For more than 120 years, McCormick & Co. seasoned its growth by adding new products, slowly simmering its spices, sauces and packaged foods into a $4.2 billion global business.
Now, in its latest venture, McCormick is following a more modern recipe for expansion. Aiming to leverage connected customers in an increasingly digital landscape, McCormick cooked up FlavorPrint, an online recipe and flavor-recommendation engine.
McCormick joins a growing roster of traditional companies pushing into the "platform economy," tapping consumers' appetite for online community into a new economic model where the platform, not the product, is the engine for business growth.
According to Interbrand, 13 of the 30 most highly valued global companies are platform ventures, pushing aside product-centered industry giants that have commanded top spots for decades. Under this new business model, Apple, Amazon and Google are on the rise; Coca Cola and Exxon, not so much.
Moving forward, the platform will trump the product in almost any instance where there is head-to-head competition between companies with like offerings, contends Marshall Van Alstyne, research scientist for MIT's Initiative on the Digital Economy and professor of information economics at Boston University.
Platform players are better positioned to capitalize on the power of user communities and ecosystems to expand their reach and influence to other like-minded users and developers, Van Alstyne says. The upside of being easily able to reach other like-minded users and developers? Greater revenue and increased market share, he says.
Ready to grab those benefits for your organization? Read on for tips on how McCormick and two other traditional companies -- Houghton Mifflin Harcourt and PPG Architectural Coatings -- are successfully transitioning toward a platform-based business model.
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