Winning Business Models for the Now Economy [3]

[It ain’t that hard to be different.  Tom Peters] A successful business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive edge by demonstrating that the firm does something different, more innovative, and better than its rivals. Realize that different isn’t always better, but better is always different. Sirius XM Satellite Radio is always on whether you are at home, at work, in your car, or at the beach. Many customers listen to SiriusXM eight to twelve hours a day! Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power. Newspapers have struggled to become information providers as their readers aged and defected to new media. Sound business models answer the following 3 questions: 1) where should we compete?; 2) how should we compete?; and 3) how can we monetize products, services, experiences, and ideas. According to Accenture, 80% of companies hope to grow by developing new business models by 2019.Consider these 20 business models as you evaluate or develop your business strategy.

Digital Business Models

1. Access: Customer usage not ownership (Spotify, Zipcar) 2. Bricks-and-clicks: Retail and e-tail (Best Buy, Target) 3. Bundling: Sell 2 or more products for a discount (Comcast, Microsoft Office) 4. Community of users: Users generate knowledge, solve problems (eBay, Wikipedia) 5. Crowdsourcing: Outsource to non-employees for solutions (My Starbucks Idea, Doritos Super Bowl Contest) 6. Experience: App-based service plans (ClassPass, Zeel Massage) 7. Free: No cost products/services, revenues generated elsewhere (Skype, YouTube) 8. Freemium: Basic service at no charge, enhanced services have fees (LinkedIn, MailChimp) 9. Long tail: Millions of products offered, most sell very few (Amazon, Netflix) 10. Marketspace: Digital marketplace of buyers and sellers (Alibaba, eBay) 11. Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (USA Today, Visa) 12. On-demand: Services as needed (TaskRabbit, Uber) 13. Open business model: Companies share low cost options [way below branded] Linux, Qualcomm) 14. Pay for value: Customers opt to pay what they wish (Neighborhood café, Radiohead CDs) 15. Platform participant: Enhance platforms by creating user applications (Foursquare, Zynga) 16. Pure-play: Online presence (Blue Nile, Overstock.com) 17. Shaper: Open up new marketspace (Apple, Facebook) 18. Software as a service (SaaS): Deliver applications over the internet (Salesforce.com, ADP) 19. Subscription: Recurring fees for services purchased on a regular basis (Dollar Shave Club, SiriusXM) 20. Unbundling: Sell a single product from a set of related products (AT & T DSL, Windows Live Essentials) Think about the 7 questions below as your management team assesses your business model and market performance. 1.  Can you clearly explain your business model? 2.  What is unique about your strategy? 3.   How does it compare with your direct and indirect competitors? 4.   Have you broken any industry rules lately? 5.   Can you develop a more innovative and interesting business model? 6.   Will your business model win in the market? 7.  Does your organization truly deliver superior value for customers in the Now Economy? __________________________________________________________________________________________ This blog post is the 3rd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com, www.artweinstein.com/, 954-309-0901 .