As startups gain control of new markets. They expand in adjacent areas in disparate and different industries by coupling the new activities to benefits customers. Thus, even though the adjunct activities might see far from the core business model, they are tied to the way customers experience the whole business model.
Amazon Prime Case Study
Example of how Amazon expanded in an adjacent area, like media and content with Amazon Prime. At first sight that might seem completely unrelated to the Amazon business model.
Amazon Prime offers premium content available on its streaming platform. And yet, it also bundles up free delivery, which makes the repeat purchases on Amazon e-commerce much more convenient. Thus enhancing its overall business model.
Key Highlights:
- Startup Expansion in Adjacent Markets: Startups that establish dominance in their initial market often expand into adjacent areas and different industries. This expansion is strategically coupled with customer benefits, creating a seamless experience across diverse activities.
- Amazon Prime Case Study: Amazon provides an illustrative example of expanding into an adjacent market. While Amazon’s core business is e-commerce, it ventured into media and content with Amazon Prime. Although this might seem unrelated, Amazon Prime offers premium streaming content and free delivery, enhancing the overall customer experience.
- Customer-Centric Approach: The key to successful expansion into adjacent markets is the alignment of new activities with customer benefits. Even if these activities appear distant from the core business model, they contribute to a more comprehensive and convenient customer experience.
- Enhancing the Business Model: Amazon’s expansion into media and content via Amazon Prime not only adds value to its streaming platform but also complements its e-commerce offering. Bundling free delivery with premium content enhances customer convenience and loyalty.
- Strategic Growth and Diversification: By carefully selecting adjacent areas and activities that resonate with customer needs, startups can effectively grow, diversify, and strengthen their business models.
Connected Business Concepts And Frameworks
Horizontal vs. Vertical Integration
Read Also: Vertical Integration, Horizontal Integration, Supply Chain.
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