Once every few years, a new business comes along and shifts the paradigm within an industry. Nowadays, it's happening more frequently than ever thanks to the innovators from Raleigh to Silicon Valley.
There's a lot to learn from these cases for private duty home care agencies. You never know when someone is going to come up with the next big thing, so you have to be ready to adapt.
Now, let's see what we can learn from these three case studies:
Kodak: Don't silence employees
The fall of Kodak is an extremely interesting arc. On the one hand, it makes total sense. When we think of Kodak, we think of film cameras, which were destined to be replaced by digital cameras anyway.
But not everyone knows that one of Kodak's employees invented the first digital camera in the 1970s. But according to Steven Sasson, the man himself, he was never taken seriously by management.
“They were convinced that no one would ever want to look at their pictures on a television set,” he said. “Print had been with us for over 100 years, no one was complaining about prints, they were very inexpensive, and so why would anyone want to look at their picture on a television set?”
Kodak's bankruptcy filing must have been a tough pill to swallow, and the fact that they invented and ignored the product that took them down would just add salt in the wound.
The lesson: listen to your employees. Their on-the-job experience is invaluable and one of them might come up with a great idea.
Blockbuster: Reevaluate your business model
If you ever rented a movie and missed its due date, then it'll come as no surprise that that's exactly how those businesses made money. According to this Forbes article, Blockbuster's revenue model was built on late fees:
"Yet Blockbuster’s model had a weakness that wasn’t clear at the time. It earned an enormous amount of money by charging its customers late fees, which had become an important part of Blockbuster’s revenue model. The ugly truth—and the company’s achilles heel—was that the company’s profits were highly dependent on penalizing its patrons."
A company's revenue model should correlate with customer satisfaction. Blockbuster's did the opposite. Even if this was once a successful strategy, Blockbuster had more than enough time and capital to come up with a new, more sustainable strategy. It didn't.
The lesson: Even if you're doing well, reevaluate your business model and make sure customers are happy with your product.
Taxi industry: Don't stop improving your product
The taxi industry is one of Silicon Valley's most recent targets. Now that Uber is ubiquitous, its best hope is to protest to city councils that their competitor's business model is unfair to workers.
But they're missing the point. Uber is winning not because of a predatory pricing model, but because its algorithm is better for matching drivers and passengers, according to this Forbes article:
"The higher hourly earnings among self-employed drivers suggest that capacity utilization, in terms of the time spent in the car with a passenger, has increased with Uber, as its platform allows for better matching between drivers and passengers. But for traditional taxi drivers the effect has been the opposite, with a decline in the amount of time they have a passenger in their vehicle."
Uber's prices are lower because they're more efficient at getting people from Point A to Point B. The taxi industry could have improved their product by doing something similar, but they didn't.
The lesson: Never stop improving your product and don't wait to adapt to a rapidly changing industry.
To talk more about ways to keep your business relevant in a changing industry, contact us today.