Business transformation requires repositioning the core business while actively investing in the new growth business.
Transformation is not just about changing an enterprise’s cost structure or turning analog processes into digital ones. Rather, it’s about pursuing a multiphase strategy to reposition today’s business while finding new ways to grow
An organization that grew up producing newspapers, for instance, may not only lacks key skills to build a digital content company but may also actively resist embracing the digital model in order to protect the business it knows.
When Netflix announced plans in 2011 to create a stand-alone mail-based DVD company called Qwikster. This prompted a backlash from angry customers and employees — which triggered a humbling apology from Hastings the CEO.
He reformulated his plan, this time to extend the life of the core DVD business while aggressively rolling out the new streaming service in parallel.
It proved to be a winning strategy that funded the business growth into digital content.
Now, with membership of 100 million homes in 190 countries, Netflix is the leader in the movie and television landscape.
By imposing economic discipline, ruthlessly prioritizing, segmentation, retention, and monetization, business transformation assures investors of continous profitability.
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