Business and professional literature would have us believe otherwise, frequently emphasizing the company's ability to chart its own success by innovating in a linear, upward fashion, ignorant of the market demands that only become apparent through public testing. Success and survival in business is not a ladder to "the next big thing"; a new idea or intelligent response to consumers could lie behind, to the side of, beneath, or above traditional modes of thinking. For this reason, I take skepticism toward the assertions of Sorescu et al., researchers who (as I will further explain in this week's presentation) claim to encompass business innovation in six "themes," or plans, that a business might follow for a competitive advantage (Sorescu et al.). Among these themes are "customer lock-in" (the creation of brand champions through exclusive products, as with Trader Joe's and Target) and "operational efficiency" (a streamlined customer experience, like Priceline.com's "Name your own price" tool).
But in my personal experience, I've seen where a failure to stay attentive to public testing thwarts these models. For example, I and (presumably) other college-aged students would love to receive airfare and hotel rates that are reasonably affordable under our constrained budgets. Yet I've grown accustomed to my expectations of travel expenses being thwarted by the reality at every turn. A trip to Los Angeles in June might cost hundreds of dollars more than I feel is fair given the quality of service and lodging, so the "Name your price" model of Priceline.com is ineffectual--what I expect to pay, or want to pay, is rarely in sync with options that are realistically close to, say, the E3 2014 convention center or the time of day that I need to be back by. Similarly, the creation of brand champions among your loyal consumers only works if you have unique, desirable goods that are priced competitively and can't be found elsewhere. But even competitive pricing doesn't work without attention to detail and an eye for design. In other words, don't follow the example of Sears. The pragmatic need for public testing and temporal direction emerges in these and other cases where adherence to and blind faith in a "proven" business model sinks a ship faster than frequent change and adaptation to market demands, even when it means tossing aside what's worked for decades.
Source: Sorescu, Alina, Ruud Frambach, Jagdip Singh, Arvind Rangaswamy, and Cheryl Bridges. "Innovations in Retail Business Models." Journal of Retailing 87.1: S16-S3. Web. 13 Apr. 2014.
No comments:
Post a Comment