Case Synopsis
The case study includes the features of digital disruption that happened inside Maersk, which
is a Danish company and a world leader of shipment and logistics industry. The case revolves
around how operations in Maersk have changed from manual-based process to cloud-based
processes. The case also includes the financial and other performance outcomes as a result of
the digital transformation.
Key Questions
Key questions surrounding the discussion regarding digital disruption include:
How business leaders can take advantage through technological disruption?
Which business models can assist these leaders to reinforce the transformation?
Which analytical frameworks and guiding principles can help in accomplishing the
change?
Theoretical Principles for Digital Disruption
The continuous alterations in products/services and operations of an organization due to
digital disruption can be understood in terms of first and second order disruptions.
First order disruptions refer to the change, In second-order disruption, an entirely
which results in an increase in value for the new business model emerges because of
owner/producer due to the digitization of digital disruption. Second-order digitization
products/services. This includes factors like is the result of an immense internal
reduced wastes, reduced costs, higher digitization that affects the external
efficiency, improved performance, better operations (Stewart, Schatz, & Khare, 2017).
customer service, etc. The present case Because of such disruption, the old business
highlights how first order disruption model is replaced and other factors like
occurred in Maersk as it moved towards value propositions, customer relationships,
technology-based operations (Stewart, and value chains are re-evaluated.
Schatz, & Khare, 2017).
In shipping industry, digital innovation revolves around three basic factors:
Digital technologies
Digital Solutions
Digital Models and Management Activities
Digital technologies mainly include IoT technology, blockchain, artificial intelligence, and
data analytics. These technologies industry players to deploy digital solutions according to
the extent of their resources (Lambrou, Watanabe, & Iida, 2019). Main solutions include smart
shipping and blockchain. Companies integrate these solutions in their technical infrastructure.
This adaptation, done either through in-house effort or from outsourcing, characterizes the
digital transformation in that organization (Stewart, Schatz, & Khare, 2017). In-turn, these
innovation solutions are shaped eventually according to the business models and management
practices of the company. This amalgam of digital solutions and the internal practices result
in digital transformation, which also translates into changes in the business model ( Lambrou,
Watanabe, & Iida, 2019)
Drivers of Digital Transformation
Cost-Efficiency
Digital disruption is highly effective in terms of cost-efficiency. Solutions like artificial
intelligence, big data management and analysis, and internet of things can lower down failure
rate for several processes (Lambrou, Watanabe, & Iida, 2019) . Fuel and cargo monitoring, staff
cost optimization, integrated designs, and predictive maintenance are some of the factors
behind cutting the costs incurred in traditional models
Customer Expectations
Digital revolution in the world and the resulting high expectations of customers play a huge
role in influencing digital transformation in organizations ( Lambrou, Watanabe, & Iida, 2019).
Customer and partner companies demand high quality services that mostly includes the
ability to trace the freight in real-time.
Market Pressure
Pressure from other industry players and the race to gain the absolute competitive advantage
also acts as a driving factor for digital disruption. Shipping technologies are meant to provide
the utmost experience to the customers and to fulfil the market standards. New knowledge
and technology provides these companies with incentives to explore new market options and
ways to create value.
Procedural Improvement
The desire to improve the operations and make them autonomous and self-managing is also a
significant reason behind the adoption of organization-wide digital technologies ( Lambrou,
Watanabe, & Iida, 2019). Companies perceive different benefits such as safety of commodities,
synchronization of processes, time management, and self-adjustment while incorporating
digital solutions in their business models.
Features of Digital Disruption
Below is an explanation of features of transformation through digital disruption.
Disruption Features Explanation
Value chain Digital disruption serves as an intermediate
between suppliers and users and can alter the
value chain.
Organizational Identity The identity of an organization engaged in
digital disruption may change as a result.
Big data Digital transformation mostly includes a
strategy that incorporates the analysis of big
data.
Digital Platforms Digital disruption is often followed by an
innovation in software systems and digital
processes in an organization.
Offers Nature of offers range from small to large-
scale services. Both electronic devices and
software applications are used to engage
customers.
Business control Business control in digital disruption is
defined by automaton, interaction, and real-
time control.
Sustainability Digital transformation results in efficient and
better use of resources; hence, ensures
sustainability.
Many of the above-mentioned features are enabled when organizations implement and bring
together a number of different developments such as cloud computing, data analytics, virtual
or augmented reality, artificial intelligence, wearable electronic devices, and internet of
things. When these technologies are combined, information between different networks is
conveyed more efficiently on demand. This feature of connected and intelligent information
delivery is the basis for the digital disruption that occurs in any organization.
Elements of Digital Disruption
Digital Innovation
Digital innovation refers to the amalgam of digital and other components of an organization
in order to come up with innovative products or services (Skog, Wimelius and Sandberg,
2018). The main purpose of innovation is to enhance the design and development of products,
processes, and even business models. Although researchers regard it as both a process and a
outcome, the main thing to note here is that innovation is enabled by a digital transformation.
As it is also a process, digital innovatin can also enable further innovation in the future.
Digital Ecosystems
As suggested by Skog, Wimelius and Sandberg (2018), digital ecosystems refer to as“
sociotechnical networks of interdependent digital technologies and associated actors that are
related based on a specific context of use”. The actors included in this ecosystem are
customers, firms, third-party service providers, suppliers etc. These actors can have an
influence on external actors depending on how they relate with them. This network of
technology and interconnectedness among actors provide an opportunity to automate business
and enhance growth process.
Value Logics
It refers to the rationale for design and implementation of digital innovation to create value.
This rationale acts as a guiding principle for the actors in the formation of a business model
and the subsequent services. Hence, when an innovation is implemented in the digital
ecosystem, it enables and guides the actions of the actors to achieve value logics.
Reference
Skog, D. A., Wimelius, H., & Sandberg, J. (2018). Digital disruption. Business & Information Systems
Engineering, 60(5), 431-437.
Stewart, B., Schatz, R., & Khare, A. (2017). Making Sense of Digital Disruption Using a Conceptual
Two-Order Model. In Phantom Ex Machina (pp. 3-21). Springer, Cham.
Lambrou, M., Watanabe, D., & Iida, J. (2019). Shipping digitalization management: conceptualization,
typology and antecedents. Journal of Shipping and Trade, 4(1), 11.
