Beepi; the solution to the market for lemons?

7

October

2016

No ratings yet.

The way people buy a car has not changed for decades… until now!! Beepi, a marketplace build on the idea that most people would not buy an used car without a test drive completely changed the way of doing business. After the research, buyers do not have to go offline anymore to test the car. How does this work exactly?

On the 1st of April 2014, Beepi, an online peer-to-peer marketplace that changes the way of selling and buying used cars was founded with the help of seven investors that funded 1.25 million dollars in total. At this moment the total amount of equity funding has reached the amount of 149.95 million dollars after 5 rounds of funding. Beepi not only shows the powerful effect of crowdfunding platforms, which is definitely present, but also a solution to reduce the information asymmetry and make the process of buying a car a lot more easy.

Beepi makes it possible to buy a car in the same way you buy other products, from start to finish, online. Beepi buys the car from the sellers, give them the money and delivers it to the buyers. A certified Beepi representative inspects the car at 240 different points and buyers get a guarantee to get their money back if the car is not what they expected after the 10-day test drive. In this way Beepi makes buying cars a trusted and transparent process. On the other hand, Beepi makes sellers happy, because they guarantee them that the car will be sold within 30 days, because otherwise, they will buy it. On top of it all, Beepi guarantees the lowest price for the buyer without negotiations and the highest returns for the seller. The most logical explanation is because there are less brokers involved. This combination of promises makes sure the information asymmetry between seller and buyer will disappear to a great extent.

Beepi process

Still, a problem to think about is disintermediation; this happens if the buyer and seller continue the purchase offline after consulting Beepi. The recommended solution in cases like this would be to make sure the marketplace provides enough value, safety and comfort for the users. This might be one of the reasons Beepi calls itself an organized, efficient and safe environment.

This sounds almost too good to be true, can we really say that this online marketplace actually comes up with the solution to the market for lemons? And furthermore, is there a possibility that another competitor, for example driveshift.com who still offers buyers a testdrive, enters the market in a way that reduces the information asymmetry even more or in a better way?

 

Resources

https://www.beepi.com/about

https://www.crunchbase.com/organization/beepi#/entity

https://techcrunch.com/2016/04/21/beepi-lets-you-buy-sell-and-now-lease-a-car-with-an-app/

https://hbr.org/2016/04/network-effects-arent-enough

http://www.cnbc.com/2015/05/15/beepi-aims-to-change-the-way-you-shop-for-used-cars.html

 

Please rate this

Disruption with a Big Bang

3

October

2016

5/5 (2)

When it comes to innovation and disruption, established businesses, also called incumbents, that were used to compete in an environment that was build around a Winner-Take-All mentality, were taught to look out for small, new start-ups, also called disruptors. These new players would initially offer cheaper products at the lower end of the market, but gradually expand their selves to the higher segments as well. These disruptors start with a lower-priced inferior alternative for the existing product, which gives the incumbents the chance to act quickly, by for example acquiring the start-up or incubating a competing business, and the time to develop their own innovative products.

 

As explained in the short clip, a new phenomenon takes place since a few years, called Big Bang Disruption. The disruptor is no longer active in the same industry as the incumbents, does no longer enter at the bottom of the market and targets consumers in every segment. Big Bang Disruptors come out of nowhere, can be widely spread in only moments and are very hard to fight and be survived by incumbents. They do not choose between being the low-cost producer, the innovation leader or the most customer-intimate, they are all at once. In short, they create chaos across industries.

Still, there has to be a way for incumbents to act upon these Big Bang Disruptors and have an undisciplined strategy with which they can also be dynamic, unstable and yet more profitable to still lead the way and be the winner that takes all. This could for example be reached by developing an early warning system to act quickly, by using their brand value, access to capital, customer relationships and near-perfect market information to drive innovations and mitigate risks early or by emerging as a new entity that seems to only share the same name as the former business, but nothing else.

It is clear that this development, which occurs in almost every industry, can not be stopped and the aforementioned solutions are only examples of countermovement. It is of the utmost importance to think of other ways for incumbents to protect themselves from these Big Bang Disruptors, whilst not being influenced by emotional and denial aspects to still win from them with their own innovations. What would in the end be the best strategy for incumbents to handle the renewed approach of disruptors? Which businesses are most vulnerable for possible disasters caused by these disruptors? And how can incumbents avoid these disasters and use them in their advantage whilst realistically look into the future? What do you think?

 

Resources

Downes, L., Nunes, P. (2013) ‘Big-Bang Disruption’ Harvard Business Review, March 2013.

Downes, L., Nunes, P. (2015) Seven Essential Questions about Big Bang Disruption, http://www.forbes.com/sites/bigbangdisruption/2015/12/14/seven-essential-questions-about-big-bang-disruption-just-the-faqs/2/#ff6578716c35, 2nd of October 2016.

Nunes, P. (2014) Disrupting the disruptive innovators – winner takes all,

http://www.enterpriseinnovation.net/article/disrupting-disruptive-innovators-winner-takes-all-1457485615, 3rd of October 2016.

 https://www.accenture.com/us-en/bigbangdisruption?c=tech_aihpbigbng_10000007&n=pac_1213, 3rd of October 2016.

 

Please rate this

Technology of the Week – How the mealbox changes the way we do groceries

15

September

2016

No ratings yet.

The Dutch grocery industry is a very large industry with a yearly revenue of 35.9 billion euros. Consumers will never save money on buying groceries, because they need those convenience goods to stay alive. Over the last few years, retailers already started an online channel to sell their products via mobile or desktop, this leads to an omni-channel environment. However, this grocery industry also attracts disruptive players, who pay more attention to customers and communities, such as HelloFresh and Allerhande Box. They provide customers with an innovative, healthy and trendy way to order groceries and meals online.

HelloFresh provides a variety of meals for groups of different sizes in three different boxes. HelloFresh focuses on fresh and healthy products from passionate and high-quality suppliers. HelloFresh knows exactly what its customer is like by being data driven. The company wants to provide its customers with varied and fast recipes, which make it easy to cook at home without time-consuming grocery shopping. HelloFresh focuses on women aged 30 to 40 years with a busy life, but its customer base is really divers. The promotion of HelloFresh includes discount coupons, promotional teams, commercials and a combination between offline and online marketing.

Allerhande Box delivers a variety of fresh ingredients and recipes for three healthy meals in two different meal boxes to fulfill the requirements of audience groups. Allerhande Box is linked to the largest Dutch grocery store Albert Heijn and focuses on cooking for customers with familiar products. Customers already visit Albert Heijn stores and use the personalized ‘Bonuskaart’, which provides Allerhande Box with a lot of contact moments and data. Through the already-existing Appie app customers can get a lot of relevant and personal information. Allerhande Box targets high-end young couples and families. Customers can order extra groceries alongside their meal box while it gets delivered for free, or pick up at a store. At first, customers omly buy preserved products online and later on they also add fresh products. Research shows that 27% of the Dutch consumers considered to buy a meal box in 2016.

Schermafbeelding 2016-09-14 om 15.52.13

Although the innovative business models are similar, they are aimed at different customers. Allerhande box aims more at the mainstream customer. The HelloFresh box aims for a socially and environmentally responsible target group. That is why HelloFresh also posts background stories on their blog. Therefore, the best business model is dependable on the preferences of an individual customer.

When we analyze the future potential of the innovative business models, we predict that these kinds of concepts will only become more important. This decade can be characterized by volatility and convenience with a focus on health and nutrition. The business models of Allerhande Box and HelloFresh embrace these developments by offering convenience and healthy ingredients at the same time. However, a relatively small audience supports the business models. Customers whom are not in the high-end segment will continue to do groceries traditionally. For this manner, these models will never replace the traditional way of grocery shopping.

Group 18
Merle Stadhouders – 385904
Lester Tersteeg – 376346
Alex Hartevelt – 373697
Quirine Paauwe – 373437

Sources:
Albert Heijn (2016). Allerhande Box. Retrieved from http://www.ah.nl/allerhandebox

Financiële Dagblad (2015). Digitale aankopen per smartphone stijgen ‘explosief’. Retrieved from https://fd.nl/economie-politiek/1130333/digitaal-aankopen-per-smartphone-stijgt-explosief

HelloFresh (2016). Retrieved from https://www.hellofresh.nl/tasty/

Li, T. (2016) ‘Omni-channel’, Information Strategy Session 2, Rotterdam (12 september 2016)

Please rate this