CASE STUDY: LIFVS ELECTRONIC SELF-SERVICE GROCERY STORE

Posted: January 5th, 2023

CASE STUDY: LIFVS ELECTRONIC SELF-SERVICE GROCERY STORE

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Case Study: Lifvs Electronic Self-Service Grocery Store

Question 1 – Lifvs’ Business Model and Appropriability Mechanisms

Lifvs’ Business Model

Lifvs’ business model is built on innovative technological operations and solutions such as machine learning to enhance business practices and promote replenishment. Specifically, Lifvs uses the self-service business model where consumers do not require any guidance or directive from store owners or attendants. The group relies on a specially created app to run key operations such as accessing the store, scanning goods, and making payments. The firm’s management has access to all consumer data using the app, resulting in numerous opportunities for customized communication and personalization. The model is different from other operators in that buyers can interact with advanced technology while serving themselves. The uniqueness of this feature places the store ahead of its competitors if implemented correctly to be seamless.

Lifvs’ value proposition is that buyers can have the opportunity to serve themselves in a retail store without relying on the guidance of store owners and attendants. Moreover, the mode of operation reduces congestion within the business premises because workers who usually hang around their workstations until it is time to leave are not there. The approach sells Lifvs as being unique among its rivals because it encourages the autonomy of its buyers and nurtures them into responsible individuals. They appreciate the need for honesty and belief that being ethical provides them with a chance to live in a society where one does not suspect the other. More fundamentally, Lifvs’ value proposition distinguishes it from other operators in the sector in how it displays its capacity to deploy superior technology.

Appropriability Mechanisms Available to Lifvs

Lifvs should take advantage of the available forms of appropriability mechanisms and embrace those that can help to safeguard available resources. Smith (2015) describes appropriability as the innovator’s ability to acquire or gain good returns from their investment in intellectual property or effort and hard work to create a new service or product. A possible appropriability for Lifvs is institutional protection through patents that offer protection to the trademark and logo the firm uses to sell its brand. Alternatively, the developer can choose to improve its human resource management (HRM) practices by paying more attention to how it handles employment contracts and worker commitment (Smith 2015). Other suitable appropriability mechanisms that the entrepreneur can use are lead times, which entails making upgrades and using technical approaches such as setting passwords and encouraging secrecy (Smith 2015). An effective option between the two approaches is to acquire a patent that provides the legal mandate to use an invention for a specified period, especially for two decades (Smith 2015). Acquiring patents is the best option because the approach provides the firm with the right to inhibit others from imitating, producing, and selling the firm’s inventions without permission (Smith 2015). Furthermore, the approach is appropriate because it allows the enterprise to enjoy protection for a specified period, permitting the company to keep rivals at bay (Smith 2015). Paying adequate attention to appropriability mechanisms offers the chance to run the startup without any fears of unexpected infringements. 

Question 2 – Examining the Plan to Establish a Similar Startup in the UAE

Sources of Funding

The aspiring business owner can take advantage of the various available funding sources that may play key functions in facilitating the formation of the startup. The entrepreneur should consider some of the possibilities of securing funding from the government. However, the startup is only likely to attract state funding if the processes are innovative enough and likely to impact the target industry. Fortunately, the President of the UAE and Ruler of Abu Dhabi, H. H. Sheikh Khalifa bin Zayed Al Nahyan initiated a program, the Khalifa Fund for Enterprise Development, in 2007 to develop local entrepreneurs and investors and encourage the formation of SMEs investment in the country (UAE 2021). Another possible option would be to secure funding through loans from banks, but this would require the developer to avail required guarantors and securities to convince lenders. The aspiring business lady should also be certain that she would pay back the required amount within the agreed time. Taking loans from lending institutions may prompt the business ownerto consider debt financing as a possible source for funding. Using debt financing requires the firm to first settle earlier debts before securing another funding. Nevertheless, the entrepreneur must first weigh all available options and make a judgment that would be the most appropriate for the organization.

Sources of Innovation

The business owner must consider various sources of innovation from where she can gain valuable insights and ideas. One of the primary sources is individuals who have extensively developed innovative ideas over the years. Individual innovators continue to impact contemporary innovative ideas because some innovators act as role models (Doloreux, Sheamur & Rodriguez 2019). Moreover, the emergence of new startups and new organizational arrangements make individuals a vital source for innovation. Some of the renowned individuals who develop unique innovations include Bill Gore, Ron Hickman, and James Dyson, who developed a waterproof fabric, portable workbench, and bagless vacuum cleaner in 2003, 1987, and 1997, respectively. The business person can access individual sources by identifying, contacting, and interacting with reachable innovators relevant to her target sector. The second possible source of innovation is corporations that invest significantly in research and development (R&D), intending to make discoveries that result in the formation of new products (Doloreux, Sheamur & Rodriguez 2019). The entrepreneur must identify corporations that make innovative ideas and discoveries applicable in the hospitality sector and engage them in talks that would result in the production of concepts that help the startup excel in its field. The third possible source of innovative ideas is users, particularly lead users who use a product in demanding superior applications and have advanced experience (Doloreux, Sheamur & Rodriguez 2019). Users may also include businesses that develop new concepts while using particular services or products. Finally, it is possible to acquire helpful, innovative ideas that would help develop the startup in the UAE by engaging the state to fund innovative concepts and take measures to address market failures. The different sources of innovation will give the entrepreneur different products or processes to set it on the path to market dominance.

Ethical and Privacy Issues Considerations

The developer must pay considerable attention to the possible ethical concerns that could impact how the startup functions and develop adequate structures to mitigate potential data privacy issues. The business person should borrow teachings from utilitarianism, which requires one to conduct themselves in a way that benefits most people or in a way that most people perceive to be appropriate. In addition, the entrepreneur must understand that developing such a smart facility that entirely relies on technological innovations could attract data privacy issues, which requires adequate protective measures to avert possible violations. Cases of spying and snooping and location tracking are on the increase. Therefore, failure to embrace protective measures such as using firewalls, embracing blockchain technology, and installing anti-viruses could expose company and consumers’ data to possible infringement by attackers whose intention is to make a personal gain. Nevertheless, disregarding the protective measures would subject the firm and the data it handles to multiple attacks by cyberattackers. 

Reference List

Doloreux, D, Sheamur, R & Rodriguez, M 2019, ‘Internal R&D and external information in knowledge-intensive business service innovation: complements, substitutes or independent?’ Technological and Economic Development of Economy, vol. 24, no. 6, pp. 2255-2276, doi:10.3846/tede.2018.5694.

Smith, D 2015, Exploring innovation (3rd ed.), New York: McGraw-Hill Education.

UAE 2021, Financing businesses. Available from: <https://u.ae/en/about-the-uae/leaving-no-one-behind/1nopoverty/financing-businesses>. [27 April 2021].