Old business models are being transformed digitally

Old business models are being transformed digitally

Transforming to a digital business

Old business models are being transformed digitally

The brick and mortar way of doing business is already becoming outdated. The old business models are being transformed digitally. Technology being an enabler is changing the fundamentals of business and the revenue stream of many organizations.

It’s really difficult to understand that a company like Blockbuster is out of business considering once upon a time it had approximately 60.000 employees and over 9.000 stores. But disruption is sweeping!

Complacency will kill the cat - Curiosity didn’t kill the cat

Transforming to a digital business

Netflix is one of the most prominent examples in the digital transformation space. The company’s business model or strategy is streaming videos by paid subscription. This is a radical innovation if one consider the fact that prior to Netflix, the only way to rent movies was through Cable companies and brick and mortar stores, where Blockbuster was a major player. Their ability to create and capture value has led to incumbents including Blockbuster and “Mom and Pops” video rental services going out of business.

Netflix started as a mail order DVD rental service and gradually transitioned to a video streaming service. With 65 million subscribers and streaming more than 3 billion hours of video every month – Netflix predict it will have 69 million subscribers by the end of the third quarter 2015 – Netflix has moved to a video nexus of unrivaled proportions in just eight short years.

But Netflix is more than just a video streamer these days. The company has grown so quickly that it now eclipses traditional TV networks in both popularity, and viewing hours.

The transformation journey

Hopefully there aren’t many leaders out there thinking that their organizations are immune to the Blockbuster scenario. Businesses need to think of proactively transforming themselves or they will be left behind. Being left out in the transformation journey will “kill” most organizations. So don’t get stuck in the jar!

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

Blog Comments

I think it would be better if a business has both a physical store and an online presence. Even though a lot of people are shifting to online shopping or e-commerce, there’s still a big percentage of people who prefers to buy things from a brick and mortar business or company because once the things that they wanted to buy registers on their minds, they would just go to where it is available. Unlike online shopping where they have to wait for the item to come, people has a liberty of quick possession and see the products first hand before making a purchase in buying to brick and mortar establishments.

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