Razor-blade model disrupted by Razwar’s convenient subscription service

Nick — Wed, 01 Jul 2009 17:04:29 +0000

The new business Razwar of the company Growth Bridge fights directly against the big boys in the razor blade market. Instead of using the traditional bait-and-hook principle as it’s being used by Gillette or Wilkinson Sword, this e-shop brings the subscription service concept to the razor blade business. After buying a start kit of € 7.50, users subscribe in order to receive razor blades on a regular basis. For the fixed annual fee of € 27.50 Razwar will deliver 30 razor blades 3 times a year. Straight-forward but innovative in its sector.

This is a good example of a so called blue ocean strategy. Instead of focusing on the traditional value parameters in this market (more blades, less irritation,…), razwar tries to change the rules of the game by focusing on convenience and price transparency. In this case, they offer a service to the client instead of regular product sales. Nowadays many commodities are being sold in a similar way. Monthly Socks, Monthly Boxers or Subscription Condoms are good examples. What other concepts do you know?

Will EA embrace the Free Pirate game Business model – iPhone like?

Nick — Wed, 24 Jun 2009 22:29:11 +0000

For years game publishers could rely on the sales of relative expansive game discs to gain their profits. But then together with internet the peer-to-peer networks came up which made it easier for consumers to find cheap alternative solutions to play their most favorite games. After years of fighting against this change in consumers behavior EA now tries to find a new business concept where they could actually make use of this new network possibilities. Buying a disc (or downloading the game) is only a one-time transaction. Once games are connected to the EA server network then extra recurrent micro-transactions are possible. Extra levels, game add-ons or even third party sales could take place inside the game in order to expand the game experience. Possibly this second transaction could become so large that in the end the first transaction would become insignificant. In that case pirated versions of game are just a part of a demo program of a game publisher.

Once you understand that revenue could come from these kind of transactions then you know why Apple for instance doesn’t force old iPhone user to buy new iPhones in order to make use their new software updates. Apple will earn the biggest amount of money with the sales inside the different apps. So when more users have access to the iTunes iPhone store, the more revenue can come in. Then you also know why Apple doesn’t focus on a broad range of iPhones. Nokia on the other hand does and by doing this they still are trying to make their money on the margins of actual cell phone sales like EA did with the actual sales of game discs.

Board of Innovation » recurrent transactions

Razor-blade model disrupted by Razwar’s convenient subscription service

Will EA embrace the Free Pirate game Business model – iPhone like?