School Sistema Universitario Ana G Mendez; Course Title ACCOUNTING 350; Uploaded By cjoamys. When Data Creates Competitive Advantages and when it doesn't .docx. When Data Creates Competitive Advantage… There are executives and investors that thinks that is possible to use customer-data to gain, an unbeatable competitive edge. Porter, Michael E. Competitive advantage. Strategies for Competitive Advantage Cole Ehmke, M.S. It was superseded by game makers like Supercell (Clash of Clans) and Epic Games (Fortnite). New technologies have lead to great transformations in traditional business models. However, their providers won’t build strong competitive positions unless the value added by customer data is high and lasting, the data is proprietary and leads to product improvements that are hard to copy, or the data-enabled learning creates network effects. When learning from one customer translates into a better experience for other customers and when that learning can be incorporated into a product fast enough to benefit its current users, customers will care about how many other people are adopting the product. Pandora’s service remains available only in the United States (where it has a base of loyal users), while Spotify and Apple Music have become global players. Harvard Business Publishing is an affiliate of Harvard Business School. In contrast, the design improvements based on learning from the customer use of many office-productivity software products—such as Calendly for coordinating calendars and Doodle for polling people about meeting times—can be easily observed and copied. Smart Data: The Competitive Advantage . Here, the only learning that is relevant to current borrowers is that from previous borrowers, which is already reflected in the contracts and rates that current borrowers are offered. A counterexample is offered by direct online lenders, such as LendUp and LendingPoint, which learn how to make better loan decisions by examining users’ repayment history and how it correlates with various aspects of users’ profiles and behavior. Bibliography: p. Includes . Let’s look at Google Maps again. Title. One is whether the improvements are hidden or deeply embedded in a complex production process, making them hard to replicate. offering? To establish the strongest competitive position, you need them and data-enabled learning. Historically, users needed to train the software to understand their individual voices and speech patterns, and the more a person used it, the more accurate it became. In the decades ahead, improving offerings with customer data will be a prerequisite for staying in the game, and it may give incumbents an edge over new entrants. Tweet. Data . Several of the product examples we’ve discussed already—maps, search engines, and AI-based crop-management systems—can be quickly updated to incorporate the learning from current customers. A company offers can be automatically adjusted based on the, How much values is added by customer data relative to the stand alone value of the. After reaching a peak of $10.4 billion in 2012, Zynga’s market value languished below $4 billion for most of the next six years. When data from one user improves the product for that person, the firm can individually customize it, creating switching costs. Even when the data is unique or proprietary and produces valuable insights, it’s difficult to build a durable competitive advantage if the resulting enhancements can be copied by competitors without similar data. When Data Creates Competitive Advantage...And When It Doesn't . But in most cases it will not generate winner-take-all dynamics. 1. 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