Digital Strategies in a Global Market

The Fourth Industrial Revolution is characterized by the speed, scale, and changing role of machines and technologies in various aspects of business, exposing threats to existing companies, forcing modernization of business models and firms’ strategies and structures. The authors of the book made an attempt to investigate through different lenses the factors and dynamic process of digital strategy elaboration and implementation by international companies of different industries or sectors or country point of view in the framework of the Fourth Industrial Revolution. Part of contributions revisit from a theoretical and/or empirical standpoint, the main theories in the field, taking into consideration macro aspects connected with the Fourth Industrial Revolution and crucial digital technologies implementation, ranging from new concept of marketing in digital era and institutional aspects of digital transformation to the concrete tools of machine learning and digital transformation of the corporate governance. The second part of the volume focuses on the firms of concrete sectors or industries and is dedicated to a number of empirical studies on digital strategies implementation in real activities of the companies from different industries and on different markets.

The article analyzes the possible directions for implementing digital tools and strategies in marketing, which is becoming a condition for competitive companies in global markets. Since, as a global process, digitalization covers all markets, the purpose of the paper was to analyze the changes that have been taking place with marketing tools and strategies, using the example of companies operating in Russian markets. The author conducted a study, based on the methods of interviews with top company managers, of the directions and problems facing the implementation of digital tools and strategies. The results of the survey show the potential practical directions of using digital strategies, as well as the emerging risks that come from being resistant to change. The analysis revealed problems, but allows us to make recommendations for new research into the necessary managerial competencies for effectively implementing digital strategies.

EU digital policy is already the subject of a significant number of works in academic literature. Most focus upon the various domestic aspects of a single digital market, including technical and legal facets. The external dimension of the EU digital policy’s is actively discussed in the field of international law, primarily its effects on copyright; this predominantly concerns the cross-border movement of content (films, e-books, etc.), as well as with the accessibility of databases for users from different countries. However, a more appropriate way to view the global impact of the EU’s digital policy and therefore its capacity to shape the fourth industrial revolution worldwide, is through economic lenses. The objective of this chapter is to find out whether the EU digital policy is a tool of global governance. If the answer is yes, this tool has to be characterized, namely: the range of external goals that European officials and policymakers set in the field of digital politics have to be determined, and these claims have to be compared with the EU member states profiles in the international trade in digital services. A critical overview of key official documents and policy papers of 2015–2020 showed that if the EU’s digital policy initially endeavoured to remove internal barriers for the free circulation of goods and services, today it aims to shape the global digital environment. Currently the EU accounts for a quarter of the global export of ICT services (excluding intra EU trade), which, on the one hand, provides favourable starting points for EU to become the global regulator, but on the other hand does not give it indisputable advantages and portends a difficult negotiation process with other players, primarily Asian countries.

 This paper evaluates different approaches to embeddedness of the Fourth Industrial Revolution in national economics and on global market. The numerous and varied attempts to achieve success amidst this turbulent and constantly changing global market has created two main paradigms of institutional policy, correlating with the countries that initiated and/or achieved the embedding of the Fourth Industrial Revolution. The state, as the initiator, pursues a top-down policy: imposing formal institutions and stimulating business in every way possible to modernize its activities in accordance with the principles of the Fourth Industrial Revolution. If the idea of the Fourth industrial revolution was instead initiated by business, then a down-top policy is implemented: the state turns out to be a weak actor which adapts to changing conditions and is modernized through digitalization. Top-down policy is implemented mainly in Natural States; down-top policy (sometimes known as bottom-up policy) is mainly a characteristic of Open Access Order countries. Since the Fourth Industrial Revolution is associated with high level of technology (such as the development of the Internet of Things), the leading role in the global market is played by industrialized and post-industrial countries, as they are creating an institutional image of the new global market. Thus, the Open Access Order has the greatest impact on the development of the global market. The main goal of this research is to define the paths of institutional policy amidst the Fourth Industrial Revolution, whether in Natural States or in Open Access Order, through applying the methodology of Douglass North. Its impact on the global market can also be ascertained. Institutional and comparative analysis methodology was used in the research. The results indicate that (1) Natural States pursue a top-down policy to embed the institutions of the Fourth Industrial Revolution, (2) Open Access Order goes radically other way by employing a down-top path, and (3) digitalization occurs according to the chosen institutional policy. These findings not only make it possible to adjust the Fourth Industrial Revolution, but also to modify the institutions already in force. The experiences of those Fourth Industrial Revolution initiatives that have already been implemented in selected national economies avoids institutional traps, and allows those countries that have embarked on a different path to succeed.

Many economists argue that industrial activity should be grouped geographically, and cluster activity affects economic indicators. Further to this, it is relevant to ask whether, in practice, the geographical proximity of research group members always contributes to innovation activity. Many research papers have shown that when teams work face-to-face, the new technologies they create are more likely to be successfully commercialized. It is also believed that, in the value chain of a given technology product, geographically close teams generate valuable innovation, while geographically dispersed teams successfully implement workflows that do not require high intellectual labour. The purpose of the study is to determine the nature of networking among business models in the fourth industrial revolution. The main objectives of the study are to identify the relationship between the innovation system of transnational corporations and the cluster system of production organization, and to establish a single conceptual apparatus for the definition of “technological cluster”. Network forms of the organization of manufacture, it is concluded, replace traditional linear-functional and divisional forms, and the cluster loses regional borders and becomes international.

Global Value Chains (hereinafter referred to as GVC) are a crucial component of the modern economy, as it continues the process of globalization. Almost all countries—whether a developed or developing state—participate in a GVC, regardless of their stage of development. At present, relations in the international trade system are being transformed, and GVCs play a key role in this new world economy; approaches to new product developments, and the structure of supply chain management processes, are being redefined. In particular, global players are becoming more interested in value chains and, in this sphere, in transforming the structure of international trade, and the possibility of integrating an increasing number of companies at both the industrial and country levels. Due to this interest, methods for studying GVCs are being developed, factual material is being accumulated, and a methodological base is being formed and refined. At present, the effect of chains at the level of individual industries, and the impact national and regional conventions and innovations have on them, are being studied; furthermore, a mechanism for implementing strategic changes in those companies that both participate and make innovative decisions as a result of participation in GVCs is being developed. Leading international organizations, such as UNCTAD, OECD, WMF and the World Bank, show serious interest in such a study. Both the general consequences of including individual countries in into the GVC, and the specific new conditions for digitalization, are necessary predictions to be made. Thus, building and evaluating how the GVC functions requires a solid methodology. This article analyzes the essence and main trends in the development of GVCs, including interaction with the tools of “Industry 4.0,” and also examines the features and possibilities of Russia’s involvement in the GVC of Russia. Further possibilities of research (theoretically, empirically and methodologically) into GVCs, and the existing problems and limitations, are also discussed.

The chapter explores the major stages of the emergence of sourcing in the Russian economy, as well as its periodization, detailing some relevant features of each period. The authors note 4 periods—stabilization, activization, uncertainty and future development—with each period having its own timeframe. The analysis is done through the lenses of the sourcing methodology, as developed by the authors. The methodology is based on four forces—transaction costs, competitive advantage, trust, and institutional voids. These forces, in turn, influence the sourcing cycle in an individual firm or industry, or the economy in general. The chapter deals with the peculiarities of sourcing strategies at different stages of the Russian economy evolution, including the period of initial privatization followed by strengthening of the state ownership, which was manifestations in the “curse of outsourcing,” the emergence of large companies—”national champions” and the construction of vertically integrated structures. It in turn led to the reverse sourcing strategies along the sourcing cycle (from outsourcing to insourcing) within large companies but at the same time stimulated the development of outsourcing at the level of small and medium-sized enterprises (SME). The authors conclude that digitalization and robotization will lead to obsolescence of the whole direction of outsourcing services (primarily related to a large share of personnel costs in the cost price), but in general will not significantly affect the dynamics of sourcing, will make it more transparent and trustworthy, and will positively change the technological continuity of processes, especially in electric power engineering. Recommendations are made to eliminate “institutional voids” in the Russian economy based on reducing the role of the state in the economy and deregulation in certain industry markets.

This article presents the author’s approach to opportunities and prospects facing the development of operations management and production design, studied through the context of the economy’s digital transformation. It is determined that digital economic entities should prioritize fulfilling market expectations; while there are numerous justifications for this in theory, in practice, it is impossible without using the principles of advance in production. In modern conditions, advanced operations management does not change the basic principles (profitability, synergy, continuity, the legitimacy of alternatives, learning ability, the susceptibility of production to advancing, adaptability, flexibility, mobility, potential adequacy, innovative support, guaranteed work execution, continuous improvement), but is complemented by significant provisions for introducing modern approaches accompanying the digital transformation of the industry. Possibilities for adapting modern organizational tools—taking into account digital technologies and the automation of management systems (including the Internet of Things)—have been created in order to increase the efficiency of these organizational processes and to implement advanced models in the preparation of forming new productions.

The primary objective of this article is to study the increasing role played by information and communication technology and digital strategies, as part of a company’s business strategy, in the activities of its board of directors. In the era of the Fourth Industrial Revolution the transformation of business models and sectors of the economy creates new opportunities and risks; however, such transformations are essential to determine the new logic providing the foundations for business strategies. Information and communication technology is a subject that covers a wide range of issues, requires the systematic participation of various stakeholders, and lays the framework for mechanisms to create values and manage emerging risks. Given that the application of an economy’s digital transformation is an important element in the development and implementation of a company’s business strategy, it is crucial that its governance is within the scope of the company’s corporate governance as one of the key tasks of a board of directors. However, the current practice shows that corporate governance pays insufficient attention to this issue. The paper notes that the ability to revise business in a digital form is largely determined by a clear digital strategy, which ensures that technologies are implemented in a way which meets the company’s business goals. In addition, there are currently plans to draw closer to the ICT strategy and the company’s business strategy in order to implement a unified digital business strategy. In conclusion, recommendations are made to organizations regarding the use of information and communication technology and digital strategies, as well as the statement that they significantly expand the management capabilities of organizations, and the role of a board of directors as a strategic governance body will continue to strengthen.

The article aims to show the ways in which data mining and machine learning methods enhance the effectiveness of digital marketing strategies. The author describes the capabilities of business analytics, such as data and application integration solutions, which transform data and information into knowledge, as well as more versatile data analysis tools. The author also specifies the distinguishing features of the term Big Data Technologies. Clarifying this, the work carries out a benchmark study of the digital mining methods used in business solutions and marketing strategies. This describes the general practice of digital marketing information processing, and gives particular consideration to predictive analytics and forecasting components. The paper pinpoints examples of effective predictive analytics and machine learning solutions in the IT sector, as well as tendencies for developing market strategies in the digital economy. The author focuses on machine learning algorithms (regression, classification, clustering, decision trees, neural networks) and the specificities of their implementation, as well as the benefits of machine learning in marketing strategies. The paper analyses the main stages of the evolution of digital technology in marketing strategies, and suggests practical guidelines for companies on the use of these technologies.

This article discusses digital conglomerates, and the characteristics of their activities and strategies. A systematic approach was the primary method for studying this problem, and thus such diverse elements as digital technologies and conglomerate development strategies—which were previously studied separately—were comprehensively synthesized. The article purports that, at the present time, undergoing a digital transformation is key factor for a leading business’ continued success. The authors prove that conglomerates, in their current form of integrated business organization in global markets, have not yet been overtaken; however, the current phase of the digital revolution has created the prerequisite conditions under which digital leaders can transform into global digital conglomerates which, using the interconnected nature of network operations and platform features, manage to increase the efficiency of their operations. Moreover, even with a smaller volume of tangible assets, they have ensured their rapid internationalization and achieved leadership in many sectors of the emerging economies. The article holds practical value for investors and Russian companies developing their digital strategies.

This article justifies the need to review the main managerial approaches by international oil and gas companies, and to search for new ways of making managerial decisions amidst this dynamic and volatile market. The key factor for success in today’s environment is digital transformation. In this regard, this article discusses the impact digitalization has upon the planning, organization, coordination, management, and control processes of the main managerial functions of oil and gas companies; furthermore it identifies the benefits of using digital technology in management activities. A systematic approach was chosen as the main approach to this study; thanks to this, diverse elements which were previously studied separately, such as digital technologies, oil and gas companies and management, were comprehensively synthesized. The article proves that, despite the debatable nature of the problem, digitalization as a whole has a positive impact on the management of oil and gas companies, increasing their effectiveness. Thus, this article is of practical value for oil and gas companies in terms of improving their planning, coordination, and control systems. The results of the article can be acknowledged by oil and gas companies when building up strategies for their further development.

The development of e-commerce—as a relatively new type of entrepreneurial activity, and in other ways—objectively requires the development of an approach to determining cost-effectiveness. When organizing sales in new markets, the most significant consideration is the charges companies levy for advertising and marketing. When entering the foreign markets, however, the seller’s tasks become more complicated, as it is necessary to take into account the influence of new factors and circumstances which are often unfamiliar to the exporter. This is why marketing staff are developing methods for evaluating these costs. To date, several approaches have been developed to evaluate the cost-effectiveness of advertising and marketing. One of the most used methods is calculating the Return on Investment (ROI), i.e. the income from incurred expenses. However, this method is not always suitable, as it evaluates the return on short-term financial investments, and not those costs that become extended over a long period. As such, other methods should be considered—in particular, those based on accounting—for finding those customers that regularly make purchases from a particular seller. The authors aim to justify this approach and prove its feasibility.

Based on a complex approach to an analysis of the socio-economic system, the article explores the impact of digital platforms on the development of new strategies in the agribusiness sector. The article sets out to reveal new general tendencies for developing new digital platforms in the era of the Fourth Industrial Revolution, as well as for the way the agribusiness sector is adapting to the requirements of the digital economy. The authors point out that global agribusiness is responsive to the opportunities and challenges that appear at every step of scientific and technological growth, and thus is constantly adjusting to new tendencies. Consequently, one competitive tool an agricultural company can use in the digital era is setting up its own digital platforms. Building up platform-based models results in the organizational structure of the company that is designing brand-new strategies being transformed, through its forming of global value chains by means of end-to-end digital technologies. Globally, using such platforms spurs monopolization of the agricultural market, which then requires new methods of regulation. The process of adapting to a platform-based economy depends on a number of aspects: geographical location and profile, organizational structure, propensity to innovation, the market environment, and government regulation factors. The article draws attention to the ambiguous influence digital platforms have on agricultural business; for example, when a high-technology companies’ performance improves, this is accompanied by a digital divide.

Digitalization currently exerts a considerable impact on competitiveness within the market. Digital transformation happens within a company after three basic stages: operational processes, customer experience, and business models. The article considers the digital transformation of business models particularly within the retail sector, using a comparative analysis of platforms (ecosystems) and traditional business models. On the one hand, digital platforms provide favourable opportunities; on the other hand, they challenge market monopolization. Digital platforms have generated new types of businesses; as an example, platform-based companies have empowered new value chain sources and a competitive environment. The article establishes the definitions and characteristics of business platform models, and points out the advantages and challenges with which the retail market is faced, as well as the benefits that ecosystem participants enjoy. The author emphasizes the significance of ecosystems that allow value to increase without the owner’s participation. Ecosystems are time and labour saving, thus offer endless opportunities. In conclusion, the author points out that digital technologies and virtual companies transform conventional retail businesses, driving up the popularity of omnichannel business models. Furthermore, introducing business platforms requires considerable changes in management, otherwise this can be undermined.

This chapter reviews how hospitality companies use modern digital tools, and how this is the most important vehicle for the implementation of their empirical marketing strategies in the context of the beginning of the fourth industrial revolution. Providing a unique customer experience is vital to the success of contemporary hotel chains. The introduction of state-of-the-art digital tools into companies’ marketing activities enables them to provide their customers with the fullest and most positive interactive experience at their hotels. In a digital space, communications include a corporate website, a mobile application, social media, email campaigns, and further online tools. A comprehensive mode, using various digital tools, forms the basis for efficient customer interaction; it is important, too, that customers find utilising such corporate digital resources convenient. The purpose of this study is to evaluate current experiences global hotel chains have had implementing digital tools. Having used digital tools to conduct a system analysis, the paper describes the results, identifies the key digital channels being used to interact with the consumer, and determines both the existing extent of integration among these various channels and the possibility of creating an integrated cross-channel infrastructure. The paper also discusses the extent to which personalisation can be offered, and suggests the development of a personalised customer path, which can provide the grounds to generate a unique and positive digital experience for each customer.

The article analyzes the transformation of marketing strategies as conducted by Western companies working in the Chinese cosmetic market. Such companies are influenced by digital trends in the economy, and largely aim their campaigns at the millennial generation, which is the predominant demographic of their target audience, and requires digitalization in both the tools and methods of communication and distribution. The main aim the article is to analyze the current trends and key factors in this marketing transformation, as they are being implemented by Western companies in the Chinese cosmetic market, driven by the digitalization of the economy. The article’s arguments are based on research establishing the fundamental principles of marketing theory, as far as it works within the modern system of economic, cultural and sociological knowledge, and statistics. Such principles define the bases for scientific theories, structure, and the methods of applying various analytical tools in the field of marketing. Finally, the article proves that digitalization is the most foundational concept for the successful development of business in Chinese cosmetics companies, as it provides the only opportunity for Western companies to meet the rapidly changing conditions of the digital economy, as well as the modern needs and preferences of Chinese millennials. Digital strategies in the cosmetic market in China are a key driver of marketing, as they provide the flexibility needed to respond to ongoing changes and market needs.

The purpose of this work is to define the impact management by values has on digital business transformation processes, and thereafter to determine what digital or conventional technologies are applicable for enhancing corporate values. Through interviewing employees and managers of Russian entities, as well as analyzing cases of advanced institutions, it is clear that the majority of Russian companies are aware of the need for management by values, yet are not using it to the full extent, thus hindering digital transformation. The study therefore proves that, as digital transformation progresses and management by values makes digital transformation more efficient, it is sensible to apply various digital technologies in management by values.

Currently at the very beginning of the Fourth Industrial Revolution, many of its trends are difficult to imagine. The technologies of the Fourth Industrial Revolution affect firms of different sectors and economies to various degrees. The radical and dynamic changes in the global economic landscape generated by the Fourth Industrial Revolution set the questions for further research dealing with major international companies. There is a need for interdisciplinary research of different conceptual views at the intersection of management, marketing, international business, macroeconomics, and sociology. An important issue for possible future research is a new understanding of the role of the state. Studying and understanding the new types of firms and new business models generated by the digital revolution is of considerable interest. The Fourth Industrial Revolution leads to redistribution and overflow of wealth from traditional TNCs of developed countries to their competitors. It is necessary to analyze the difficulties faced by the largest TNCs in conducting digital marketing and management transformation. Modern technologies of the Fourth Industrial Revolution determine the network nature of modern firms and the modular nature of goods, services, and processes. An important research topic is the impact of digitalization on competitiveness and competition in the global market