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Implications: old business + new recipe

A competitive and strategical approach for traditional businesses to consider, in order to successfully compete with the sharing economy.
old business + new recipe
© RMIT University 2017
If you can’t beat them, join them…another way to compete with businesses in the sharing economy is to join it. The easier strategy here will be to switch to or add a rental option instead of outright purchase; easier because it requires the least strategic effort.
Traditional stores can now simply provide options for rental at lower costs—just like business-to-consumer access, with the option to own the products. After all, those who provide tool sharing and equipment sharing through the sharing economy first had to buy them from these stores. Thus this strategy may be the most logical reaction.
Those businesses who were already providing business-to-consumer access but are considered traditional businesses—like taxi companies and hotels—can use the same platforms individuals use to operate in the sharing economy. There are hotels, hostels and lodges in New York, Chicago and Paris who are now listing their rooms on Airbnb. It is not clear how Airbnb will respond to this—considering their strategic move towards building a community of hosts and guests— and what this means for individuals who have their homes listed on the platform.
It is possible that people considering starting their own taxi companies may find operational loopholes to list on Uber. But this is not ideal, and it is unlikely that Uber will permit such listings even if traditional companies were open about such an option. Additionally, this may not be permitted under existing regulations as it may violate the laws on anti-competition.
Activity
Imagine you are a local clothing retailer in Melbourne and you decided that joining the sharing economy is the only viable option for your business. What problems can you foresee if you were to change your business to rent out your products instead of selling them? Is it possible to overcome these problems?
Post your thoughts to the Comments area.

© RMIT University 2017
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Business Futures: the Sharing Economy

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