Digital Disruption & Transformation Flashcards

A legacy bank is losing market share to fintech startups offering mobile-first services. Which transformation strategy best addresses this digital disruption?

Answer: Launch a digital subsidiary to operate independently with startup agility

Creating a separate digital subsidiary allows incumbents to compete with disruptors without the constraints of legacy culture and processes.

Which characteristic best defines a 'platform business model' as seen in disruptive digital companies like Airbnb or Uber?

Answer: Facilitating value exchanges between producers and consumers in a networked marketplace

Platform businesses create value by enabling interactions between participants rather than owning and controlling resources directly.

During a digital transformation, an organization's middle managers resist new workflows. This is best addressed by:

Answer: Involving managers as change champions with clear roles in the new model

Engaging middle managers as change champions leverages their institutional knowledge while securing their buy-in for transformation success.

The 'innovator's dilemma,' as described by Clayton Christensen, refers to:

Answer: The challenge incumbents face when successful business models prevent them from adopting disruptive innovations

The innovator's dilemma describes how successful companies are blinded to disruptive threats because serving existing customers is more profitable short-term.

A manufacturing company deploys IoT sensors across its supply chain. The PRIMARY innovation value of this digital transformation is:

Answer: Enabling real-time visibility and predictive interventions across the supply chain

IoT's core value in supply chains is converting physical operations into actionable real-time data that enables predictive decision-making.

Which of the following best exemplifies 'digital disintermediation'?

Answer: A travel booking platform eliminating the need for traditional travel agents

Digital disintermediation removes intermediaries from value chains, as online travel platforms did by connecting consumers directly to airlines and hotels.

A CPI candidate is evaluating whether a digital initiative qualifies as 'transformational' versus 'incremental.' Which indicator most clearly signals transformation?

Answer: The initiative changes how value is created or delivered to customers at a fundamental level

True transformation redefines value creation or delivery, not merely improving efficiency within existing models.