Hybrid business

From CEOpedia | Management online
Revision as of 12:22, 21 February 2023 by Sw (talk | contribs) (Article improvement)
Hybrid business
See also

Hybrid business - means a company that not only uses traditional forms of distribution, but also uses the internet to sell, to easily expand its operations and to make a product or service more accessible to consumers. One of the positive features of running such a business increases the convenience of the consumer in terms of concluding transactions. By doing so, he is not obliged to travel far away because he makes an online payment and the product is delivered by a courier. This kind of business became very popular very quickly. This resulted, among other things, from the possibility of intensifying sales volumes in the network. Through this small family business, they were able to reach national or international consumers interested in purchasing their goods.

Traditional business vs. online business

Traditional form of conducting business is based on the fact that the entrepreneur uses it in communication with the market and consumers:

  • Posters;
  • Leaflets;
  • Animators accosting passers-by in the streets;
  • Publishing products in catalogues and placing orders by post.

Moreover, given entrepreneurs do not use computer software to develop sales strategies. Most calculations are made using a sheet of paper and a calculator. Moreover, accounting is conducted in the traditional form with the use of books than special ERM software supporting business management [1].

This is not the case with online business, which mostly uses the Internet. Sales are carried out using dedicated online shops, which are promoted, among other things, by specialized search engines. In addition, such entrepreneurs use social networking sites, which also provide them with promotional opportunities. Online business also allows you to optimize your sales network by using specialized software. Moreover, the persons responsible for running this kind of business are able to accelerate the process of sales modeling or accounting thanks to new technologies[2].

However, it is not always correct to run only one business. Well, combining the traditional form allows you to build real relationships and presents business as real. On-line business, on the other hand, streamlines the sales process and broadens the sales markets of a given entrepreneur. Therefore, it is important that most companies use the hybrid model combining the characteristics of the above described businesses[3]. Nevertheless, it is essential for these businesses to coexist as a join venture entities for the reason of achieving an economical increase in revenues.

Hybrid business cons

On the one hand, the entrepreneur must optimize sales in order to promote the online shop and on the other hand, he must control the maintenance of the stationary shop or the hiring of employees. In addition, one of the last key problems is the creation of concentration dilemmas. By not being able to assess the efficiencies of a particular shop (due to their hybrid combination), the trader is obliged to carry out these two activities, and forgoing either of them may have negative effects on the trader.

Examples of Hybrid business

  • Amazon: The e-commerce giant Amazon is undoubtedly the most notable example of a hybrid business. The company began as an online book retailer but has since grown to become a retail powerhouse that offers a wide range of products, from consumer electronics to apparel. Amazon has been able to expand its business by leveraging its online presence to expand into more traditional brick-and-mortar establishments. Amazon now has physical stores in many locations, and it also has a network of distribution centers and warehouses that allow it to quickly ship products to customers.
  • Starbucks: Starbucks is another example of a hybrid business. The company began as a small, Seattle-based coffee shop but quickly grew to become an international coffee chain. Starbucks leveraged its online presence to expand its reach and now has thousands of stores around the world. In addition to its physical stores, Starbucks also has an online presence, allowing customers to order drinks, food, and merchandise online.
  • Warby Parker: Warby Parker is a New York City-based online retailer of affordable prescription eyewear. The company started as an online business, but it has since expanded to include physical stores in several cities. The stores offer customers the opportunity to try on frames, while the online store lets customers order frames and lenses that are then shipped directly to them. Warby Parker has been able to use its hybrid business model to make prescription eyewear more accessible and affordable for consumers.

Advantages of Hybrid business

One of the advantages of running a hybrid business is the ability to reach a much wider audience than traditional businesses. Here are some more benefits to consider:

  • Hybrid businesses have the potential to increase their sales volume by utilizing the internet to market and distribute their products to a global audience. This means that they are able to reach a much larger customer base than if they were limited to only local customers.
  • Additionally, hybrid businesses can take advantage of the lower overhead costs associated with running an online business. This allows them to save money on traditional costs such as rent, utilities, and staffing.
  • Hybrid businesses also have the potential to increase their profits due to the increased accessibility of their products and services. By making their products available online, they can reach customers who may not have been able to access them through traditional stores.
  • Furthermore, hybrid businesses can benefit from the ease of use that comes with online transactions. Customers can easily make purchases without the hassle of physical stores or standing in line.
  • Finally, hybrid businesses can benefit from the convenience of having a direct connection to their customers through social media, email, and SMS. This provides them with the opportunity to build relationships with customers and increase customer loyalty.

Limitations of Hybrid business

  • One of the main limitations of hybrid businesses is the cost of setting up a successful online presence. Setting up an online store requires an investment in the form of web hosting, online payment processing, website design, and marketing. These costs can add up quickly, making it difficult for small businesses to achieve profitability.
  • Additionally, hybrid businesses must also invest in physical infrastructure such as a warehouse, retail space, and staff to manage both the online and offline activities. This can lead to significant costs for small businesses that may not have the capital to invest in such infrastructure.
  • Another limitation of hybrid businesses is the complexity of managing both online and offline operations. This requires a significant investment in personnel, as well as specialized software and systems to manage both operations. This can be a costly endeavor, and may be difficult for small businesses to manage.
  • Finally, hybrid businesses are also limited by consumer trust. Many consumers are hesitant to purchase products online, which can lead to lower sales for hybrid businesses. Additionally, customers may be hesitant to provide personal information or payment details online, which can also limit sales and revenue.

Other approaches related to Hybrid business

One approach to hybrid business is to combine online and offline selling strategies. This includes using online advertising, social media, and other digital marketing tools to create a presence, as well as using physical retail store locations to sell products. By having both online and offline stores, the business can reach a much wider audience and improve customer service. Additionally, hybrid businesses can take advantage of the lower overhead costs associated with digital marketing and take advantage of the physical presence of in-store locations.

Other approaches to hybrid business include:

  • Building an eCommerce website to facilitate online sales - This approach allows businesses to reach customers around the world with just a few clicks. With the right setup, businesses can build an efficient and secure platform to take orders, process payments, and facilitate shipping.
  • Leveraging mobile technology - Mobile technology has become an essential part of customer experience. Businesses can use mobile apps to provide customers with information, product details, and even loyalty rewards.
  • Utilizing customer data - With the help of analytics, businesses can collect and analyze customer data to understand customer behavior and preferences. This allows them to personalize their products and services according to customer needs.
  • Creating an omnichannel experience - Businesses can create a unified experience across all channels to provide customers with a consistent and seamless experience. This includes having the same product catalog, pricing, and customer service across all channels.

In summary, hybrid businesses have a wide range of approaches available to them. These approaches include building an eCommerce website, leveraging mobile technology, using customer data, and creating an omnichannel experience. By utilizing these strategies, businesses can reach a wider audience and provide a better customer experience.

References

Footnotes

  1. ↑ Ch. Baden-Fuller, S. Haefliger 2013, p. 419-426
  2. ↑ C. DiRienzo, G. Lilly 2014, p. 3-7
  3. ↑ N. Haigh, A. J. Hoffman 2011, p. 4-14

Author: Weronika Brach

Retrieved from "https://ceopedia.org/index.php?title=Hybrid_business&oldid=75374"