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razor-and-blade model
And they made up for any losses by capturing high margins on the replenishable module, in effect subsidizing the durable component.
Since customers could buy the durable components so cheaply, the model seemed to benefit consumers and manufacturers alike.
K...
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But the razor-and-blade model comes with a catch:
go to such great lengths
Impression Products
Lexmark
In 2017, after four years of litigation, the Supreme Court ruled seven to one in favor of Impression Products.
As the Court’s decision stated, Lexmark had exhausted its patent rights when it sold its printers and ink cartridges, and it could not impose any usage restrictions on consumers or third-party suppliers.
Power to the people!
Can you afford to hold the floodgates closed by force, against your customers’ will?
as per the customer’s wishes.
Taking this to the extreme, incumbents in any industry could decide to allow customers to pick and choose any subset of the activities that it delivers in a customer value chain.
Quite obviously, decoupling yourself does not always make sense.
To preemptively decouple in a way that rewards both customers and the company, and that is hence sustainable, you might have to change your business model.
These disruptors could provide highly valuable services and not charge for them as incumbents did because they operated under different business models that relied upon a combination of other revenue sources, lower pricing levels, and lower marginal costs.
slotting fees)
If a price policy shift in response to a new entrant translates into lower income, as it almost always does, incumbents must find other revenue sources.
“store-within-a-store” concept
over-the-top (OTT)
Telefonica.
At first, Telefonica and other telecom operators around the world tried recoupling.
Most European governments declined to pass such laws, realizing that OTTs benefited consumers.
Coming to grips with the reality that neither the new customer behavior nor the OTT’s would disappear anytime soon, Telefonica shifted its strategy to rebalancing.
Recoupling differs fundamentally from decoupling
yourself in that it causes your company to go against
prevailing customer...
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pull off
pull something off ‹informal› succeed in achieving or winning something difficult • he pulled off a brilliant first round win.
If decoupling poses an imminent threat to your business, don’t turn to recoupling as a permanent solution. Instead, devise both a short-term recoupling plan and a plan for preemptive decoupling.
If decoupling doesn’t pose an imminent threat to your business, you’re in a somewhat different situation. Rather than trying to buy more time, you can play offense, anticipating how your market will change and modifying your offerings before a challenger appears to fill the void.
Only if you can’t create a new business model that is profitable should you resort to recoupling.
The framework I’ve suggested is ultimately a filtering guide, designed to help you eliminate the least probable solution.
Which solution you go with hinges on various contingencies, such as costs, legal and technological environments, leakage opportunity, and, most important, your willingness to go along with customer desires (decoupling) or against them (recoupling).
decoupling is a wave of
business model innovation. By their very nature, these waves are pervasive, drawing in many new players from inside and outside the industry.
Don’t focus just on the particular startup or tech disruptor that is coming after you. Broaden your perspective, observe the entire incoming wave, and respond to that.
First, what is the risk that, by doing nothing, you will be decoupled anytime soon? Second, if a new entrant tries to decouple your business, what’s at stake?
either gasoline-powered or electric,
Younger consumers who lived in heavily populated, traffic-clogged cities regarded cars as burdens rather than symbols of freedom. In their minds, transportation was increasingly not a product requiring a huge up-front investment but a service available on demand using mobile apps.
car-as-a-service companies,
What risk did the rise of transportation as a service pose, and how should GM respond?
The average private car in the United States was used fifty-six minutes per day, or less than 4 percent of a twenty-four-hour period.
66 to 76 percent of the time,
32 to 48 percent of the time.
In many industries with expensive assets, companies compete by optimizing utilization rates.
In light of these numbers, it seems that business models in the automobile industry based on consumers’ individual ownership of automobiles—the dominant model for the past 115 years—are the worst possible models of all, as judged on an asset utilization basis.
Car-sharing or ride-hailing services challenge that inefficiency head-on.
lidar, or light radar,
The U.S. Transport Research Board estimated that each car-sharing vehicle took fifteen private cars off the road.
