SELECT SUM(od.UnitPrice*od.Quantity) AS total_spent,
strftime("%Y", Orders.OrderDate) AS year
FROM Orders
INNER JOIN "Order Details" AS od
ON Orders.OrderID=od.OrderID
WHERE Orders.CustomerID="QUICK"
AND year !='NA'
GROUP BY year
ORDER BY yearAnalysis Report Four - Trend Analysis and Value Creation
Executive Summary
Digital ecosystems have created new opportunities for organizations to create value, generate revenue, and structure their business models. The previous report found that QUICK purchased Confections most frequently while spending the most on Beverages. This report builds on those findings by using trend analysis to take a closer look at how QUICK’s spending changed over time and whether Beverages remained the customer’s highest spending category. The results showed that QUICK’s spending was highest during the earlier years before dropping significantly in 2019, while Beverages remained the category the customer spent the most on throughout most years. These findings also show how access to customer data can help organizations identify value-creating opportunities that support digital business models. The supporting research highlights how organizations can use these opportunities while continuing to strengthen their digital networks and adapt their business models as customer needs continue to change.
Introduction
Traditional business models continue facing new challenges as organizations increasingly operate through digital platforms and ecosystems. Digital entrepreneurs are introducing new ways to generate revenue, create value, and connect users through digital platforms, fundamentally changing the way organizations operate and compete. While digital platforms have created new opportunities for organizations to grow, the size of a platform alone does not determine its prospects for long-term success. According to the Harvard Business Review article, the shape and structure of a platform’s networks are equally important. The authors discuss five basic network properties including network effects, network clustering, disintermediation, multi-homing, and network bridging that organizations can use to evaluate a platform’s scalability, profitability, and ultimately its sustainability. These concepts also help explain why some platforms develop stronger and more defensible network structures than others (Zhu and Iansiti, n.d.).
These network characteristics can also help or hinder different digital business models. Strong network effects can benefit the marketplace and platform model discussed by Marr because the platform becomes more valuable as more people use it (Marr 2023; Zhu and Iansiti, n.d.). On the other hand, disintermediation can make it harder for these platforms to capture value when buyers and sellers complete transactions outside of the platform. Multi-homing can also create challenges when customers are able to use competing platforms at the same time (Zhu and Iansiti, n.d.).
Outside Research
Although digital platforms have made it possible for organizations to grow faster than ever before, they have also made it easier for new competitors to enter existing markets. As a result, organizations that fail to continue creating value can lose their competitive advantage just as quickly. As organizations increasingly move into digital ecosystems, they are able to create more value by working with other participants than they could individually. However, Dai et al. explain that this also creates new challenges because organizations must balance value creation with value capture while satisfying the interests of multiple participants within the ecosystem (Dai et al. 2024). A good example of this is Apple’s App Store, which generated approximately $1.1 trillion in commerce during 2022 even though about 90% of those transactions generated no commission revenue for Apple (Mims 2024). This example helps explain why managing a digital ecosystem becomes more complex as organizations try to balance creating value for participants while also capturing enough value to support the platform.
These challenges have become even more important as digital technologies become more ubiquitous across industries. Vaska et al. explain that “the new digital environment requires firms to use digital technologies and platforms for data collection, integration, and utilization” to identify growth opportunities and remain competitive (Vaska et al. 2021). The authors also explain that firms adopting digital technologies place data at the center of their digital transformation strategies because it supports business model innovation. As organizations continue integrating digital technologies, they must also reevaluate their core competencies, activities, roles, and capabilities to remain effective in an increasingly digital environment (Vaska et al. 2021).
Data Visualizations
To continue building QUICK’s customer profile from the previous report, I used trend analysis to understand how the customer’s spending changed over time, determine whether the patterns identified in the previous report stayed consistent, and identify potential opportunities for Northwind to create additional value.
Visualization One
The first visualization compares QUICK’s total spending across each year.
ggplot(data = query1,
aes(x=year,
y=total_spent,
group=1))+
geom_line()+
labs(
title="QUICK's Total Spending by Year",
x= "Year",
y="Total Spending"
)
The visualization shows that QUICK’s spending was highest in 2013 before dipping in 2014 and 2015. It then increased again between 2016 and 2018 before dropping in 2019. Based on this information, Northwind may want to investigate what contributed to the periods of increased spending, specifically between 2016 and 2018, and what caused the significant drop in 2019. Understanding what contributed to these changes could help Northwind identify new opportunities to create value for the customer.
Visualization Two
The previous report showed that QUICK spent more on Beverages than Confections. To build on those findings, I compared yearly spending in both categories.
SELECT CategoryName,
SUM (od.UnitPrice*od.Quantity) AS total_spent,
strftime("%Y", Orders.OrderDate) AS year
FROM Orders
INNER JOIN "Order Details" AS od
ON Orders.OrderID=od.OrderID
INNER JOIN Products
ON od.ProductID=Products.ProductID
INNER JOIN Categories
ON Products.CategoryID=Categories.CategoryID
WHERE Orders.CustomerID="QUICK"
AND CategoryName IN ("Beverages", "Confections")
AND year !="NA"
GROUP BY year, CategoryName
ORDER BY yearggplot(data = query2,
aes(x=year,
y=total_spent,
group=CategoryName,
color= CategoryName))+
geom_line()+
labs(
title="QUICK's Spending Trends for Beverages and Confections",
x= "Year",
y="Total Spending",
color="Product Category"
)
Although spending in both categories fluctuated over the years, QUICK generally spent more on Beverages than Confections. Spending in both categories dropped in 2019, and by 2025, spending had returned to levels similar to those seen in 2012. Northwind may want to investigate what contributed to the lower spending across both categories after 2018 while continuing to focus on the Beverages category, since it generated the highest spending from QUICK throughout most years.
Digital platforms can build on this type of analysis by using the customer data generated through their networks to identify additional opportunities to create value (Zhu and Iansiti, n.d.).
Recommendations for Industry
Customer data can become more valuable over time because it provides insights that may have otherwise gone unnoticed. Organizations should continue collecting and analyzing customer data to better understand changes in purchasing behavior and customer value. This allows organizations to spot changing trends earlier and make informed business decisions.
Organizations should also evaluate the strength and structure of their digital networks and identify potential weaknesses before they become bigger issues. Understanding how customers and other participants interact within the ecosystem can help organizations strengthen their networks and identify new opportunities to create value.
Finally, organizations should expect customer needs and markets to continue changing. As those needs change, the way organizations create and capture value may need to change as well. Organizations that stay flexible and continue adapting their business models are better prepared to respond as customer needs, markets, and digital technologies evolve.
References
Marr, Bernard. 2023. “The 7 Most Successful Business Models of the Digital Era.” Forbes.
Mims, Christopher. 2024. “The Main Driver of Apple’s Success Has Become Its Biggest Liability.” The Wall Street Journal, January.
Vaska, Selma, Maurizio Massaro, Ernesto Marco Bagarotto, and Francesca Dal Mas. 2021. “The Digital Transformation of Business Model Innovation: A Structured Literature Review.” Frontiers in Psychology 11: 539363.
Zhu, Feng, and M Iansiti. n.d. “Why Some Platforms Thrive and Others Don’t. 2019.” Harvard Business Review 97: 118.