Development process
A company needs not stay still, there are internal drives for the company to change its’ offering - for example found bugs by developers, admins, qa or internal users. These need to be fixed or accepted as a risk of course.
There are also external changes, such as changes in browsers for example or found bugs by external users. Very few people are using the old version of the Internet Explorer for example. A company will need to make a decision about what is supported and what is not. Some of the bugs may be accepted, and a company will decide that it will lose revenue by the users for example that use old versions of browser software. But the company may decide to fix an important security issue for example, because it ruins the company reputation, as a reliable vendor to deal with.
Another example is becoming obsolete. When the products or services are no longer needed. It’s time to rethink a business model. For example vinyl records got replaced by cassette tapes. Even though vinyl records offered superior quality of sound, not many people needed it. Cars were made with the tape players, it was possible to find cassette players in the stores, the whole industry was there. Very soon vinyl records became instinct but the tapes remained.
Who cares if the tape does not have the same quality of audio as a record? Only audiophiles would, perhaps they would not listen to a record in their car. But the majority of people would. It was possible to store multiple tapes in a car, but it was not possible with the records. There are noises from the road and other cars as well.
Tapes got replaced by mp3 players. Some people would argue that compression of audio makes it bad to listen, but who cares if it’s in a car, where there is a lot of noise anyway. People, at least in the US, spend a lot of time in their cars, they have to drive long distances, and the convenience of switching tapes and later mp3s made a lot more sense, than vinyl or tape records.
Subscription, at least in the US, made a lot of sense when it was introduced. A person does not need to pay per album, but he would pay monthly instead. He or she would have access to the entire collection of music, instead of what is stored in the mp3 player. When the payments stop, so does the service. This is a business model in a nutshell. A person would have access to many songs and music, when he or she is paying for the service. But that person would not have access, when the payments have stopped.
Records, tapes, mp3 and later subscription made a lot of sense for listening to music. Are there threats to the business you own or participate in now? Are there threats that you may be replaced, what are they? What can you do to change the course of becoming obsolete and not needed? The last one is a personal question, and only you, as a reader of it, should answer this one. What needs to be done not to be obsolete?
Key Terms Glossary
Obsolete: No longer produced or used; out of date.
Business Model: The plan for how a company creates, delivers, and captures value. This includes the products or services offered, the target market, the value proposition, the revenue model, and the key resources and activities.
Value Proposition: A statement that summarizes the benefits a customer receives from a product or service.
Revenue Model: The specific way a business earns revenue. This could be through subscriptions, advertising, direct sales, or other methods.
Market Disruption: A significant shift in a market caused by innovation, changing customer needs, or other external forces.
Competitive Advantage: A factor that allows a company to outperform its competitors. This could be based on price, quality, innovation, customer service, or other factors.
Innovation: The introduction of new products, processes, or ideas.
Short-Answer Quiz
Instructions: Answer each question in 2-3 sentences.
What are two examples of internal drivers for change within a company?
How does the concept of "accepted risk" apply to software development and maintenance?
Explain how changing technology can lead to a product or service becoming obsolete.
Why did cassette tapes succeed in the market despite offering lower sound quality than vinyl records?
What advantages did MP3 players offer over cassette tapes for consumers?
What is the core principle behind the subscription model for music streaming services?
How do external factors like changes in user behavior influence business decisions?
What is the connection between a company's reputation and its approach to addressing security issues?
Briefly describe the concept of "market disruption."
What is the significance of recognizing potential threats to a business's current operations?
Answer Key
Two examples of internal drivers for change within a company include bugs found by internal teams (developers, QA, etc.) that need to be fixed, and internal initiatives to improve or update existing products or services.
"Accepted risk" in software development acknowledges that addressing every bug might not be feasible due to time or resource constraints. Companies weigh the potential impact of a bug against the cost of fixing it, sometimes accepting minor bugs as risks.
As technology evolves, older products or services often become incompatible with new standards or lose functionality. The shift to online streaming, for example, has made physical music formats largely obsolete for many consumers.
Cassette tapes succeeded despite lower sound quality due to their convenience. They were portable, easy to store, and compatible with car audio systems, aligning with the lifestyle needs of many consumers.
MP3 players offered even greater portability and storage capacity than cassette tapes. They allowed users to create customized playlists and easily transfer music files, enhancing convenience and control over their listening experience.
The subscription model grants access to a vast library of music for a recurring fee. Users pay for ongoing access rather than owning individual songs or albums. This model provides convenience and affordability but requires continuous payment to maintain access.
Shifts in user behavior, such as embracing new technologies or changing preferences, force businesses to adapt. Companies must analyze these trends to remain relevant and avoid becoming obsolete. For example, the rise of mobile devices led many businesses to prioritize mobile-friendly websites and apps.
A company's reputation, especially in technology, is closely tied to its handling of security issues. Failure to address critical vulnerabilities can damage customer trust and brand image, leading to financial losses and reputational harm.
Market disruption occurs when a new innovation, technology, or business model significantly alters an existing market. It often displaces incumbent companies and creates new opportunities for those who adapt quickly. Examples include the rise of e-commerce and the impact of smartphones on the telecommunications industry.
Recognizing potential threats to a business is crucial for long-term survival. Identifying emerging technologies, changing consumer needs, and competitive pressures allows companies to adapt proactively, innovate, and avoid becoming obsolete.
Essay Questions
Analyze the factors that contribute to a product or service becoming obsolete. Discuss how companies can anticipate and adapt to these changes to remain competitive.
Explain the concept of a business model and its key components. Use examples from the text to illustrate how different business models have evolved in the music industry over time.
Discuss the role of innovation in driving market disruption. Analyze how companies can foster a culture of innovation to stay ahead of changing market dynamics.
Evaluate the advantages and disadvantages of the subscription model for both businesses and consumers. Provide examples to support your analysis.
Reflect on the concluding question from the excerpt: "What needs to be done not to be obsolete?" Discuss this question in the context of your own career aspirations and the skills and knowledge needed to thrive in a rapidly changing world.
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