Online Custom «Summary: Adapting to the Sharing Economy» Essay Sample

Summary: Adapting to the Sharing Economy

This paper highlights the change in consumer’s behavior where people and organizations have opted to reduce their risks by not owning or buying products and focusing on sharing and leasing them. This trend of collaborative consumption has benefited companies by adapting to creative approaches in distributing and defining their offerings. The consumers have changed their mode from accessing and buying the desired products to the mode where they seek for a temporary access to them. This has led to the system of sharing over the internet to enhance connections. However, this system appears to present serious threats to established industries due to less sales and resulting distress in conventional market.

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This article observes the evolution of new business models and the emergence of the sharing economy in collaborative consumptions.  The research aims to identify how companies may react to this kind of trend and adapt their business models to the emerging consumerism. The strategies that the author presents in this article are derived from a case analysis and discussion with company executives and interaction in various workshops.  In a wider sense, sharing is regarded as anything to which access to products and services can be enhanced through pooling resources, services and products. The environmental argument that arises based on the sharing economy is that the more people continue to share, the less earth resources shall be consumed and this would create economic efficiency and sustainable consumption. However, tangible evidence suggests that the spread of sharing may not entirely have stemmed from ideological motivation or ecological awareness but the motivation is more self-oriented where consumers prefer low costs which are provided by sharing economy.  This means that those companies are seeking opportunities in the sharing economy have higher potential of promoting their products and services in the realm of collaborative consumption. These companies will seek to benefit through the following ways.

  1. Selling the usage of a product other than the ownership. Conventional business model where firms seek for profits through sales of products, new source of revenue for sharing economies would be based on the service charges for the use of the product.
  2. Supporting customers in their efforts to resell used product. Sharing companies would mediate buying and selling activities and thus earn from the efforts made in supporting the customer’s wish to resell the product.
  3. Taking advantage of unused capacities and resources. Sharing economies would help companies to share existing capacities and assets in an economical manner. This strategy can be more useful when the specific assets are not easy to acquire due to the huge amount of the capital required.
  4. Providing maintenance and repairing services. Sharing companies have capacity to hire experts to repair the products and participate in the economy by renting out the expertise to consumers. More people share the product, more it is used, thus increasing the need for repair and maintenance services.
  5. Supporting collaborative consumption in targeting new consumers. Sharing consumers can generate new sources of revenue and thus get profits. This approach may involve aligning with peer-to-peer networking to promote one’s products and services to potential customers.
  6. Seeking new business models based on the shared economy. Unlike other approaches that describe how the companies can adapt the existing business models to collaborative consumption, this approach describes the emergence of new models as well.

In conclusion, sharing economy has gained ground and fundamentally altering the traditional consumer culture. Networking technologies, collaborative software, social media and changing habits of consumers are all encouraging the growth of this movement. Helping people in their attempt to share does not necessarily mean that one will buy the product but only providing support to advance the new economic culture.

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