Value Creation: Understanding Modularity

As entrepreneurs,  we are quite familiar with the importance of creating value for their audience. However, we often miss out on attractive opportunities that could increase growth. While value can be offered via several forms, value creation via 'Core Products' is a common approach. Revenue models that one can pursue around a core product generally seem to be:
                                                                1. Flat Fee
                                                                2. Subscription
                                                                3. Advertising

However,  business owners fail to explore opportunities that could increase their revenue while offering even MORE value! This can be done by experimenting with Modularity.

Instead of pursuing a singular focus, we break down potential value offerings into components.  We can then start playing Lego's with these components to offer value and generate revenue via multiple streams. For example, Costco offers quality & low prices on groceries for an annual subscription fee. But by drawing customers into their store, they now have a new value offering: Audience Aggregation. Which they then use to sell advertising,  insurance and even roadside assistance!

TripAdvisor offers value via trusted reviews using a Freemium revenue model. But then uses Audience Aggregation to sell Subscriptions to hotels and booking agencies. Furthermore, they sell advertising to various firms.

The truth is, Modularity  models exists all around us (think Cinemas!). We tend to miss it because it blends so seamlessly into our lives. As you grow your business, consider the various 'Lego' pieces you can fit/rearrange into your business model. The growth potential can be stupendous!

Further Readings:

Research Gate:  Modularity  in Creating Value for Diversified Customer Needs

Harvard Business School : Modularity for Value Appropriation​

About the author

Shawn Dexter

Shawn Dexter is a Product Manager, Entrepreneur & Software Developer. He is passionate about innovation management & technology.

2 comments
rama

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AAU

AAU Started providing academic services in 1990, Al-Ahliyya Amman University (AAU) was the first private university and pioneer of private education in Jordan. AAU has been accorded institutional and programmatic accreditation. It is a member of the International Association of Universities, Federation of the Universities of the Islamic World, Union of Arab Universities and Association of Arab Private Institutions of Higher Education. AAU always seeks distinction by upgrading learning outcomes through the adoption of methods and strategies that depend on a system of quality control and effective follow-up at all its faculties, departments, centers and administrative units. The overall aim is to become a flagship university not only at the Hashemite Kingdom of Jordan level but also at the Arab World level. In this vein, AAU has adopted Information Technology as an essential ingredient in its activities, especially e-learning, and it has incorporated it in its educational processes in all fields of specialization to become the first such university to do so.
https://www.ammanu.edu.jo/

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