Yes, one word describes about 99.9% (not a scientifically researched number, but we reckon we’re close) of all the business models in the world, and that word isn’t “cheaper” or “better”, although what it is encompasses both of those qualities.
Can you guess what it is? How close can you get? Closer still…
It’s “nearer”.
If you really desperately need something that isn’t available anywhere else, you might, just might, travel all of the world to get it. You might visit a sacred site hoping for a miracle, or the best hospital in the world to look for a cure.
The rest of the time, you go to the nearest outlet, and buy it there.
If there’a a shop 20 minutes away, and another 2 minutes away, you go to the closest one ten times out of ten. If it’s a bit more expensive, you’ll still go to it, because it will cost you money (transport costs) and time (36 more minutes there and back) to go to the further one, so you can afford to pay a bit more. If you think your time is very valuable, you might pay a lot more, which will mean that although the “near” shop is technically more expensive, for you it is both “cheaper” (it saved you time/money) and better (it saved you the hassle of travelling).
That’s why nearer is cheaper and better, and why it is the world’s biggest business model. It’s a much better way for explaining the success of globalisation than most academic models. People want to buy things near them, because that makes them cheaper and better.
And if your business has a physical location, and isn’t entirely an intangible product, its proximity to customers will be a big part of its business model. It will be part of the value it creates. It will be one of the very important ways it is better compared to competitors that are further away.
When you are defining your market, the “who” you are creating value for, how far people are from you could well be a key consideration, potentially limiting your total addressable market. The internet and e-commerce has changed this a very great deal, but still the ability to get something delivered to you promptly affects most consumer decisions.
There’s no point marketing your product to people who can’t buy it, so your thought process about creating value should only be focused on the people who can, and your marketing targeted on the people that it is convenient for.
Answer the following questions before you work out where you are.