Digital transformation – challenge and opportunity.

Many businesses still need to deal with digital the transformation of their market. What does it mean for the company’s business model? What opportunities arise? How much of the physical world will businesses need in the future?

Living in two worlds

The digital transformation is gaining speed. It brings challenges and risks along with great opportunities. The question facing management is not whether to go digital, but to what degree. At what speed should companies travel the digital path? Why will maintaining a physical presence remain central in the future? These are questions companies living in both worlds must answer.

It can happen to anyone

It is hard to believe that Kodak invented the first megapixel sensor – the cornerstone of digital camera technology. Kodak’s worth depreciated in just a few years while competitors benefited from the invention. Once the market leader, Kodak practically disappeared from the B2C-market and filed for bankruptcy in 2011. Regardless of its pioneering strides in old and new technology, Kodak’s fate was sealed. Hindsight is 20/20 and is not helpful after the fact. But companies can learn from these experiences, relate them to their business and make the right decisions going forward.

Business models under close scrutiny

Many areas of life continue to move into the digital realm. Companies that resist this phenomenon will likely share Kodak’s fate. To avoid this scenario, companies need to track the impact of digitalization on their portfolios regularly and adapt them accordingly. What new technologies are available? Are they relevant to my line of business? What challenges and opportunities do they hold?

The right mix of the physical and the digital world

Let us not forget: while brands in the physical world can cater to all five senses, the digital world is restricted to two (hearing and seeing). This fact is often underestimated when evaluating the physical aspect of a company’s sales or communications (consulting, POS, flyers, catalogues etc.). What appears to be the right approach with regard to costs can turn fatal with regard to impact. While many heavyweights of the physical world successively withdraw from it, formerly digital-focused companies (e.g. Zalando) are entering it. The key is to strike the right balance between the physical and digital world, rather than choose between them.

Afraid of cannibalization

Many companies tend not to hasten digitization when they see their business shifting into the digital world. Their fear of cannibalizing one’s own business is too big. However, current trends and experience show that it is better to move forward in the new world and take the lead, should the development trend have respective relevance. Regardless of whether it is an emerging distribution channel or a new product technology, a company must always keep all business aspects in mind.

Embracing the future by one’s own standards

It is always important for companies to anchor their established brand values ​​in both the physical and digital worlds. Companies can quickly be lured into interchangeability when entering the digital world, resulting in offerings that are exchangeable. Examples of this development are newspapers whose editorial quality in the digital world differs greatly from that in the physical world (despite the thinning-out and banding-together of editorial staff). Even prestigious papers are not spared. This is why it is imperative that companies realize their value in both worlds.


The digital transformation is a constant challenge for many business models, but it also offers tremendous opportunities. Technological capabilities continue to evolve rapidly along with the rate of impact. Since this trend is not going away, companies and their employees must adapt. Whoever stays in tune with changing demands now, will be able to champion the future.

For a future that works.