![]() Deliveries could be in amounts large enough for several meals in a given week. The restaurant could send a link to a video that walks the customer through preparation, thus incorporating an experiential and learning element. Another pivot would be to offer a combination of precooked dishes with sides or additions that could be prepared at home using ingredients supplied by the restaurant. Restaurants could increase their margins as they learned how to manage captive demand. One pivot would be to offer a flat rate for a set number of meals per week or per month, with limited menu choices. Eat-in, take-out, delivery, and catering are just the tip of the iceberg. However, restaurants are kitchens whose output can be delivered to customers in a number of ways and using various kinds of business models. ![]() The usual way to think about restaurants includes envisioning a seating area next to a kitchen. They have been battered by the lockdown, with many owners pondering whether to close for good. Pivoting definitely works for digital platforms, but does it help traditional businesses? Let’s examine the world of restaurants. At long last, the company is doubling down on Netflix’s not-so-secret recipe for success in a business in which copyright owners enjoy healthy margins while pure-play streamers struggle to become profitable. The shift in strategy means that Spotify could become more of a tastemaker. The platform saw artists and users upload more than 150,000 podcasts in just one month, and it has signed exclusive podcast deals with celebrities and started to curate playlists. One pivot Spotify made in response was to offer original content, in the form of podcasts. Although the model was already showing some signs of maturity, its limitations did not become readily apparent until the pandemic hit and advertisers cut their budgets. Before the pandemic, the company figured that advertising revenue would grow even faster than the free user base, thus making a key contribution to the bottom line. Further ReadingĪnd yet the Swedish company struggled to find a pivot that would enable it to overcome a basic issue: Unlike Apple Music, Spotify disproportionately relies on free users who must listen to advertisements. ![]() In principle, this type of platform has all the ingredients for success in the lockdown economy: customers trapped in their homes who would like to escape from a depressing reality by listening to songs seamlessly streamed to a playback device without any need for physical distribution. Pivoting is a lateral move that creates enough value for the customer and the firm to share.Ĭonsider Spotify, the global leader in music streaming. The reality of how companies are dealing with the crisis and preparing for the recovery tells a very different story, one of pivoting to business models conducive to short-term survival along with long-term resilience and growth. Accordingly, the recipe for survival is supposed to be a thorough transformation of the entire company - or else a bankruptcy filing. On the basis of sweeping proclamations about “the end of commuting,” “the demise of retail,” and “the collapse of globalization,” many executives have come to assume that everything will change. Our very way of life is also said to be threatened. The nearly instantaneous economic recession triggered by the Covid-19 shutdown has wreaked havoc on businesses large and small. To get all of HBR’s content delivered to your inbox, sign up for the Daily Alert newsletter. In these difficult times, we’ve made a number of our coronavirus articles free for all readers.
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