Flywheel of Business
‘’Businesses that create Value Chain to lure customers to use one single medium that adds limited or Constant value to increase sales and Profit’’
Value chain represents offering one or more than one services to customers to use and adding Value for them each time.
For Example, Amazon creating value by allowing consumers to buy Stuffs online. And then asking them to be Prime Subscriber to get the kinds of stuff delivered within 2 days. Also giving free membership of Amazon Prime Movie subscription for 2 years.
The flywheel is a Business strategy to gain the advantage of added business value without leaving customer away. Like giving the customer all the benefits and Advantages and not allowing customers to use any other medium. This creates customer stickiness and creates Value in one or the other chain.
‘Amazon Acquisition of Ring Doorbell was only because customers can now order stuff through Alexa and can get it delivered directly in their kitchen through amazon logistics without customer sticking to another medium of resources for the fulfillment’
Ring Doorbell was a startup that was created to automatically unlock the door with Sms or facial recognition or store the goods outside the home with smart storage facility.
Value chain creates a real impact and locks the customer without allowing him to go elsewhere or to use other services. As all e-commerce ventures fight among each other with huge discounts. It is a little difficult for anyone to gain a complete market share unless the customer continuous sticks to the flywheel Value chain.
Wechat in China has created all in one service in one Single App. It has dominated All areas of business inside the App allowing users to book cabs, buy online, book homes services all on the go.
“Wechat claims to have 70% of transactions through its App only because it has created a universe of services, forcing customers to stick to it throughout”
The flywheel as a business strategy works very well for aggregators mostly used by consumers aligning to the core services.
“Careem is a UAE based startup has recently launched Careem Now to cater to food delivery business, It also plans to Fortey into payment services in the region to woo consumers and be the single window for all the services.
Paytm in India aggregates all services on the Single as it is a payments App and the only way they make revenue is by charging withdrawal fees from wallet to bank.
Future of business is adding constant Value to a different set of services to fulfill the core business objective, which could create customer stickiness and can create a constant source of revenue.
