The McDonald's study

                                                    

McDonald's, a fast-food company that marks its presence in more than 100 countries as of 2020 serves millions of people every day you visit America India, or Australia.

You'll get a similar experience in a McDonald's restaurant the craze for its wide variety of fast food can be seen in many parts of the world back in 1955 when ray Kroc became a franchisee agent of the true founders of the company Richard and morrice McDonald.

 No one would have thought that it would at some point in future become the behemoth of burgers but have you wondered what makes McDonald's so large or how has it sustained effectively all these years and continues to thrive?

 certainly, its business model  we are going to outline the strategies that make it so successful  one of the first things that it should focus on is consistency more so if it has different branches or outlets maintaining consistency is the first USB of McDonald's no matter in which country you are if you walk into a McDonald's restaurant you'll get a similar experience.

Ray Kroc had a motto quality service cleanliness and the value he believed in this moto so strongly that he went on to launch a training school in 1961 called the "hamburger university"

The university continues to offer training programs for franchisees. Consistency concept forms a very crucial part of the university's curriculum next is its amazing ability to localize the food items or the menu as per the taste of respective people of any country.

 The biggest example of this situation is India where it amazingly adapted to the vegetarian needs of the people and altered its menu accordingly, it not only serves a good option in the non-veg section but its vegetarian menu of fast foods is equally good and tasty moving on to the next strategy that makes McDonald's so popular is its ability to take risks all these years.

A firm that started with a simple menu in the united states and offered items like hamburger cheeseburger fries shake and beverages kept improving all these years be the addition of breakfast items the happy meal or McNuggets now has a lot to offer to eat.

McDonald's tagline "I'm loving it" is now known to a significant number of people around the world the brand presence it has created is worth the praise in countries like the US, Canada Australia, and many more people have an emotional attachment with this fast-food brand as it reminds most of them of their childhood a well-known fact is that a good brand presence helps your business to add credibility and loyal customers too.

The innovation

The next point about the business is the strategy adopted by McDonald's which is worth mentioning is the innovation yes, while it stays consistent with the core component of its business that's quality service cleanliness and value at the same time it has also incorporated innovation innovating on the response and feedback it gets from its customers is what helps to keep it moving to take an interesting.

 Instance from 1975 where you can figure out how McDonald's has added the factor of innovation, the story goes like this a group of soldiers in the united states wanted to buy some food items from McDonald's but the issue was that they were not allowed to get out of their cars as they were wearing their fatigues when the people at McDonald's learned about it, a solution was found which was a drive-through and this is how the first drive-through of McDonald's was built near a military base present in sierra vista Arizona

A similar example is that of the introduction of the smartphone ordering the system last year also went on to buy stakes in tech firms through which it aims to improve the user's ordering online these were some important strategies of McDonald's business model that has helped to withstand every storm since it got established it continues to display a great lesson for other companies as the magnitude of McDonald's operation is large

What is AirBnb?

                           StartUp at the Year 2008, USA.

The National Bureau of Economic Research announced that on December 1, 2008, the USA had entered a recession in December 2007. but as a matter of fact, the recession was not only hindering the US perhaps nations all around the international have been feeling the consequences of the monetary nightmare. There have been two-point six million people were in unemployment, numerous billion-greenback businesses filed for bankruptcy, and the arena economic system changed into a hit with a $2 trillion bill.

The 2008 monetary disaster changed into so intense that it changed into dubbed the worst monetary meltdown withinside the United States since Great Depression. And it lasted for almost a year and a half. Now, if I requested you, "Would you want to set up a commercial enterprise?" in the course of this dreadful period, could you assert yes? What could be your response? You'd probably declare me insane, here.

Airbnb started at this time of recession besides they have become a billion-greenback enterprise due to the paradigm alternate that the recession delivered approximately. 

So, what is the idea behind Airbnb that makes it so unique? How did they manipulate to be successful withinside the midst of the recession? And, most importantly, what are the commercial enterprise lessons that you could inculcate from this business study.

We often normally feel that on every occasion maybe it's a disaster of any type, whether or not it's far a political disaster, a monetary disaster, or maybe a pandemic, it continually results in a paradigm shift in social behavior. 

When the recession hit America, hundreds of thousands of people misplaced their jobs and have been in dire want of cash. In fact, at that period, the perspective towards their lifestyle changed, now no longer to shop for a pleasant vehicle or assets rather the people were earning for their survival, now it was the matter of existence and death.

 

THE IDEA

In reality, the founders of Airbnb could not pay their rent so that they commenced web websites hosting strangers of their domestic in change for rent. At the equal time, people who have been journeying wanted an inexpensive preference due to the fact, after all, they did not have lots of cash, right? And it changed into then that Airbnb related the host with the guest, growing a commercial enterprise version that allowed the host to earn passive earnings at the same time as supplying a less expensive and higher opportunity to inns for the guest.

This is why the idea of Airbnb changed into a sport changer, and what was observed changed into the beginning of a billion-greenback enterprise that redefined tour for Millenials, which we now recognize because of the short-time period domestic condominium enterprise. And this behavioral paradigm shift is referred to as the collaborative intake movement, wherein society believes in sharing possession of assets instead of retaining them to themselves. And the economic system that emerges from it's far referred to as 'The Sharing Economy.'.

Interesting reality According to a report, the sharing economic system will develop from $14 billion in 2014 to $335 billion with the aid of using 2025, primarily based totally on the valuations of Uber and Airbnb. And it's far due to the emergence of the sharing economic system that, beginning in 2008, some of the startups primarily based totally on the idea of collaborative intake have long gone directly to grow to be million, if now no longer billion-greenback businesses. And because the twenty-first century progresses, society will become greater hospitable to this form of enterprise. This is the primary and critical answer to our question of why Airbnb has been this type of large success.

The query is, wasn't Airbnb one among many startups with this same base idea, but the question is why then Airbnb in particular succeeded. This brings me to the second element of Airbnb, which is designing for belief/relationship. earlier, people have been renting out locations out of necessity,  but the problem here was both guest and host were no longer up to the comfort level due to the fact the rate of belief couldn't be set up among the host and the guest, however, thankfully, Joe and Brian have been layout college students who understood the significance of layout in constructing human relationships. As a result, they took it very severely and commenced experimenting with a consumer enjoy version too.

After a few trials and errors, they located that if the host delivered himself and defined a bit approximately himself that is if the host is elaborating about himself,  then the guest or the visitors will come at greater comfort level than they were before if they handiest knew approximately the assets.

Second, they carried out a joint look with Stanford to decide the elements that make contributions to interpersonal believe. That's after they located that the greater numerous human beings have been, the greater tough it changed into to set up belief.

For example, think you are a 23-yr-vintage Pune resident who meets a number in Delhi who's a local Punekar. You will start to believe that individual ton greater effortlessly than you'll a 40-yr-vintage Gujarati host residing in Delhi. However, they located that whilst you upload social recognition to an individual, no matter how numerous their backgrounds are, the rate of belief will increase significantly. In this case, the social recognition changed into completely decided with the aid of using the reviews. 

And visitors would feel more comfortable and more likely to believe if the host has more than three reviews,  And for the visitor, they created a small questionnaire to assist them to introduce themselves speedily and in a manner, this is neither formal nor informal.

The X element of Airbnb 

The main element of Airbnb which distinguish from their competitor is the relationship among their customers, Paul Graham founder of Y combinator particularly mentioned the importance of customer relationship and even suggested interacting and making a cordial format to Airbnb boys. After at the time when Airbnb was just started as a company, they literally interacted with their customer even though financially they were not stable at that time but still they tried to travel and had kept a friendly relationship with all their customer, they stayed for weeks and had discussions, and at the end, they actually got many insights from them which eventually helped the company as a whole. 

Most importantly, when they finished, they invited the host over for a lager later that night, sat with them, and constructed a  friendly relation with them. They exchanged stories, had good communication, or even informed them approximately the potential flaws of  Airbnb. And bet what, They shaped this type of robust bond with the hosts that they have been in a position to name them later and inform them that they knew their fee changed into too excessive or that they had to write a higher description. Soon after, all of those listings commenced to get hold of lots greater traffic, and those from all around the international who has been journeying New York commenced to book those Airbnbs, permitting the hosts to earn lots greater cash.

In reality, traffic to New York speedy have become hosts, and that they commenced listing their assets, and suddenly, assets listings commenced shooting up all around the international, together with Germany, Spain, or even Hong Kong. This is how Airbnb laid a strong basis for the maximum effective shape of marketing, phrase of mouth, with the aid of using reworking hosts into logo ambassadors. This is how the aggregate of timing, layout for belief, and empathy have become the proper recipe for Airbnb's success. Today, Airbnb is so massive that it has 7 million listings in 191 nations and made $4.7 billion in sales in 2019.

Spotify in business loss?

 

                                           The Streaming War 

We all know that Spotify is by far the most successful audio streaming platform in the world. In fact, even during the pandemic itself, the stock price of Spotify went up by 70%. Now, on the outside, if you look at the numbers while Apple Music has only 72 million users Spotify has more than 345 million users and the rest of the competition is not even close. On top of that, its recommendation and playlist have been so amazing that you'll agree that it has given you an incredible experience every single time.

 But you know what?  Fortunately, or unfortunately, in 2021, Spotify is in deep-deep trouble. While on one side the losses of the company have been stacking up rapidly On the other side with the giants entering the streaming market Spotify is officially in a business war. And what we are witnessing right now is perhaps one of the most interesting Internet business wars in history. And if you pay very close attention, you'll be able to learn some incredible business lessons.

 The question is- What is this business war, what are the business lessons that you can learn from this iconic case study. 

People, the music streaming revolution of the world started way back in the 1990s. Now, back then from 1984 to 1999 CDs were the ultimate instrument of the music industry. The distribution channels of the music CDs made the record labels and musicians billions of dollars every single year. But in the 1990s the Internet and the computer revolution began to pick up resulting in massive penetration of both, computers and the web, into the American household.

The First Wave Of Music Streaming 

 Now,  if you see this is a fine culmination of technology and connectivity, and if you observe closely every time this golden combination happens, it gives rise to a new generation of startups. In the music industry, it was the company called Napster which was started way back in 1999 by Shawn Fanning and Sean Parker. In simple words, Napster was nothing but a music torrent instead of buying a CD for 20 dollars you can download an MP3 file for free and share it with your friends. This invention was a disruption in the making because what followed next was the first wave of music streaming. And this wave did not just change the way people listen to music it literally changed the entire music industry. Within a few months.

Napster had 4 million song downloads and in less than a year, It had 20 million users. Now, initially, people thought that it's no big deal. But in some time, the numbers of Napster exploded further, to 60 million users by 2001. And this is when the record labels began to realize that their stores are incurring losses and when they actually computed it shocked them to see that they were incurring more than $100 million in losses due to Napster. And that's when hell broke loose for Napster, they got slapped with a lot of lawsuits, and what followed next was the historic suit that led Napster to pay millions of dollars to artists, creators, and record label companies eventually they had to shut down their operation in some time. 

Now, while most people thought that piracy will be gone and that CDs will be back, as it turns out, Napster left the market but the behavioral design of the society had been so strongly altered that people just didn't go back to CDs at all, The CD stores were still closing down and other piracy websites took the place of Napster. Companies were still incurring millions of dollars of losses because people just wouldn't pay $20 for an album.

The Second Wave Of Music Streaming This was the time where record labels were disparately looking out for an alternative to actually get their distribution channel back on track because they have come to big losses. And while all of this drama was going on, there was one man who noticed this and decided to become an opportunist during times of chaos, And this man was none other than the legendary Steve Jobs himself and the solution that he brought to the table was to give people ultra-cheap music and to give record labels a non-pirate able distribution channel for their music. And this solution was none other than the iconic iPod and the rest is history. The record labels again started to make billions of dollars customers fell in love with the iPod as it brought along with the second wave of the music streaming revolution. 

But but but  (3X)There were two major problems over here Number one, not everyone owned an iPod or a MacBook, and number two, not everyone could pay for each album. But everyone had computers and the Internet. So, guess what? This culmination of technology and connectivity, again, gave rise to another generation of startups and the most successful player in this segment turned out to be none other than Spotify which started way back in 2006.

The Third Wave Of Music Streaming: Spotify learned from the pains of the customers and decided to build a music streaming platform that could be used by everyone and could be used by everyone for free and this is where Spotify deploys its freemium model with an option to subscribe but this time it wasn't easy because they knew what happened to Napster, and the subscription model was way more complex than the discreet model of iTunes. Because when it comes to CDs or iTunes, it was pretty straightforward you buy a $1 album from iTunes80% of that goes to record labels and 20% of that is mediator fees and that's it. Whereas in the case of subscription, it's quite difficult because you are giving unlimited access to everyone for a defined fee. So, the revenue distribution itself becomes very very complex. But fortunately, the Spotify guys got through it and they spent about $9.8 billion between 2006 to 2018just to get the music rights without legal issues and they built the freemium model to make music accessible to everyone. And what followed next was the third wave of music streaming that is, unlimited legal music that could be listened to for free. As a result of which, again, Spotify exploded and today it is a market leader with the highest number of paid subscribers. 

But again, there were 3 problems. 

Number one, 

Ad revenue was not enough to pay the artists well and because the music is free, very few people actually opted in for a subscription. 

Number two,

There was no profit for Spotify, in fact, the company suffered massive losses during its rise. 

And last and most importantly 

Things got really ugly with the artists, Taylor Swift and Adele broke up with Spotify over low pay. And again, it led to a series of troubles for them from the creators' side. 

Now, the company was badly cornered. With massive losses on one side annoyed artists on the other and on top of that, they've now got freebie-loving customers. And this gave them no option but to run a lot of ads to push their customers to buy Spotify Premium and hence a lot of interruptions.

The Emerging Tech Giants: And this is when ladies and gentlemen, two more giants decided to step into the game. In 2015, Apple introduced that it's going to kill iTunes and launch the subscription model which was Apple Music as direct competition to Spotify. And in just 5 months, in November 2015, YouTube entered the streaming wars with YouTube Music. Now, if you observe this streaming war very closely guys, you'll see that both these services, that is, Apple Music and YouTube Music are built over the weaknesses of Spotify. And with just a few moves here and there Spotify could be killed and there could be another wave of social media revolution on YouTube. 

Apple Music deploys a premium model and it's only for Apple users while Spotify and YouTube Music are for everyone and they use the freemium model which gives them a wider audience. Now, if you look at the user base, Apple has 1.65 billion users Spotify has 345 million users and YouTube, well it’s got 2.1 billion users. But when it comes to paid subscriptions Spotify is way ahead of Apple because of its accessibility through both Android and Apple. While Apple Music has only 72 million users but all of them are paid Spotify has 345 million users out of which 155 million of them pay. Now, the X factor for Spotify over here is its amazing playlists and podcasts that are integrated into the app, and this is where we saw Spotify coming out with Spotify Originals like 22 Yarns and signing up creators like Joe Rogan to become Spotify exclusive. But Apple and YouTube both also have their podcast but separately. YouTube has Google Podcasts and Apple has Apple Podcasts. And now, guys here come the big difference. While Apple Music generates revenue of $4.1 billion with very less profits because it's just an ecosystem product Spotify being a standalone incurred a loss of $698 million despite generating a revenue of $9.2 billion. And YouTube?  Well, it's way ahead of the game with $19.7 billion in revenue and this is mainly because of its video service. 

YouTube Music The fourth Wave Of Music Streaming? Fun fact: YouTube is one of the most popular platforms to discover musicians and artists. if you take a step back (I don't know if you see this) but YouTube can literally accommodate every single X factor of Spotify and Apple music in the YouTube app itself. 

Number one,

 You are kind of already searching for songs through lyrics from Google and YouTube which is the USP of Apple Music. 

Number two, 

You can ask Google which song is playing and it will find that out for you which is nothing but a Shazam feature. 

And most importantly 

Google has Google Podcasts and a huge base of creators who are already making podcasts on YouTube. Now, every single creator knows that  YouTube is by far the best platform for creating content. And users know very well how well YouTube understands them and their preferences. Now, if YouTube rolls out an update tomorrow saying that Google Podcasts is now integrated into YouTube as YouTube podcasts. Do you realize what's going to happen? It is going to lead to another huge wave of creators who will flock to upload their audio content on YouTube because there are already a ton of audio creators who are desperately wanting to be on YouTube. And if given a chance with the YouTube algorithm, it's going to be a game-changer for them. And the best part is because it's available on both Android and iOS, the user base is insanely huge.  So, basically, YouTube literally has the best of both Spotify and Apple. And when integrated together, it will become unbeatable in the content space, just like Instagram is right now for social media networks. And my sense is, one day there will be a grand announcement that's going to change everything for Spotify. This is what, ladies and gentlemen are happening in the streaming wars.

Now let's move on to the most important part and that, what are the lessons that we can learn from this iconic case study. 

Lesson number one. 

People, always remember that being the first mover can sometimes be a terrible thing and as far as my observation goes it's almost every time a terrible thing. And it's always better to be a second-mover so that you can build upon the mistakes made by the first-mover. In this case, if you see, iTunes built over Napster, Spotify built over iTunes, and Apple Music and YouTube music built over Spotify. So, if you're the first mover, you've got to be very careful and if you're the second mover you’ve got to be very happy, at the same time, very sharp about the mistakes that have been made by the first mover. 

Lesson number two 

companies might come and go but the behavioral design they leave behind will stay forever. In this case, it was the paradigm shift from CDs to streaming. So, while most people will neglect it and try to reverse it you as an entrepreneur can be an opportunist and can bring about a forward-looking solution rather than a backward-looking.

 In this case, the opportunist was none other than the legendary Steve Jobs himself who built upon the behavioral design left behind by Napster. And most importantly, always remember guys the culmination of technology and connectivity is always the sweet spot for innovation and it will give rise to the most revolutionary startups. In this case, it was the computers and the Internet but in the next 3 years, it's going to be the green tech and the Internet, blockchain and the Internet, and most importantly Artificial intelligence and the Internet. And this is where you can find your greatness to build an incredible company or as an investor find an uprising gem in the stock market.