Imagine you are moving into your first apartment. At that moment, it is finally possible to furnish the apartment to your own preference. However, when you start orienting for furniture, you discover that there are no options to be found that resemble the image of how the new apartment should look preferably. Moreover, the furniture is often expensive as well. That is why Made.com decided to create a community in which its customers can vote for the designs they want Made.com to produce.
Business model
Made.com is an online furniture retailer from England without warehouses and inventory. This allows the company to save costs. Instead of warehouses and inventory, they use crowdsourcing. The website allows members to submit designs. Whether the design will get produced, is determined by the number of votes it gets from members of the website. This is also a great opportunity to draw attention for designers who lack reputation (Goldsmith, 2010).
When a design is proved to be popular, Made.com makes it available for pre-order. The pieces are then shipped directly to the customer, which cuts costs (Graham, 2010). In the past years, Made.com has started opening showrooms that allow customers to view the products available on the website in real life.
Efficiency criteria
Made.com benefits from joint profitability because designers get paid 5% royalties on successful designs and members benefit from being able to vote for their preferred pieces. Value is therefore co-created by involving customers actively in the process of deciding which pieces should be produced. A situation is created in which customers will not tend to switch to competitors because they have more options with Made.com and because they buy the exact pieces they want from Made.com. Made.com, on its turn, benefits from knowing which pieces they will probably sell (Graham, 2010).
Made.com did, however, get negatively affected after Britain voted to leave the EU in 2016. The feasibility of required allocations is therefore far from optimal at the moment. The Brexit was a huge setback to technology founders who are very dependent of foreign developers and engineers. Hiring these skilled employees will now be even tougher than before, since it was already hard to find expertise within the United Kingdom. Moreover, 35% of the employees that are located in London, are European. There is a huge uncertainty whether these employees will be allowed to stay in London (Olson, 2016). It could be decided any moment that Europeans need certain visas, which would affect the positions of the current employees and would make hiring skilled workers from outside the UK even harder. It could take two years for Britain to leave the EU, which means years of uncertainty where Made.com will not know regulations will impact their business (Meyers, 2016). The political institutional environment has created this situation, and people involved with Made.com are also socially impacted. Brent Hoberman, co-founder of Made.com, has stated that people feel rejection and that the atmosphere at the headquarters is very depressing (Olson, 2016).
The above illustrates that companies can be heavily impacted by its institutional environment, and that companies sometimes have little power to prevent such threats.
http://www.bbc.com/news/business-11437839
http://www.cbsnews.com/news/madecom-crowdsourcing-furniture-stocks/
Consumer Value Creation 