SPP Digital Transformation Strategy 3 — Questions and Answers
Question 1: Which framework is most commonly used to assess the competitive impact of digital disruption on an existing industry?
- Balanced Scorecard
- Porter's Five Forces adapted for digital context (Correct answer)
- SWOT analysis
- McKinsey 7-S Model
Correct answer: Porter's Five Forces adapted for digital context
Porter's Five Forces, when adapted for digital dynamics, systematically evaluates how digital entrants, substitutes, and shifting bargaining power reshape industry competition.
Question 2: A retailer digitizes its supply chain but keeps its store-based business model unchanged. This approach is best described as:
- Digital business model transformation
- Digitization without business model innovation (Correct answer)
- Disruptive digital strategy
- Platform ecosystem development
Correct answer: Digitization without business model innovation
Applying digital tools to existing processes without changing the underlying business model is digitization, not full digital transformation.
Question 3: In designing a digital transformation roadmap, which sequencing principle is generally recommended for risk management?
- Launch the highest-investment initiative first to signal commitment
- Begin with quick wins that build momentum and fund longer-horizon bets (Correct answer)
- Defer customer-facing changes until internal systems are fully modernized
- Prioritize initiatives with the longest payback period to maximize NPV
Correct answer: Begin with quick wins that build momentum and fund longer-horizon bets
Starting with quick wins generates organizational credibility, early learnings, and cash flows that can fund more complex, longer-horizon transformation efforts.
Question 4: A strategic planner must choose between a cloud-native microservices architecture and a modernized monolith for a core banking platform. The primary strategic argument for microservices in a transformation context is:
- Lower total cost of ownership in year one
- Independent deployability enabling faster feature iteration by autonomous teams (Correct answer)
- Simpler vendor management and fewer integration points
- Better performance under peak transaction loads
Correct answer: Independent deployability enabling faster feature iteration by autonomous teams
Microservices enable independent deployment of services by autonomous teams, directly supporting the agility required for continuous digital transformation.
Question 5: Which change management approach is most aligned with the iterative nature of digital transformation?
- Kotter's 8-Step Model applied linearly
- Prosci ADKAR with continuous reinforcement loops (Correct answer)
- One-time 'big bang' rollout with comprehensive upfront training
- Command-and-control mandates from senior leadership
Correct answer: Prosci ADKAR with continuous reinforcement loops
ADKAR with continuous reinforcement loops accommodates the ongoing, iterative nature of digital change by repeatedly cycling through awareness, desire, knowledge, ability, and reinforcement.
Question 6: When a company establishes a separate digital business unit to avoid cultural drag from the core, the main strategic risk is:
- Overspending on the new unit's technology stack
- Failure to scale innovations back into the core business, limiting enterprise-wide impact (Correct answer)
- Attracting talent that is too entrepreneurial for long-term retention
- Regulatory scrutiny from operating two distinct business models
Correct answer: Failure to scale innovations back into the core business, limiting enterprise-wide impact
The classic failure mode of a separate digital unit is creating a 'digital island' whose innovations never integrate into and transform the core, capping total impact.
Question 7: A digital transformation strategy that prioritizes reducing customer effort across all touchpoints is primarily targeting which strategic outcome?
- Cost leadership through automation
- Customer experience differentiation (Correct answer)
- Data monetization
- Ecosystem platform growth
Correct answer: Customer experience differentiation
Reducing customer effort across touchpoints is a customer experience differentiation strategy aimed at loyalty and competitive advantage through superior interaction design.
SPP Digital Transformation Strategy 3
Which framework is most commonly used to assess the competitive impact of digital disruption on an existing industry?