Understanding Top 10 Disruptive Business Models
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- jaro Education
- 9, May 2023
- 9:39 am
Have you ever wondered why businesses like Uber, Airbnb, and Netflix not only compete but have also transformed their industries entirely? Their business models are disruptive, and this is the secret. These are not merely business strategies; they are transforming customer thinking, behavior, and purchasing decisions.
In the modern digital era, the old models are becoming a thing of the past, and disruptive models are setting the pace of the future. As an entrepreneur, student, or business enthusiast, these game-changing models can present you with exciting opportunities, whether you know them or not.
Now, we will discuss the Top 10 Disruptive Business Models building industries in 2025.
What Does a Disruptive Business Model Mean?
A disruptive business model refers to a new way of doing things in an industry, instead of merely enhancing a product or service that is already present. Rather than competing on the same level as traditional businesses, disruptive models offer new value delivery methods, which in many cases involve making goods less expensive, more available, or more convenient to customers.
For example:
- Netflix shook up the cable TV system by providing streaming on demand.
- Uber developed a mobile application to break the taxi business model.
- Airbnb broke the walls of the hospitality industry as it allowed individuals to rent out their houses.
To put it in simple terms, a disruptive business model breaks the rules and establishes new ones. It provides startups with the ability to compete with large businesses and enables businesses to access customers in new ways that were previously unachievable.
Some of the main characteristics of a disruptive business model include:
- Customer-first approach
- Innovation that is technologically driven
- Lower cost, higher value
- Pay attention to ease and accessibility
- Grows fast in new markets around the globe.
Growth and innovation lie at the heart of all companies. One of the best ways to achieve this is by using a disruptive business model, as constantly evolving and redefining is a staple of strategic sales management. In this blog post, we’ll be exploring the top 10 most disruptive business models out there.
1. On-Demand Model
The on-demand model is one of the most disruptive business models in recent years. This model enables businesses to provide products and services to customers on an as-needed basis, without the need for them to commit to a long-term contract or purchase.
This model has been popularised by companies such as Uber, which allows customers to order a ride with the click of a button, and Airbnb, which makes it easy for people to find short-term accommodation in cities around the world.
2. Pyramid Model
It involves a company offering a product or service at a lower price than its competitors. To make up for the lower prices, the company offers a higher-quality product or service.
This disruptive business model is often used by companies that are trying to disrupt an existing market. By offering a lower price and a higher quality product, the company can attract new customers and take market share away from its competitors.
3. Experience Model
The experience model is based on the premise that businesses can create more value for their customers by providing them with an exceptional customer experience.
This customer experience can be delivered in several different ways. The focus, however, should always be on delivering value to the customer.
One of the most well-known examples of this model is Apple, which has built its entire business around providing its customers with an exceptional user experience.
4. Hypermarket Model
This business model was first pioneered by the French retailer Carrefour in 1963. The main idea behind this model is to sell products at a rate lower than the cost price.
As a result, they can sell amenities at very competitive prices and capture the market. One of the best examples of this model is Amazon, which has used low prices and convenience to drive many brick-and-mortar establishments out of business.
5. Access Over Ownership Model
In recent years, there has been a shift from an ownership model to an access model in many industries. With the rise of the sharing economy, consumers are increasingly valuing access over ownership.
There are several reasons for this trend. First, it is more affordable to access items than to own them. Second, it is easier and more convenient to access items than to own them.
However, the access over ownership model is disrupting several industries, including transportation, lodging, media, and retail.
6. Marketplace Model
In the marketplace business model, companies connect buyers and sellers to enable transactions. They may take a commission from each transaction or charge a subscription fee to list products or services.
Some of the most successful marketplaces are those that focus on a niche market or sector. For example, Etsy is a marketplace for handmade goods and vintage items, and Upwork is a marketplace for freelancers to find work.
7. Free Model
In this model, businesses give away their products or services for free to attract customers. Once they have a large customer base, they can then upsell them on premium versions of their products or services.
This model has been popularised by companies like Google and Facebook, which give away their products for free and then later introduce paid features like ads and promotions.
8. Subscription Model
Subscription models are based on the recurring revenue model, where customers pay a monthly or annual fee to access a service or product. This recurring revenue stream gives subscription businesses a predictable and reliable source of income, which can be used to reinvest in the business and drive growth.
It allows businesses to build closer relationships with their customers by providing them with regular value. In addition, subscription businesses often have lower customer acquisition costs (CAC) than other business models.
9. Ecosystem Model
In this disruptive business model, a company creates a system of interconnected products and services that are designed to work together to meet the needs of the customer.
The company then uses this system to create value for the customer by providing a better experience, more convenience, or lower cost.
The most successful example is Amazon, which has created a vast ecosystem of products and services that work together to meet the needs of its customers.
10. Freemium Model
This model allows users to use a product or service for free, with the option to upgrade to a premium version for more features or storage.
One of the biggest advantages of the freemium model is that it allows companies to scale quickly and reach a large audience with little marketing spend.
This model also has a low barrier to entry, which can encourage viral growth. However, the freemium model can be challenging to monetize, requiring some careful sales management.
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Jaro Education: Your Trusted Career Counselor and Guide
When it comes to the modern competitive world, making the correct career choice can be a daunting task, but luckily, this is where Jaro Education comes in to help you as your close advisor and guide. Jaro Education can help you make smarter decisions, develop future-proof skills, and get ahead in a world that has been transformed by disruptive business models, with expert guidance, industry-relevant programs, and collaborations with leading educational institutions. Jaro Education can make the difference between a successful career and a future-proof one, whether you are a student or a business employee.
Conclusion
Disruptive Business Models can be beneficial for business owners and their customers alike. By utilising different disruptive models, businesses can gain a competitive advantage over their competitors in the marketplace.
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