Business Model Innovation and Context
One of the lessons drawn from this week’s lessons is that ecommerce businesses need to think about how they can create a profit-making model from their customers.
Context, therefore, becomes fundamental in how these businesses find a way to appeal to their customers and make them loyal.
Netflix exploited knowledge about DVD subscriptions and found a new way to deliver content through the on-demand-video streaming approach. That was despite the fact that Netflix had delivered more than a billion DVDs and the model was successful.
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Examining context requires thinking about what customers want and what they need, and developing a business strategy that aligns with these needs. This explains why some firms use catalogue, others sell directly from the site and why firms like Amazon are coming up with grab and go strategies.
Given, Amazon has had a successful business plan that has made it an ecommerce behemoth. However, the company understands the importance of brick n mortar, especially when it comes to giving customers a sense of touch.
Another example of context is business model innovation can be seen in the music industry. The resurgence of vinyl has opened an opportunity for new firms to specialize in selling the records and turntables online as opposed to offering streaming services.
The idea is that businesses can exploit information and context when building products and selecting business model.
