A new story is beginning to take shape in the marketplace. To quote Tom Goodwin, senior vice president of strategy from Havas Media, in his article for TechCrunch,[1] “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” Those examples are thought-provoking to consider.
But these players are not alone in reinventing market strategy in this new digital world. In his book, The Digital Transformation Playbook, David Rogers, from Columbia Business School[2] defined this strategy as the “Rise of the Platform.” It was a 2MM shift away from thinking about your company’s offerings as a product, and instead, thinking of it as a platform from which partners, consumers, and vendors could exchange products and services. In that way, businesses don’t have to create all of the value, all by themselves. Brilliant. Simple.
But this innovation isn’t only for those companies born in the internet era. Consider one of the most recent companies moving in this direction – General Motors. GM decided to put an e-commerce marketplace in the dashboards of newer model cars being sold.[3] What’s their bet? Simply that GM can profit as drivers order food, find Fuel or reserve hotel rooms by tapping icons on the dashboard screen, in lieu of smartphones. Of course, the proof will be in the execution, but that small shift in thinking might just Fuel the next generation of smart vehicles. Did Tesla miss that? The whole notion of rethinking your strategy so that you don’t have to create all of the value as a single business entity, is a powerful one.
We’ve already seen these changes stretching across many fronts, from retailers like eBay and Amazon Marketplace, to finance platforms such as PayPal and Kickstarter; to the mobile market platforms with Google Play, iTunes, iOS and Android; to home appliances like Phillips, Nest, and even Samsung refrigerators.
Adding to these new platform strategies are some other remarkable shifts in business. These range from the use of big data in ways you wouldn’t expect, to disrupters that are challenging everything from college bars to charitable giving.
Take some novel uses of big data. Did you ever wonder what The Weather Company (TWC) does with all its data besides providing all of the programming content for viewers of The Weather Channel? It might surprise you to find out that the data is being used for a wide range of clients, from insurance companies who want to alert their insured car owners to move their cars under cover because of an approaching hail storm; to predictive data used by the large retailers like Walmart on store sales.
But rethinking how to use data helps other businesses as well. Some large casinos who want to entice their high-rollers to return more often, or stay longer, study everything from the wines being ordered to the high-roller’s dining preferences. And if you happen to be one of these high-rollers, then you might certainly expect to see your favorite bottle of wine in your room when you arrive, as well as coupons to your favorite dining spots when you weren’t having such a great night on the floor. Why? The casino doesn’t want you to associate their facilities with ‘bad luck” and face your possibly moving on to try another casino where you might have better luck. Does it work? David Rogers[4] says that average stays during the year moved up steadily, as proof that taking care of your best customers pays off. You can imagine the revenue that accompanies that trend.
There is more than data, customers, and innovation at work in this new digital era. But the important point is that you don’t have to create the next Artificial Intelligence engine, or body sensors that collaborate on the Internet of Things. It’s really about rethinking your business strategy. If you’re a nonprofit who’s losing headway to the GoFundMe’s, the Kiva’s and 1,000’s of other giving sites that put people closer to the question, “Where is my money going?” the news is that you probably have the data to hone your messaging more precisely to reflect the range of incomes and emotional connection to your cause.
Disruptive technology sometimes comes out of left field, so if you’re thinking you’re immune, take a look at what’s happening to college bars.[5] These bars always made their money selling drinks, but that wasn’t necessarily why college students showed up. The bar’s real value came from serendipitous encounters and socializing. But social platforms, mobile messaging, online food and drink delivery services and similar technologies and platforms make the college bar scene less important. Many bars are now struggling, and some that have operated for decades are closing down, now that their typical patron might stop by only for a “last call.” Clearly, that single drink won’t keep them in business much longer.
This new digital era is not one to be feared, however. It offers a cornucopia of possibilities, as well as a chance to rethink your strategy as a business. We don’t have to invent these new technologies to gain market advantage. In many cases, they are ready-made for us to take advantage of in the new digital world.
And from the seller side, imagine if you had the knowledge of how businesses have to shift to remain viable in the new digital era. Armed with that knowledge, consider the value proposition you might just be able to present to one of your customers. Do you think installing e-commerce engines in the dashboards of new cars is the only new value proposition in this new digital world?
Author: Joe DiDonato
As Chief of Staff for BCI, my role is to help our customers and internal teams achieve world-class performance. We believe that world-class performance never happens by accident. We also believe it’s achievable for everyone. So what we do is help sales teams like AWS, VMware, T-Mobile and companies like yours become world-class performers. We just happen to provide award-winning coaching and training.
[1] Tom Goodwin, senior vice president of strategy and from Havas Media, TechCrunch The Battle is For The Customer Interface, October 18, 2014.
[2] David Rogers, Faculty Director of Columbia Business School’s Executive Education Programs, The Digital Transformation Playbook, Columbia Business School Publishing.
[3] Reuters, GM puts an e-commerce marketplace in the dashboard, https://www.reuters.com/article/us-gm-tech/gm-puts-an-e-commerce-marketplace-in-the-dashboard-idUSKBN1DZ0DX,
[4] David Rogers, Faculty Director of Columbia Business School’s Executive Education Programs, The Digital Transformation Playbook, Columbia Business School Publishing.
[5] Ibid
