5+1 steps to success in the sharing economy
According to PwC's research released in 2014, sharing economy sectors could potentially generate global revenues of around $335bn by 2025. This trend is more and more visible as we approach PwC's deadline, thus we think every CEO should take the time to think about, how its company could benefit from the opportunities sharing economy provides us.
What is 'Sharing Economy'?
Sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time.
Relying on PwC's report "Five steps to success in the sharing economy" here we provide 5+1 tips for companies aiming to become a successful sharing business.
1) Understand two core 'sharing' models and the potential role they could play in your sector
We can name two fundamental, but overlapping business models in sharing economy:
- access: are types of transaction that result in access to a product or service, rather than ownership (e.g. Netflix).
- peer-to-peer: are transactions that connect the spare capacity of consumers with demand from their peers (e.g. Oszkar).
To stay ahead of your rivals you should keep track of these two models and how they affect your sector, what new technologies they indicate. Leaders who step out of their comfort zone will be the ones that see change occurring first and may spot the opportunities of sharing economy in an early phase.
2) Choose your strategy
You may come up with different strategies that work just as fine as others in sharing economy, as long as you take action. We see three options for you:
- You may focus on neutralising tactical threats by differentiating existing products in order to compete with sharing rivals; joining together with other major players or funding acquisitions.
- You can test new sharing ventures by developing strategic partnerships with sharing platforms or by making strategic investments and include their successful products or services as complements within your current portfolio.
- You may as well pivot the organisation by building a full-service “sharing” model as a core product or service proposition. In this case you should invest significantly in product development and marketing.
3) Focus on the user experience
Sharing economy’s success is mainly a result of how it has helped consumers to achieve the outcomes they want, without the requirement of ownership. Thus consumers stand at the core of sharing economy, and this means, you need to develop your sharing service that meets your user’s expectations, fits they work of habits and requirements.
4) Assess the potential for sharing of your organisation’s asset base
Today’s manufacturing facilities operate at an average of around 20% below capacity, but using sharing economy can allow these to move much closer to maximum efficiency. The sharing market for intangible assets – a company’s brainpower, knowledge, brand and other intellectual capital – shows just as much promise. So as a first step to success you should check how your own business could benefit by implementing sharing economy solutions.
5) Stay aware of the potential impediment caused by regulation
Most of the time the most immediate potential impediment to growth of sharing economy businesses is regulation. The laws should be looked at from a fresh perspective, however regulation itself is not enough flexible to follow the change. To gain success you must be prepared for any obstacle regulation can put in front of you. Be proactive, engage in working out the principles of sharing economy and make sure you have enough data on how sharing economy can have a positive economic or social impact.
+1 Choose your sharable assets wisely
Sharing economy is flourishing in five sectors: peer-to-peer accommodation, car sharing, peer-to-peer finance, music, TV and video streaming, and online staffing – for a reason. These sectors work with assets that are completely suitable for sharing: by sharing them you spare a lot of money, they operate below capacity, and there’s a real need for using these assets. When choosing your assets to share these aspect you should indeed keep in mind to run a successful business in sharing economy.
Source and more information: PwC