The $2 Trillion Apple And Creating Business Models That Capture MOST Value

The $2 Trillion Apple And Creating Business Models That Capture MOST Value

Apple has captured a lot of values in markets to become a near-$2 trillion company. You need to capture value for your enterprise even as you create value for customers. IT improves productivity but sometimes the web not only improves efficiency in the utilization of factors of production but also helps to transfer or destroy value. So, there is the risk that you could be doing great things for your customers but the value created, you are not capturing. If you allow that redesign, your enterprise can collapse.

In this video, I challenge us to use the One Oasis Strategy and Double Play Strategy to build business models that will ensure that we capture enterprise value even as we create for customers. Skype creates great value for customers but it has struggled to capture most value; so, Skype remains a sojourner, constantly being passed around by buyers and sellers. Do not be like Skype.

Play at both edges of the smiling curve and leave the center.  Apple plays at both edges of the smiling curves while partners pick the center. In the financial services domain in Nigeria, companies like Interswitch (which controls Verve) and Flutterwave play at the edges while most banks are still wasting efforts at the center. The banks do the hard work but the fintechs capture the highest value. Do not be like some banks, still tethered at the center, move to the edges.

 

Share this post

One thought on “The $2 Trillion Apple And Creating Business Models That Capture MOST Value

  1. Two determinant factors, if you must capture the high value at the edges. First is knowing how to play, and the second is having support systems that allow you to play at the edges. Both factors must align, else you will be out of luck quickly.

    If Amazon took off in Nigeria, it would collapsed and gone into extinction, because the kind of logistics system, which allowed it to play at the edges were non existent here, so in trying to build logistics and decent internet connectivity, it might have gone into hibernation, without making it to IPO.

    Netflix is also another good example, think about how miserable its business model would have been, if its streaming platform took off in Nigeria, where it needed to contend with poor internet connectivity plus metered access. But having those systems already taken care of in its home market, it allowed it to go straight for the kill.

    For Apple, it knows where to play in the hardware market, while building a castle in its services business. The former was possible because there are great companies that could deliver high quality chips it needed, else nothing much would have happened.

    So, even when you are hungry to play at the edges, the privilege of support systems is key to success.

    Reply

Post Comment