Digitalization transforms the market, fades the boundaries between different industries and changes the logic behind companies’ value creation and utilization. It also has a strong impact on consumer behavior and purchase patterns. Because of these reasons, digitalization requires companies to make major changes to their business.
For her dissertation, Susanna Takkunen, M.Sc. (Econ.), followed eight international companies operating within the consumer goods industry. In her research, she interviewed the companies’ employees, attended their workshops and discussed research results with them.
The results indicated that the companies' interpretation of and attitude towards digitalization was determined by whether they considered their primary customer base to be retailers or consumer customers. The companies which believed that digitalization would drastically change consumer behavior realized that in order to succeed in the market, they would need to change their business model and focus on the consumer rather than the retailer.
Customer-centric thinking has been talked about for decades, but in practice, companies in the consumer goods industry have often considered retailers to be their primary customer group. Business models have been based on the idea of consumers buying products from a specific location, with companies focusing on the retailer and competing for specific advertising spots and shelf space.
In the digital world and amid its transformation, however, the way of business thinking needs to change, says Takkunen. Today, consumers watch TV series and movies from ad-free streaming services and decide for themselves whether they want to receive advertising messages or even visit brick-and-mortar stores at all. This is why the role of retailers in the value chain is now changing.
According to Takkunen, surprisingly often there is uncertainty within companies as to whether their primary customer base is consumers or retailers. She says that in order for the transition from retailer-centric to consumer-centric thinking to succeed, a clear company policy must be laid out by the upper management, shifting focus onto the end users of the products.
Sufficient time must also be set aside for digital transformation. “It is often thought that digitalization needs to happen right away. However, in the companies that have succeeded in their transformation, the process has taken up to 7 or 8 years, and even after that, there are still aspects that require attention. But what has changed in those companies is the way of thinking, with retail trade no longer dominating.”
“If companies do not start strong in their transformation process, in five years’ time they won’t be able to do so anymore, as new players are entering the industry all the time. Companies do understand what digitalization is all about, but the challenge is to understand what needs to change, and how.”
Susanna Takkunen's dissertation has been funded by Business Finland and the Jenny and Antti Wihuri Foundation. Link to the dissertation.
Defense of DBA dissertation
The DBA dissertation of Susanna Takkunen, Master of Science (Economics) "Understanding Organizational Orientations Towards Digitalization: A Sensemaking Apporach" is examined by Aalto University School of Business at 12.00 on Friday September 10, 2021 in hall Osipow at Aalto University Töölö.
You can follow the defense on Zoom.
Meeting ID: 852 5560 7573
Professor Siegfried Gudergan from the University of Waikato is the opponent and Professor Tomas Falk of Aalto University School of Business acts as the custos.
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