It’s not ideal, but it’s a reality—some businesses hit a point of no return. Their core products are no longer relevant, the wave they’re riding has crashed, or their demographic’s needs have shifted. While some businesses throw in the towel, others explore entirely new business models.
The brands below slightly repositioned themselves, drastically expanded their services, or underwent full-on product, service, and demographic shifts.
When Is It Time To Consider a New Business Model?
Repositioning your brand or exploring a complete business model shift is not something to be taken lightly. It’s most often a last-ditch effort when the alternative is closing your doors. Sometimes, it’s a strategic way to evolve and build upon what you already offer. The key to success is transitioning while you still have enough capital coming in to make a major shift.
The most common reasons to consider a new business model include:
- A rapid (or gradual but steady) downward trend in sales.
- Your demographic’s needs have drastically evolved.
- You aren’t successfully capturing the next generation.
- New technology has garnered your products obsolete.
- Major industry shifts leave you struggling to compete.
- One or more competitors are dominating market share.
- A pivot is required in response to negative brand identity.
Now, let’s take a look at 7 brands that have successfully rebranded or repositioned to serve a new demographic.
It’s a faint memory for many, but Amazon launched in 1995 as the “Earth’s Biggest Bookstore”. They sold new and used physical books. At the time, online shopping was in its infancy. Slowly but surely, Amazon began selling goods from other vendors. At the time, eBay was their primary competitor.
Today, Amazon dominates the global e-commerce market. In addition to allowing sellers to sell their products, the company has an increasing range of branded products, global manufacturing plants, and countless shipping facilities. They continue branching into new markets, now selling groceries, prescriptions, electronics, and the Kindle/Amazon Fire.
This $990 billion company has transformed how we shop, and is competition for countless industries and brick-and-mortar stores around the world.
Today Play-Doh is a household name children’s modeling clay with a variety of art and craft accessories. However, their clay was initially launched in the 1930s as a household cleaner designed to remove coal residue from wallpaper. As oil and gas heat grew in popularity in the 1950s, Play-Doh’s business took a drastic decline.
After hearing about a Cincinnati teacher that was using their clay cleaner for arts and crafts, they rebranded. They began creating colorful options for kids. In 1991 Hasbro bought Play-Doh. To date, they have sold over 2 billion jars of clay.
At the height of the mobile and online gaming boom, a company called Tiny Speck created a computer game called Glitch. Glitch was ultimately a failure, but there was a feature in the game that gamers loved—their colorful instant chat feature.
Realizing an opportunity to reposition themselves, Glitch shut down and the team got to work on an instant messaging tool—utilizing Glitch’s instant chat. Today, Slack is a multifunctional collaboration tool that empowers mobile, real-time, and multi-channel communications. Slack was such as success that they were bought out by Salesforce.
When BlackBerry launched in the 80s, it was a simple two-way pager. In 1999, BlackBerry introduced mobile phones with a keyboard. The ease and speed of typing on the QWERTY keyboard transformed the mobile communications industry. BlackBerry quickly dominated the mobile phone market, allowing users to respond to emails on the go.
Then Apple, Samsung, and LG released touchscreen phones. BlackBerry launched its own touchscreen product but couldn’t keep up with its competitors. Instead of calling it quits, they repositioned themselves.
Today BlackBerry is an industry-leading mobile cybersecurity specialist. They develop smartphone security systems and secure and compliant operating systems for a variety of industries. They remained within the technology industry but serve consumers in a new way.
Starbucks is a shining example of how to reposition while selling a product you already sell in a new way. As difficult as it is to imagine now, going to a restaurant just for coffee, a date, or a business meeting over coffee wasn’t always an attractive idea.
Starbucks launched in the 1970s selling coffee beans and coffee equipment, but no coffee or food products. Howard Schultz saw an opportunity, bought the Seattle chain of stores, and turned them into coffeehouses. They started marketing themselves as a “home away from home”, romanticizing the idea of reading, working, and socializing in coffee shops.
They are now a global brand that sells quality coffee, tea, specialty beverages, food, and even beer and wine in some locations. In addition to dominating the coffee market, the Starbucks mobile app features industry-leading mobile pay technology.
Spotify is an example of COVID-related repositioning. They were doing well as a free music streaming service that allowed advertisers to play ads in-between songs. Kind of like a radio, but users curated their playlists and selected the music they want to hear. Users could access ad-free streaming with a monthly subscription, starting at $9.99 per month. Subscribers also had access to offline streaming and on-demand playback.
Things were going well until COVID hit, and Spotify started losing both subscribers and advertisers. They continued offering music streaming but repositioned themselves as a music and podcast platform. This created new revenue streams by attracting a new listening demographic and charging a subscription to podcasters for uploading their podcasts. They also created curated playlists and Spotify® Originals to attract new listeners.
The timing was ideal, as the demand for quality podcasts skyrocketed during the pandemic.
Google is a shining example of how to expand a business model in a new and emerging market. They began as one of the first global search engines. While a transformative invention in 1998, Google was committed to maintaining a free search engine, leaving them without a revenue stream.
After experimenting with a few revenue streams, they launched AdWords in 2003—and digital marketing was created. The second new invention from Google!
Since then, Google has launched a variety of products that drive revenue. They have also had some failed revenue streams, such as their attempt to enter social media networking with Google+.
To date, AdWords has generated over $21 billion for Google. Other revenue streams include YouTube and Google Workspace tools. While many of Google’s technology and tools are free, such as personal email, Google Maps, and Google My Business, all products are designed to create a cohesive experience that ultimately generates revenue.
Ready to Reposition, Rebrand, or Expand?
These are just a handful of examples, but there are many more you can explore for inspiration. This includes Netflix, Apple, IBM, American Express, and more.