Battle of the FAANGS – who is winning the digital crown? | Deltabase

2020 is the year that has brought digital to the front and centre of business strategy.  With the COVID-19 pandemic those that have survived and thrived are the ones who have managed to embrace digital, adapt, and find a way to win whilst the world’s population has been locked indoors.

Our leading Digital Transformation benchmark is calibrated against the world’s digital elite and there is no surprise that this includes some of the largest technology giants on the planet that have excelled during the pandemic. An investor in the ‘FAANG’ peer-set for 2020 would have made a return of ~40%* by August having simply put a $100 dollar in each of Facebook (up 22%), Amazon (up 70%) , Apple (up 49%), Netflix (up 57%), Google (up 10%) (source: stocknews.com).

But who, out of this fantastic-five topped the pack at the beginning of this year when we assessed and scored them for the Deltabase Dx Index?

FAANG Leaderboard

It is unlikely to be a surprise to see Amazon leading the cohort overall, but they don’t lead in every factor of our assessment, with Facebook and Google snapping at their heels.  So, as in each of our Dx Intelligence briefs, lets break it down across the Deltabase 6-factor assessment framework for digital capability, and apply our comprehensive digital transformation definition (see here for more on this) and assess the strengths and weaknesses of the FAANG peer-group leader for each factor:

1 | STRATEGY – How prepared is the business to guide the Dx agenda?

“While I’m glad I did annual challenges, it’s time to do something different. This decade I’m going to take a longer term focus.“ Mark Zuckerberg, CEO Facebook

Areas of strength: Dx Approach. When Facebook announced its 10-year Digital Transformation manifesto in 2017 it showed the world how important digital transformation is and how synonymous it is with business strategy. Facebook realises the need for term reengineering of its capability and now only 3 years through, has leading Dx skills and resources in place to make it happen.

Area of weakness: Digital Ethics. Cambridge Analytica and all that has followed, say no more.

2 | BUSINESS MODEL – How adaptable are the business proposition and structures?

“No company can handle the kind of surge in demand that Amazon can. When the pandemic is really over, the physical retail competition will be weakened—and Amazon comes out of this a winner.”  Mark Mahaney, Tech Industry Analyst, RBC Capital Markets

Areas of strength: Amazon’s diversified business model has seen it predictively thrive in 2020. Its resilience is down to a portfolio of operating models and revenue streams from digital and physical product built through acquisition and rapid transformation. From a single-sided eCommerce platform to a complex digital ecosystem with global reach and expert distribution capability.

Areas of weakness: None to note for 2020.  To maintain its position the company will have to maintain the integrity of platform through respecting the privacy of its users, while continuing to monetise its data and give people the personalised experience they want, both for selling its own products, as well those through its marketplace.

3 | CUSTOMER ENGAGEMENT – How capable is the business at realising customer value?

“whether you’re buying or returning a product, the experience is effortless” Chelsea Hunerson, Qualtrics.

Areas of strength: Customer obsession is one of the four guiding principles at Amazon and it shows in superior sales and growth.  Masters of behavioural Targeting where it can market to users based on their online actions and behaviour – their single view of the customer is second to none and it allows them to automatically deliver content that’s unique to their customers.

Areas of weakness: None to note for 2020. To maintain their leadership position, Amazon need to continue to invest in customer engagement technology and maintaining the customer experience for which they have become synonymous.

4 | DATA – How proficient is the business at using data?

“Rich user data is Facebook’s most prized possession, and the company sure isn’t throwing it in for free,” Michal Kosinski, Stanford University

Areas of strength: The data Facebook holds and utilises on its customers is deep, proprietary and unique. As it writes its own rulebook at times and has overstepped the boundary on occasion this doesn’t detract that with x% of employees in the business with data skills Facebooks is a data giant as well as a tech giant. Expect this to grow even further in 2021 as it pushes into mainstream VR with the Oculus Quest 2 linking your Facebook account to your VR activities.

Areas of weakness: Data protection – 267m phone numbers, 400m records, Instagram passwords have all been leaked and lost. Not to mention favoured partner access.

5 | TECHNOLOGY – How effective is the business at utilising technology

“In 20 years it is a leader in consumer hardware experiences powered by its software and artificial intelligence expertise.” Fastcompany

Areas of strength: Tech Innovation has been the primary driver of Google’s success along with the financial resources to reinvent itself at pace. With its proprietary page rank technology and hypertext matching analysis Google has the best search engine on the planet. Not to mention its high efficiency back-end tech and deep AI expertise.

Areas of weakness: Cyber security and data protection, Digital workplace.

6 | PEOPLE & CULTURE – How ready is the business to embrace innovation?

“Amazon’s culture has set new standards by cultivating a workplace prime for agility and innovation,” Mary K Pratt, TechTarget

Areas of strength: Inextricably bonded its business model, there should be no surprise that a company as successful as Amazon has the people and culture to have made it happen. Its famous geodesic spheres at its Seattle workplace campus embodies the company’s commitment to transparency and its smart, passionate, and high performing workforce use technology to their advantage.

Areas of weakness:  Organisational Capabilities and Culture of innovation.

In Conclusion

So, you might have guessed Amazon is the most digitally capable of the FAANG group.  It’s share price was up 70% so far to August 2020 and represents to many company leaders a shining example to emulate. There isn’t a single company out of this group that has managed to thrive so much during such a crisis.  Will it be there next year? – we will see.

Like all businesses of its scale there is room to improve but it is also not every day you hear a chief executive telling shareholders not to expect profits because it is looking after its staff and its customers during the pandemic. Let’s hope Jeff Bezos continues to keep Amazon grounded as it has been this ability to strive for better that has seen Amazon’s star rise so quickly to the global top.

Who else can challenge them?  If you can you think of a more worthy candidate for 2020 let us know and we will benchmark the best suggestions for free.  Or, if you just want to know more about our Dx Intelligence benchmark reports, then get in touch using the link below.