Business vs Service

    In many offline industries, a conservative approach to development can be observed. Retail, medicine, education - everywhere you can trace the historical “pillars” that were formed in the middle of the 20th century. But the basis of almost any business - the need of the target audience - although not quickly, but still changing in accordance with new opportunities that change at some point in the market.

    When Sam Walton created Wallmart, the retail market was inefficient. Overpriced prices, insufficient product range - all this led to the fact that a rather simple at first glance, “algorithmic” scheme of development of network retail actually changed the market. But this success was not caused by luck alone. One of the key factors was the use of modern technologies at that time - the first mainframes - to move to a new level of automation of goods accounting and calculation of logistics.

    Similar patterns for the emergence of businesses around technological breakthroughs can be traced in almost all industries: from incandescent lamps, radio, ICE, to the invention of the tonometer.

    The first businesses based on technological innovations primarily fulfill their task - creating sustainable demand and customer returns. The competition is weak, you can skim the cream. A recent example is electronic ink laptops, the first models of which were sold with an incredible mark-up.

    However, when competition arises in these industries - and sooner or later this happens - it becomes difficult to compete at the expense of technological advantage. There is no big difference for the client in obvious indicators - the prices are almost the same everywhere, the range of possible services is also, so how do you ensure the influx of new and retaining old customers? And at this stage, clear “business” schemes are gradually acquiring the features of a “service”, which is already based on subjective opinions about what to offer the client to enhance his “happiness”.

    Marketing, PR, branding - all these are milestones of competition, where none of the participants can offer a significantly better solution than that of a competitor. For a long time, focus groups and surveys of a potential target group were in fashion, with only one clear task - to reduce uncertainty as to where to develop the business.

    Any potential market attracts attention with future opportunities. An analysis of customer preferences is likely to be one such market. Big Data, Data Mining - these technologies can (and in some special cases, have already contributed) change the approach to the development of the sales market. Analysis of user preferences, personal loyalty programs are just some of the options for the effective use of such technologies.

    “Business”, which in many cases is simply “Service”, again becomes purely algorithmic. This phenomenon, apparently, is not good or bad, but simply a consequence of development. But new businesses that significantly change the market will be based precisely on technological breakthroughs. Just because it’s hard to come up with other things that represent opportunities for strong competitive advantages for developed businesses.

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