clients in minicabs See client's rating before taking the ride Global IT infrastructure Rating received outreachDigital Economy

Hotel vs. Airbnb: Digital Transformation in Hospitality

Airbnb's Digital Facilitation and Cost Advantages

HOTEL airbnb

• Digitally facilitated property sharing + Peer-to-peer rentals
• Digital platforms + Matching supply and demand
• No physical hotels + Lower operational costs

Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 12 | uic barcelonaDigital Economy

Airbnb's Scalability and Data-Driven Features

HOTEL airbnb

• Digital tools for booking + Decentralized property mgmt
• Digitally scalable to various hosts + Wider variety of lodging options
• Feedback from guest experiences + Data-driven pricing and personalized suggestions

Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 13 | ULc barcelonaDigital Economy

Domino's Pizza: A Case Study in Digital Mastery

Domino's Crisis and Customer Complaints

Example: Domino's Pizza Back in the mid to late 2000s, the organization found itself amidst a crisis. .. stock prices were also plummeting

Domino's - Dividend Adjusted Share PI $25 $20 $15 Domino's® $10 $5 $0 Jul-2004 Jul-2005 Jul-2006 Jul-2007 Jul-2008 Jul-2009

Customer complaints

• The product tasted "cheap"
• The famous "cardboard complaint"
• The sauce tasted like ketchup

. . . . Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D.Digital Economy

Domino's Pizza Tracker Innovation

Example: Domino's Pizza 2011: Pizza Tracker

• They developed a technology to keep customers updated on the progress of their orders through an app

. MENE - DOMINO'S ANYWARE Order your favorite oven-baked goodness on your favorite devices. GOOGLE HOME ALEXA SLACK MESSENGER ZERO CLICK TWEET CAR SMART TV VOICE SMART WATCH Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 15 JULC barcelonaDigital Economy

Domino's Anyware Ordering System

Example: Domino's Pizza 2015: Anyware

• In 2015, they took a step further with a system that allows customers to order from any number of devices, including Amazon Echo, Google Home, Siri, Smartwatches, Smart TVs, Slack, Facebook Messenger, and Twitter.

· MENE - DOMINO'S ANYWARE Order your favorite oven-baked goodness on your favorite devices. GOOGLE HOME ALEXA SLACK MESSENGER ZERO CLICK TWEET CAR SMART TV VOICE SMART WATCH Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 16 LULC barcelonaDigital Economy

Domino's Data Collection and Purchasing Habits

Smart Watch Car Smart TV Google Home Zero Click App Amazon Echo SMS Twitter Facebook Messenger SMS Now that you can have pizza anywhere, Dominos is not only changing your eating experience, but your purchasing habits. Most importantly, with customers ordering pizza anywhere, Dominos can collect data everywhere. Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 17 JULC barcelona 0 4 ... NDigital Economy

Digital Sales Growth for Domino's Pizza

Figure 2: Digital Sales as Percent of Total Retail Sales, US, 2014-2016 Capgemini Consulting Capgemini CONSULTING. TECHNOLOGY. OUTSOURCING 45% 50% 60% Domino's Pizza: Writing the Recipe for Digital Mastery 2014 2015 2016 Source: Domino's Annual Reports Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 18 | ULc barcelonaDigital Economy

Domino's as a Tech Company

“ As a matter of fact, the CEO of Dominos Patrick Doyle has shared countless times that they consider themselves a tech company that sells pizzas. The innovation behind their transition has been remarkable. Domino's retail sales in 2017 achieved more than 50% of all global retail sales thanks to digital technologies and the modern platform that gave them a competitive advantage over other pizza companies. Business Digital Transformation 2024/25 - Ruggero Colombari, Ph.D. 19 JULC barcelona