Strategic Transformations in a Disruptive Digital Environment

Digital technologies have created new markets and disrupted many others. As a consequence, many firms are operating in a highly turbulent and transformative business environment where senior executives are often drawn into the hype that new digital technologies create (North and Oliver, 2014). This in turn can lead to a change in firm strategy and business model at a time when dynamic and unpredictable market conditions increase the risks associated with getting the big strategic decisions wrong. This paper illustrates how two media firms, Sky Plc and Pearson Plc, adapted, reconfigured and transformed their businesses to meet the demands of an operating environment characterized by inexorable changes in digital technologies. It examines their over-arching vision, corporate strategies and financial performance over two business cycles and concludes that business leaders should not dispense with the basic principles of good strategic business unit portfolio management in their attempts to take advantage of market opportunities. The results of these strategic transformations are in stark contrast to each other and leads to the conclusion that CEOs and their executive teams should create a ‘portfolio business' that can withstand the turbulence created by the digital environment and not ‘bet the company' at a time when market dynamics are so uncertain