4 Insightful Case Studies of Digital World
Here is a selection of case studies that illustrates the opportunities and challenges faced by some renowned companies in their digitalization journey, and the key lessons to be learned from their experiences.
Automotive Sector: Audi
Has transformed conventional showrooms into modern digital experiences, increasing sales in certain locations by over 60 percent.
Audi1, based in Germany, designs, engineers, produces and distributes cars. In 2014, their revenue was EUR 8 billion and their EBITDA was EUR 7.6 billion. With the introduction of an innovative showroom concept launched in 2012 called Audi City, Audi has changed the very way the companies sell vehicles.
Audi City offers a unique brand experience and enables visitors to explore the entire catalogue of the hands-on model range of Audi in stores located in city centres, where there is no scope for establishing large showrooms. It is an experience room where customers can discover, test and buy various models of Audi during the day. In addition, the space is used in the evenings to offer a diverse programme on readings, forums for discussion and exhibitions.
Users can seamlessly configure their Audi virtually in full size across Audi City locations in Berlin, London and Beijing, on ‘powerwalls’ throughout the store, a critical feature that is increasingly becoming a demand among the customers. Sales went up 60 percent at Audi City London from the traditional Audi showroom that previously occupied the site. In addition, they stock only four cars, reducing the cost of having to hold a large volume of stock that often does not meet the criteria of a customer.
Audi City combines architecture with technology. They use multi-touch tables, interfaces for tablet-users and powerwalls. These powerwalls allow shoppers who have their vehicles configured to look inside. Customers can even open the doors or watch the vehicles, complete with real engine noises, drive off. Audi has retrained staff working in the showroom, too. Using technological configuration tools, the new customer relations manager ensures that visitors receive consultation, which is then further adapted to their needs.
Consumer: LEGO Group
Transformed the business model and became one of the most successful toymakers, leveraging digital technologies
LEGO Group1 is involved in developing, producing, marketing and selling play materials. In about 130 countries, it offers toys as well as educational materials for children. LEGO was founded in 1932 by Ole Kirk Christiansen and is based in Billund, Denmark. It is a KIRKBI subsidiary and is currently held privately. In 2014, LEGO produced EUR 3.8 billion in sales and EUR 1.4 billion in EBITDA, with a 37.1 percent margin. It employs approximately 13,000 people at present.
LEGO experienced a slow decline (1992-2004) after a period of growth (1970-1991) and LEGO was near bankruptcy by 2004. LEGO began restructuring and digitally transforming itself through initiatives based on new revenue streams from movies, computer games and mobile apps, hitting a tipping point. The modeling capabilities of LEGO have gradually been handed over to their fans through the Digital Designer, for example (a web-based 3D design tool to create own designs). The USP for learning and growth separates it from rivals and convinces the parents about their utility from the millennial generation.
LEGO achieved a 37.1 percent EBITDA margin in 2014, an improvement of 15 percent since 2007. At CAGR, sales for LEGO rose by 20 percent from EUR 1.6 billion in 2009 to EUR 3.8 billion in 2014. In 2014, with a production budget of just $60 million, the first LEGO movie achieved sales of approximately $468 million. LEGO has gradually recovered since 2005 and is now seen as “toy wizard.”
The new business community of LEGO has been the company’s incubator, an open forum that encourages fans and partners to experiment with micro enterprises. Through introducing new digital-based companies such as movies, LEGO Mindstorms, video games and apps, linked to their block systems that are more attractive to technologically savvy consumer groups, LEGO has been able to reinvent itself.
Electricity: Schneider Electric
Have used cloud-based tools to regain power and save costs over its confidential data.
Schneider Electric1 provides the electricity and infrastructure industries and other businesses with integrated energy management solutions. For the period ending TTM 6/15, the company reported revenues of EUR 26.1 billion and EBITDA of EUR 3.9 billion (EBITDA margin 14.9 percent). Box is a cloud computing solution that offers file sharing, collaboration, and other resources that are submitted to Box’s servers to interact with files. Box, based in Los Altos, CA, was founded in 2005. It is estimated at $1.7 billion between 2012 and 2015 and its revenue has grown six-fold to $260 million.
Box is a groundbreaking approach developed by a large organization to meet the needs of workers for document sharing without sacrificing on centralized access or enterprise safety standards. It provides staff worldwide with a simple, user-friendly solution to exchange documents at any time, including using their preferred medium (mobile). The commenting function of Box enables discussions with special emphasis on the papers in view, avoiding unnecessary deliberations.
During Schneider’s 4,200-person Box pilot in 67 countries, users were so pleased that deployment could not be included in IT. Employees were inviting colleagues to participate so quickly that Box took off every 1.5 weeks at a pace of approximately 1,000 users without any push from IT. At present, Schneider has approximately 67,000 Box users and usage continues to increase. Currently, 20 TB of Schneider data is stored on the Box, none of which was previously open to the IT department. Schneider was able to offload its on-premise file servers thanks to Box, lowering costs by 30 percent.
Schneider was able to find a solution that would address the external collaboration and mobile access requirements of its customers, while providing centralized IT management and enterprise-grade security. An audit of cloud-based solutions was carried out by the IT department, with main solutions, user-friendly (UI), easy global document sharing and universal mobile access requirements. All of these conditions were fulfilled by Box. IT combined Box with the corporate social networking app Tibbr to get input from workers as the rollout progressed.
Empowering patients with mental health treatment by personalization.
Ginger.io1 is an AI-driven mobile application that aims to provide hyper-personalized mental health services. The app can determine when assistance is needed by using sensor data obtained from a patient’s phone and self-reported information to monitor patient behaviors. Ginger.io tries to achieve improved health results through behavioral analytics captured on mobile devices. By constantly tracking the customer, Ginger.io avails itself exactly when the patient actually wants it. It is more effective at targeted treatment than daily visits to a clinic.
Ginger.io’s mobile app uses data from the daily mobile usage of a patient (time spent on calls, text messages sent) and activity (distance traveled, sleep) safely and securely to map patient behavior and identify anomalies. In some situations, the app can predict signs of depression for individual patients for up to two days before external symptoms occur. In order to allow for prompt intervention in case of abnormalities or emergency, behavior data may be automatically connected to care providers and family members.
It has raised funds: $28.5 million in five rounds. The Ginger.io service has the ability to optimize clinical performance while reducing the cost of healthcare. The cohort prevented hospitalization completely for three months in a small study conducted by Centerstone, and their needs for home mobility, personal care, nutrition and a healthy living environment fell by 55 percent. Compared to none beforehand, all 10 participants expressed confidence in handling their treatment after the intervention.
To passively capture and evaluate subtle signs of behavior change to better understand the social, physical and mental wellbeing of users, Ginger.io uses machine learning and data mining. The platform uses MIT Media Lab’s new data and behavioral science study. Secures personal data using sophisticated technology and ensures compliance with the standards developed.
Logistics: Amazon Business
Extends consumer friendly platform to the B2B space, enhancing the experience of the customer.
Amazon has extended its consumer-friendly platform for companies to buy from Amazon and third parties to a specialized marketplace. Individuals can purchase on behalf of their business and integrate workflows for order approval as well as reporting. Amazon Company is an example of the transition to the B2B world in accordance with the digital customer standards. Although creating user-friendly and successful e-commerce is a challenge in the B2B world, for many of these B2B sellers, Amazon Business is a viable service or supplementary offering.
Features include free shipping for two days on orders of $49 or more, exclusive price discounts, hundreds of millions of products, integration of the purchasing system, tax-exempt purchases for qualified customers, shared payment methods, workflows for order approval, and improved order reporting, among others. Through their live expert program, they enable the producers to quickly communicate with customers and answer on product queries.
In the US alone, the B2B wholesale market accounts for between $7.2 and $8.2 trillion. Depending on the product type and the size of an order, Amazon charges third-party vendors a commission on transactions ranging from 6% to 15%. Personalization would be accessible via vertical industries such as construction, manufacturing, healthcare, education, and food service.
In 2012, Amazon originally launched Amazon Supply, which expanded to over 2.25 million products, ranging from janitorial suppliers to metal cutting equipment and industrial equipment. Afterwards, Amazon Supply was supplanted by Amazon Corporation. In April 2015, with over 250 million products and a more holistic platform for B2B businesses, Amazon Business was launched. Amazon Company is currently only open to U.S. enterprises, although it is exploring expansion into other geographies.