Page 58 - The Fourth Industrial Revolution

experience. This is only as good as the weakest link in the partnership

chain. Companies need to go well beyond marketing and sales agreements to
understand how to adopt comprehensive collaborative approaches. The
fourth industrial revolution forces companies to think about how offline and
online worlds work together in practice.

3.2.4 New Operating Models

All these different impacts require companies to rethink their operating
models. Accordingly, strategic planning is being challenged by the need for

companies to operate faster and with greater agility.

As mentioned earlier, an important operating model enabled by the network

effects of digitization is the platform. While the third industrial revolution
saw the emergence of purely digital platforms, a hallmark of the fourth
industrial revolution is the appearance of global platforms intimately
connected to the physical world. The platform strategy is both profitable

and disruptive. Research by the MIT Sloan School of Management shows
that 14 out of the top 30 brands by market capitalization in 2013 were
platform-oriented companies. 37

Platform strategies, combined with the need to be more customer-centric
and to enhance products with data, are shifting many industries from a focus

on selling products to delivering services. An increasing number of
consumers no longer purchase and own physical objects, but rather pay for
the delivery of the underlying service which they access via a digital
platform. It is possible, for example, to get digital access to billions of
books via Amazon’s Kindle Store, to play almost any song in the world via

Spotify, or to join a car-sharing enterprise that provides mobility services
without the need to own the vehicle. This shift is a powerful one and allows
for more transparent, sustainable models of exchanging value in the

economy. But it also creates challenges in how we define ownership, how
we curate and engage with unlimited content, and how we interact with the
increasingly-powerful platforms that provide these services at scale.

The World Economic Forum’s work in its Digital Transformation of Industry
initiative highlights a number of other business and operating models
designed to capitalize on the fourth industrial revolution. The previously

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