Information Systems Integration – Tony Messina

Everything on Demand Business Model

As grow-up-with-internet millennials and generation z have more influence in the society, the way of using technology starts to change- from traditional packages selling with limited customization to everything on demand. Consumer behavior is changing. With everything on demand ideology, consumers expect to access and extract value from companies’ products and services instantly. In 2015, customers in the United States spend $57.6 billion on on-demand products and services and the spending is growing rapidly.

The original ideology behind the on-demand business is the best usage of surplus. When there is a surplus in the market along with the mature mobile technology, the surplus can be transformed into resources. The most well-known example is the existence of Uber. Before Uber, people tend to leave their cars empty when they do not need to use it. Therefore, cars depreciate even when not use it. With the help of Uber, car owners have an alternative way to generate more value with few extra fees. Meanwhile, people who used to wait for scheduled buses and trains can now demand a car whenever they need. The new business model combines with technology reshaped people’s lifestyle.

Other examples include Netflix, Airbnb, and all kinds of paid program. Companies should rethink their business strategies to attract more millennials and generation z users while retaining their traditional customers.

 

3 Responses to Everything on Demand Business Model

  • This is really interesting and I never thought about all these new businesses that way. I definitely agree that we’ve been moving toward everything-on-demand, but never made the connection between technology and surplus. It makes me think of other popular companies at this time and in what way they are using and taking advantage of surplus. I wonder what the connection is between this everything-on-demand model and the rise of subscription-based delivery companies such as Stich Fix, Blue Apron, Dollar Shave Club, etc. It seems like these businesses are using this on demand model, and taking advantage of their “surplus” product that doesn’t get consumed because users don’t have time to go shopping for it. It seems like they are capitalizing on a shortage of time as well. Very interesting!

  • I think companies like eBay, Airbnb and Uber made a smart move by starting a very intelligent business model without owning actual “asset”. By utilizing these unused “asset” in the society, all they need to do is building a network of peers to work between these “asset” holders and the customers. These companies according to Harvard Business Review are Network Orchestrators (https://hbr.org/2014/11/what-airbnb-uber-and-alibaba-have-in-common). These businesses according to the article, are those who attract investors the most and they are believed are the ones to create the most business value compared to other traditional business models.

  • It is very interesting that this simple concept has so quickly entered our lives and shaken our expectations of service. I’m a frequent user of on-demand television services and ride-sharing, and while I may not have been an early adopter, it is increasingly difficult to imagine a world without such things. These “low-end” disruptors create value from our willingness to sacrifice additional services and consistency. For example, Airbnb will provide you with a place to stay in the city you want, but without all of the bells and whistles you would likely find at a hotel. With Uber too, you have access to more options when you want them, but you cannot expect a consistent level of quality from one room or car to the next. Staying in a Marriott in Philadelphia or in San Francisco will be a similar experience, whereas Airbnb rooms could vary dramatically. And any number of taxis you ride in the same city will likely be comparable, while each Uber driver has a different car that has unique wear and tear from the drivers’ personal use.

    One thing I wonder, is whether this “sharing” of resources is leading to some form of socialism far down the road. Of course we currently pay for these services on-demand, but might the time come when a critical mass utilizes the same services and we all pay our “fair share” for equal access whenever we want? That idea is probably hyperbolic, but I do wonder what might happen if our concept of ownership erodes and we find ourselves “sharing” so much.

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