IES744-PDF-ENG

IES744
SIN-55-E
June 2018
Basic Economic Models for the Digital Economy

Josep Valor Sabatier
Introduction
This short document introduces five fundamental concepts of the digital economy that will help
managers evaluate the possibilities, and dangers, of digital transformation. It does not aim to
replace a more in-depth analysis for each of the topics described. Such analysis can be
undertaken by following the references provided in different parts of the text.
The text is divided into sections. Each section introduces and develops a concept or business
model and finishes with one or two directly applicable lessons for the reader to remember as
well as a question for reflection at the top management and firm governance level.
Section 1: The Power of Platforms

On June 20, 2008, BlackBerry’s shares reached an all-time high of $144, and by all accounts the
company was in a very healthy position. It dominated the corporate mobile communications
market with an estimated share of more than 90% and enjoyed the confidence of most CIOs. In
fact, BlackBerry was a synonym of mobility and permanent communication among executives –
so much so that an “airport novel” had been written with the device as protagonist.1 By
December 5 of the same year, shares had plummeted from $144 to $39 and, 10 years later, they
linger at around $11.50. What happened in the last six months of 2008 that ended up wiping
out 90% of BlackBerry’s value?
There have been a number of explanations for this financial disaster, ranging from unattractively
designed phones to system crashes that left its users without a signal for several hours. These
factors may have contributed to the brand falling out of favor, but the fundamental reason was
something else: poor-quality applications. There was a dearth of applications with the wealth of
apps that could be found in Apple’s App Store and the Google Play store. BlackBerry did not
seem to understand the trend toward consumerization, which meant that, for a number of
years, executives carried two devices in their pockets – one being the BlackBerry and the other
1 Lucy Kellaway, “Martin Lukes: Who moved my Blackberry?”, Pinguin Books, 2006.
This technical note was prepared by Josep Valor Sabatier. June 2018.
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Last edited: 19/7/18
This document is authorized for use only in Santiago Bermudez's MND 2024 - MND01 - FUNDAMENTOS DE TECNOLOGÍA at Universidad de San Andres (UDESA) from Mar 2024 to Sep
2024.
SIN-55-E Basic Economic Models for the Digital Economy
probably an iPhone. When iPhones and Android devices could deal with e-mail and calendars as
well as BlackBerry devices, the decline was unavoidable.
One of the fundamental concepts that has to be understood in today’s economy is that, by and
large, customers do not value a smartphone for its inherent features but for the applications
that run on it. In fact, the smartphone ecosystem falls into the family of business models labeled
“platforms.” In its simplest form, a platform is an enabler that facilitates communications (and
business transactions) between two distinct populations and captures value by charging one or
both of these populations. This is not a new concept by any means. As long ago as 1985, the
operating system DOS provided value to its users not through its features – as it was quite
cumbersome and by any measure obsolete when compared with the competing Mac OS
introduced in 1984 – but through the wealth of applications that ran on DOS. And when DOS
had a market share of more than 80%, it attracted more developers and this further enhanced
the value of the platform compared to the Mac, forcing a number of Mac users to switch to DOS
so they could use these new applications. The phenomenon of a large “network” bringing
greater value to its participants than a smaller one to the point that small ones tend to disappear
has been conceptualized as “positive network externality”2 and is the subject of extensive
research in management and economics.3
When the iPhone was first introduced in the United States in 2007, it was not a good phone
compared to the existing market leaders: it was expensive and heavy, the battery life was poor,
it did not have a good camera and did not support the leading Microsoft Exchange e-mail system,
and it operated on a slow network (2.5G compared to the already existing 3G). Nevertheless, it
was an instantaneous success: it had a number of applications that allowed the user to surf the
Internet, access weather forecasts, follow the stock market, read news articles, and watch
YouTube videos. Google followed suit quite rapidly by releasing its Android operating system in
October 2008 and, since it offered its license for free, this prompted a flurry of handset
manufacturers to adopt Android and so they could compete with Apple’s iPhone.
Many of the successful businesses in the so-called new economy are platforms, such as eBay,
Facebook, Airbnb, Uber, TripAdvisor, and Amazon. Consider Airbnb, for example. The more
people who offer their rooms, the more useful the site is for travelers, and the more travelers
there are, the more attractive it is for room owners to list their rooms. Airbnb is more “useful”
than a smaller competitor would be. When positive network externalities enter play, large
platforms tend to become more useful for everyone and, under some circumstances,4 the
“winner takes all” and captures most of the value in the industry.
A schematic diagram of a two-sided platform like those described here can be seen in Figure 1
below. Often, one side of the platform is termed the complementor side, while the other is the
client side. In our iPhone example, developers would be complementors, while users would be
2 Positive network externalities are formally defined as the utility that members of a group (network) perceive as a function
of the number of members of that group, usually by the mere fact of being able to be connected with all other members.
Since a member of a network of “n” elements can connect to “n − 1” other members, the utility generated by a group of
“n” elements will be proportional to n × (n − 1). Roughly, this implies that if network A has 10 times more members than
network B, then network A is 100 times more useful.
3 For a comprehensive treatment of the subject, see Geoffrey G. Parker, Marshall W. Van Alstyne and Sangeet Paul
Choudary, Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work
for You, New York: W.W. Norton Company, 2016.
4 The strength of the externality is weakened and therefore a “winners take all” situation is unlikely when users,
complementors or both can operate in two platforms with ease, or there are possibilities of differentiation among different
platform operators.
2 IESE Business School-University of Navarra
2024.
Basic Economic Models for the Digital Economy SIN-55-E
clients. This nomenclature is somewhat deceptive as the platform operator has to cater to both
sides and, in a sense, developers are also clients of the operator that have to be sold on the idea
that it is in their interest to develop complements for the platform.
It is important to note that in the Android ecosystem, not only application developers are
complementors, handset manufacturers are complementors of the operating system as well.
Handset manufacturers compete among themselves to capture the attention of the users, in the
same way software developers do. This competitiveness explains why according to analysts in
the smartphone market Apple captures most of the value, up to 85%5: Apple is the sole vendor
of hardware for the iOS platform while all other hardware manufactures compete among
themselves on the Android platform.
Figure 1
Schematic diagram of a two-sided platform
Source: Prepared by the author.
One question that we could ask ourselves is where BlackBerry would be today if its parent
company RIM had ported its e-mail and calendar solution to the iOS and Android platforms as
soon as they appeared. Perhaps most companies would still be paying a monthly service for
Blackberry’s encryption and other highly reliable services. We will never know.
To conclude this section, we can state the following:
 Successful business models in the digital age tend to be platforms, such as Uber, Airbnb,
and Facebook.
 In a world of platforms, a large part of the perceived value is in the complementary
products, and platform operators have to make sure that enough companies or
individuals invest their time and money to make their platforms valuable to customers.
 In some circumstances, network externalities are so strong that large platforms become
the winners who take all, capturing most of the value in an industry.
52017 data available at: http://www.businessinsider.com/samsung-vs-apple-galaxy-iphone-smartphone-revenue-chart-

2017-2, last accessed June 2018.
IESE Business School-University of Navarra 3
2024.
 Questions for reflection: Can a platform-based business model disrupt your industry?
How would a platform business model impact your firm? Can you react? Can you benefit
from a platform?
Section 2: Low Transaction Costs Enable Long-Tail Business Models

Have you ever considered why newspapers have lost 70% of their advertising revenue since
2000? Figure 2 below shows the huge decline in advertising revenue of U.S. newspapers, for
which digital revenues have failed to compensate because unfortunately even today these are
quite minor.
Figure 2
Newspaper advertising’s absolute values and market share
Source: Mark J. Perry, “Creative Destruction: Newspaper Ad Revenue Source: “News Adventures,” The Economist, December 8,
Continued Its Precipitous Free Fall in 2014, and It’s Likely to Continue,” 2012,
Carpe Diem blog, AEI, April 30, 2015, https://www.economist.com/business/2012/12/08/news-
http://www.aei.org/publication/creative-destruction-newspaper-ad- adventures, last accessed June 2018.
revenue-continued-its-precipitous-free-fall-in-2014-and-its-likely-to-
continue/, last accessed June 2018.
During their peak years, according to the Newspaper Association of America (rebranded the
News Media Alliance in 2016), a large part of the advertising revenue of U.S. newspapers came
from classified advertising (33% in 2005), with up to 50% of the remaining revenue labeled
“local.” 6
Consider the inherent inefficiency of a newspaper to put someone who wants to sell a 10-year
old car with 200,000 miles on the clock in touch with a possible buyer. The seller would have to
call the paper, describe the car in a few words, wait for the paper to print the ad and be
distributed to kiosks, and then hope that someone interested would buy the paper, see the ad,
and call the seller to get additional information. Even if someone was interested in buying such
a car and bought the paper, the prospective buyer would have to find the ad, get an idea of the
car’s condition from a few words and then, for more information, call the phone number
provided and negotiate a closing price.
Compare this with a self-service web portal where the seller can upload pictures of the car and
a video explaining the virtues of the vehicle. The web portal can be searched with ease and can
6 See https://galbithink.org/advertising/newspaper-ad-trend.xls, last accessed June 2018.
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even run an auction to set an optimal price if this is deemed necessary. Moving the whole
business online is so much more efficient for everyone so it was only a matter of time that all
classified ads and most local location-based advertising, such as for restaurants and other
services, would move online. A newspaper was too inefficient for a “long-tail” business.7 The
graph in Figure 3 illustrates this concept.
If we rank all products advertised in a newspaper by their potential demand, it is clear that there
is a difference between the appeal of a high-volume consumer product and that of the
previously mentioned 10-year-old car with 200,000 miles on the clock. The latter is a long-tail
product and, as far as advertising is concerned, its sales margin cannot withstand the cost of
advertising the car in a newspaper many times. From the point of view of the advertising
platform, whether this is a newspaper or website, the relevant issue is not how much a single
advertiser pays but how much all the advertisers together pay. If the margin of a classified ad in
a newspaper was measured in dollars, it was hard for a newspaper in 2000 to switch this business
to the Internet, where the margin was measured in cents. However, the industry has grown big
enough to compensate for this difference, and classified-ad companies – with ads going from
jobs to used cars and real estate – are doing quite well.
Figure 3
The long tail
The Internet has made a number of these long-tail businesses possible. In fact, some of the
platforms mentioned in the previous section have a long-tail component as well. Think again of
Airbnb: renting apartments and rooms for short periods – even a single day – has been around
for a long time but the cost of finding a renter for one night made business unfeasible for one-
room “companies.” Hotels and hostels lowered search costs by bundling many rooms together
in a single establishment or chain. For hotel operators, a single ad could bring a number of guests
to the same place. Today, the Internet has made it possible for people with only one room for
rent to find guests from across the world for one night at a very low search cost.
The economic basis of this phenomenon is the extraordinary decrease in transaction costs.
These costs, inherent in the closure of any transaction, have been studied in economics for many
7Chris Anderson popularized the concept of the “long tail” in his 2006 book The Long Tail: Why the Future of Business Is
Selling Less of More (New York: Hyperion).
2024.
years, with the first reference dating back to 1931.8 Ronald Coase expanded on the concept in
the landmark article “The Nature of the Firm,”9 which maintained that, in the face of high
transaction costs, companies were more efficient for some trades than markets. The concept
was definitively popularized by the Nobel laureate Oliver Williamson.10
There are three broad categories of transaction costs: (1) search and information costs, (2)
bargaining costs, and (3) policing and enforcement costs. It should be clear by now that most of
the disruptions caused by digitization stem from this drop in transaction costs. Searching for a
product or service and negotiating the price on the Internet are very cheap, and so are checking
and ensuring quality in a transparent market via ratings and other mechanisms. Also, when
transaction costs drop to basically zero, business models based on crowdsourcing become
feasible.
 Digital technologies significantly lower transaction costs and make long-tail business
models possible
 Newspapers, like many information businesses, connect providers of information
(advertisers in this case) with clients very inefficiently, and will have grave problems
when technology drives search costs to zero.
 A client who has specific needs will look for a product that satisfies these needs and buy
it if such a product exists, rather than buying a generic one.
 Question for reflection: Is your firm prepared to serve long-tail markets?
Section 3: Value Must Be Captured When It Is Created

If any industry has been shaken by digital technologies, it is the music industry. The music
industry was in continuous decline from 1999 and the creation of Napster, the first sharing
platform specializing in MP3 files, to 2016.11 Even though Napster was besieged by legal troubles
and lawsuits by individual artists and record labels and then ceased operations two years later,
a new generation of peer-to-peer (P2P) sites appeared that decimated sales of recorded music.
Interestingly enough, it is not obvious that people do not spend as much money today on music
as they did in 1999. Money has simply shifted from one part of the “music ecosystem” to
another, impacting directly on the revenues and profits of the music industry’s different
components.
In 2000, according to the Recording Industry Association of America (RIAA), the retail value of
music shipments in the United States, net of returns, was valued at $14.32 billion, while concert
revenues amounted to $1.5 billion. Therefore, the industry made an estimated total of
$15.82 billion, 90% of it directly pocketed by record companies. For 2017, the RIAA released the
8The first recorded mention of the concept appears in a paper by John R. Commons (1931), “Institutional Economics,”
American Economic Review, Vol. 21: 648-657.
9 See Ronald Coase (1937). “The Nature of the Firm“. Economica. Blackwell Publishing. 4 (16): 386–405.
10 See Oliver E. Williamson (1981). “The Economics of Organization: The Transaction Cost Approach.” The American Journal
of Sociology. 87(3): 548–577.
11 See https://www.riaa.com/reportcat/piracy-impact/ for data and analyses about the impact of piracy on the industry by
the Recording Industry Association of America, last accessed June 2018.
2024.
following data: shipments by record labels (physical and digital) $8.7 billion, streaming
$5.7 billion, and concerts $7.7 billion, for a total of $22.1 billion. Adjusting for inflation, the
$15.82 billion of 2000 amounts to $22.14 billion in 2017 dollars, roughly the same amount that
was spent on music in 2017. The big difference is that income from concerts jumped from
$1.5 billion in 2000 ($2.1 billion in 2017 dollars) to a staggering $7.7 billion, more than 3.5 times
the previous amount in constant dollars. This money has shifted from the pockets of record
labels to those of concert promoters and artists. In general, artists fare a lot better today than
in 2000. They receive an estimated 50% of concert revenues while they get around 10% of
record sales and streaming in the form of royalties. In 2000, artists made $3 billion in 2017
dollars but in 2017 this number had jumped to $5.29 billion. In short, even though people were
spending the same amount of money on music in 2017 as they did in 2000, more than $2 billion
had shifted from record labels to artists. Table 1 shows the numbers for each year side by side.
Table 1
Breakdown of the U.S. music industry’s revenue (in billions of dollars)
Year 2000 Year 2000 in 2017 $ Year 2017

Shipments (physical and digital) $14.32 $20.04 $8.7
Streaming — — $5.7
Live concerts $1.50 $2.10 $7.7
Total $15.82 $22.14 $22.1
Estimated revenue to artists
$2.18 $3.05 $5.29
(10% shipments and streaming + 50% live)
An interesting lesson can be learned from this example. Let us examine the tasks that a record
label used to perform at the high point of CD sales: (1) discovering new artists and (2) screening
for market potential, the main job of the artists and repertoire (A&R) manager, (3) looking for
composers and lyric writers who would maximize the artist’s potential, (4) managing the
recording in studios, (5) editing and selecting the tracks that would go on an album, (6)
manufacturing, packaging, and distributing the CDs and (7) promoting the artist. After all these
tasks, if the CD sold well, the record label would make money and recover its investment. Except
for manufacturing, packaging and distributing the physical CDs, all other tasks had the same
beneficiary, the artist. Undoubtedly, the record label added value to the “music ecosystem” by
performing these tasks but did not capture it until the CD was sold.
To minimize the risk of being unbundled, it is important to capture value as close as possible to
the moment the value is added. A similar “shock” hit stockbrokers and wealth managers in the
late 1990s. Before the appearance of online brokers who charged less than $10 per trade with
no advice, established brokers used to provide free advice and charge more than $100 per trade.
Clearly, this business model was not sustainable and full-service companies had to change it:
they charged for the advice, the value-adding step, and dramatically lowered what they charged
for the trade, even giving it for free in some circumstances.12 There is also a market-signaling
lesson in this stockbroking example: by giving free advice and charging for the trade, brokers
seemed to assign value to the trade rather than the advice.
12For details and anecdotes about the industry at the time, see Robert A. Burgelman, Margot Sutherland and Kelly Dubois,
“Charles Schwab & Co. Inc. (A): In 1999,” Harvard Business School case study, 2000.
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 Since digital technologies increase the danger of being unbundled, it is essential that
companies try to capture value when it appears in the system. If your company gets
unbundled and loses control of its value-capturing activities, it runs the risk of going out
of business.
 Question for reflection: What can your company do to capture value in a more timely
and efficient manner – that is, as soon as the value is produced?
Section 4: Be Careful of Envelopment Strategies

This is a very simple concept. Let us imagine an extreme case: company A sells a single product
or service, and it so happens that all its clients are also clients of company B. Imagine that
company B can produce the same product or service as company A at a marginal cost because
the product or service shares some infrastructure production capacity with other products in
company B’s portfolio. In this situation, company B can move into the market of company A and
charge lower prices as it does not have to recover all of its fixed costs from the sale of a single
product, and it can end up driving company A out of the market.
This situation is not that exceptional if we relax the assumption that all clients of A are also clients
of B and we limit ourselves to no more than a sizable proportion of A’s clients. Take Snapchat
and Instagram Stories. Snapchat offered a number of social-media innovations, which enticed a
large number of people to open an account and use the platform. Many Snapchat users probably
also had a Facebook or Instagram account, even it was only to keep their parents happy and
pretend that they were in touch with them via social media. Facebook saw Snapchat as a danger
and launched a copycat version of it as a supplement to Instagram: Instagram Stories.
2024.
Figure 4
Daily active users of Snapchat vs. Instagram Stories and Snapchat growth
Source: Kurt Wagner and Rani Molla, “Instagram Stories Is Still Growing Quickly and Now Has 250 Million Users,” recode,
June 20, 2017, https://www.recode.net/2017/6/20/15836248/instagram-stories-250-million-users-snapchat, accessed
June 2018, based on company data; graph on the right prepared by the author.
Figure 4 shows the evolution of daily active users of each system and the growth of Snapchat.
Figure 5 shows Snapchat’s usefulness in the eyes of advertising professionals: social media
marketers do not use the platform much compared to both Facebook and its Instagram service.
When Instagram launched Stories in August 2016, Snapchat’s growth rate diminished
considerably and the absolute number of its daily users has already been surpassed by Instagram
Stories. Every innovation that Snapchat introduces to its platform is copied easily by Instagram
Stories, making it quite difficult for Snapchat to monetize its traffic, especially when the
Facebook/Instagram giant can leverage its engineering and sales forces to keep up to date
quickly in terms of technology and to reach the advertising market more efficiently.
2024.
Figure 5
What marketers use when advertising on social media
Source: Felix Richter, “Marketers Have Yet to Embrace Snapchat,” Statista, May 24, 2018,
https://www.statista.com/chart/9800/social-media-platforms-used-by-marketers/, accessed June 2018.
A similar situation may occur with Spotify compared to Apple Music and Amazon Prime. We can
only guess how many Spotify Premium customers are also paying customers of either Apple’s
iTunes, Amazon Prime, or both. It is likely that a large percentage of them are, so it is easy to
imagine that iTunes and Amazon Prime can sell the same music as Spotify while operating at a
much lower cost and therefore they can sell the same music more cheaply. It is also easy to
imagine that such a situation would render Spotify’s business model unviable unless the
company manages to come up with services and/or content that Apple and Amazon cannot
replicate.
Therefore, the following conclusion can be reached:
 When a company with a limited product line shares its customers with another company
that can produce the first company’s products at marginal cost, the first company can
be attacked and be displaced from the market with an aggressive envelopment strategy.
 Question for reflection: What companies share customers with you and could enter your
field of business and, benefiting from spreading their fixed costs, undercut your prices?
Could you do the same in another sector? Can you profitably envelop another company?
Section 5: Do Not Lose Track of Your Client’s Real Objectives

In 2004, the video rental industry in the United States was dominated by one name: Blockbuster.
The company had more than 8,000 stores across the country, located in highly trafficked areas,
with each store having several copies of the most popular movie titles of the moment. The
business model was quite simple: users would pick up a rental DVD at the store and pay a fixed
amount, and they would have to pay a late fee if they failed to return the DVD by the due date.
Although these penalties were a source of much dissatisfaction among customers, they were
essential for the company to be able to operate with a feasible number of copies of the most
2024.
popular titles, and the late fees also accounted for an estimated 20% of profits and so had a
direct impact on the bottom line.
By that time, Netflix, a small company that started operations in 1998, had a different business
model. Users would set up an account on the company website, where they would examine the
available titles and they would make a list of the movies they wanted to see. A customer would
pay a monthly fee to the company, which would send by mail the first two DVDs on the
customer’s list. Customers would return a DVD by mail using a prepaid envelope provided. When
it received a DVD being returned, the company would send the next item in the customer’s list
within 24 hours. Users would always have one or two DVDs at home and they could keep the
DVDs for as long as they wanted, with no penalties applied.
The new model grew quite rapidly, and therefore it needed cash to grow. Several times in 2000,
Netflix offered to sell to Blockbuster for $50 million, an offer that was declined every time. After
a few years, the rent-by-mail model superseded the go-to-the-store model in popularity, and
Blockbuster’s sales started to shrink. In response, in 2007 Blockbuster replaced John F. Antioco
as CEO by hiring James W. Keyes, a former CEO of the 7-Eleven convenience-store chain, in an
effort to refocus and enhance the retail experience. Blockbuster filed for bankruptcy in 2008.
(Figure 6 shows how the revenue of both companies evolved.) This, of course, was well before
the incredible rise of streaming services, which were very limited and unreliable at that time.
Figure 6
Blockbuster and Netflix revenues, 2004-2010
Source: Robbie Allan, “How Mobile Is Disrupting Retail,” Carnival.io, http://carnival.io/mobile-insights/mobile-is-disrupting-

retail-internet-trends/, last accessed June 2018.
How could Blockbuster focus its business mode on retail stores so much that it overlooked what
its customers really wanted, which was to watch movies at home? Misalignment between what
customers want and a company’s assets is not rare, particularly when a form of technology
appears that allow the client’s needs to be catered for by using a completely different set of
assets. Theodore Levitt, of Harvard Business School, is quoted as saying: “People do not want to
2024.
buy a quarter-inch drill – they want a quarter-inch hole.”13 This reasoning has evolved thanks to
the contributions of various people, most notably Clayton Christensen, author of The Innovator’s
Dilemma.14 In the same line as Levitt, Christensen said: “Customers don’t just buy products and
services – they ‘hire’ them for a ‘job’.” What Blockbuster seemed to miss was that the job that
the customer wanted done was to watch a movie at home and that the rest of the process – the
greeting of customers, making it easy to navigate the aisles, and everything else in the store –
was irrelevant. Even removing the late fees did not help at all. Instead, it reduced the bottom
line by 20% and aggravated those customers who could not find popular movies at the store
because other customers had not returned their copies.15
Netflix understood quite well the jobs that the customer wanted done, so much so that, even
when it started to experiment and commit itself to streaming, it was still investing in
classification centers for its rent-by-mail service.
 We must understand the “jobs to be done” as desired by the customer and always try
to ease the pain associated with these jobs and, if possible, increase the related gain.
 Digital technologies offer new and wide-ranging possibilities to be creative in terms of
both these objectives.
 Question for reflection: Does you company have processes in place to study
systematically your customers’ “jobs to be done” and scan the environment for possible
disruptive ways of reducing their pain and increasing their gain?
13 There seems to be that the professor said this many times to his students. The concept, using different words, was
introduced by Levitt in the paper “Marketing Myopia” published in 1960 (Harvard Business Review 38, no. 4: 45–56).
14 The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press. (1st edition
1997).
15 A comprehensive discussion of the jobs-to-done concept can be found in the e-book Jobs to Be Done: Theory to Practice
by Anthony W. Ulwick, which can be downloaded for free at https://jobs-to-be-done-book.com.
2024.

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Basic Economic Models for the Digital Economy

Section 1: The Power of Platforms

Last edited: 19/7/18

2 IESE Business School-University of Navarra

Source: Prepared by the author.

52017 data available at: http://www.businessinsider.com/samsung-vs-apple-galaxy-iphone-smartphone-revenue-chart-

IESE Business School-University of Navarra 3

Section 2: Low Transaction Costs Enable Long-Tail Business Models

4 IESE Business School-University of Navarra

Source: Prepared by the author.

IESE Business School-University of Navarra 5

Section 3: Value Must Be Captured When It Is Created

the Recording Industry Association of America, last accessed June 2018.

6 IESE Business School-University of Navarra

Year 2000 Year 2000 in 2017 $ Year 2017

Source: Prepared by the author.

IESE Business School-University of Navarra 7

To conclude this section, we can state the following:

Section 4: Be Careful of Envelopment Strategies

8 IESE Business School-University of Navarra

Source: Prepared by the author.

IESE Business School-University of Navarra 9

Section 5: Do Not Lose Track of Your Client’s Real Objectives

10 IESE Business School-University of Navarra

Source: Robbie Allan, “How Mobile Is Disrupting Retail,” Carnival.io, http://carnival.io/mobile-insights/mobile-is-disrupting-

IESE Business School-University of Navarra 11

by Anthony W. Ulwick, which can be downloaded for free at https://jobs-to-be-done-book.com.

12 IESE Business School-University of Navarra

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