What makes a business succeed? What makes a business fail? The latest statistics estimate that one in five startups fail in their first year, and up to 90% fail within ten years of their establishment date. The reasons vary greatly, but the most common include: a lack of funding, cost issues, the absence of a business model, poor business strategy, poor market demand, and burnout.
On the flip side, we’ve got businesses that are well established in the market — the giants that other companies aspire to become. If you look at the most recent Fortune Global 500 Ranking, you’ll spot two companies at the top, interestingly both representing the retail sector — Walmart (currently valued at $765.819 billion) and Amazon (valued at $2.337 trillion).
But how did these two companies get there? What can new or struggling companies learn from them? And most importantly, how can business design and design thinking improve your strategy and help you find a competitive advantage that no one else in the market offers except you?
The story of Walmart
In a book titled Good Strategy, Bad Strategy, author Richard Rumelt perfectly summarized Walmart’s success by describing how Sam Walton, the founder of Walmart, didn’t just break conventional wisdom — he broke the old definition of a store that had existed before. Instead of copying competitors, Walton focused on building a network of large discount stores, situated in small towns, and connected them by management flows, data flows, and distribution centers. It was an innovative approach that no one had taken before.
Walton, in his strategy, focused not only on providing low prices to customers through logistics improvements, but also on gathering information about customer behaviors and implementing solutions that unified all of Walmart’s stores. One such example was barcode use on product packaging, which Walmart first introduced in the 1980s. Although barcodes are extremely common today, at that time, the solution helped Walmart manage inventory more efficiently and optimized its logistics operations. With this system, the price of an item could be easily changed in the central system, eliminating the need to print extra labels and replace them if the price changed. Today, we call all of these processes supply chain management, and Walmart mastered it ahead of its competition.
The story of Amazon
Amazon was founded by Jeff Bezos in 1994, initially as an online bookstore, but it quickly evolved into a global technology and e-commerce giant we all globally recognize. Over the years, Amazon revolutionized the retail industry by offering express shipping, investing in personalization, experimentation, and technological solutions such as Kindle (an alternative to traditional books) and the voice assistant Alexa. Furthermore, Amazon’s empire now also includes Amazon Web Services, Prime Video streaming service, and Whole Foods Market, making the company a leader across multiple industries.
At the core of Amazon’s business strategy is a value similar to Walmart’s — relentless customer obsession. The company focuses on factors that matter to their customers the most: low costs, fast delivery time, and a wide choice of products. With the use of personalization and experimentation, Amazon’s found a profitable and efficient way to offer products tailored to individual needs based on purchase history and browsing behavior. Moreover, Amazon offers a membership program for its most loyal and frequent customers — Amazon Prime, which makes delivery free, fast, and unlocks exclusive deals for members. This focus on customer satisfaction and innovation has allowed Amazon to scale rapidly while maintaining a strong customer experience (CX) — something other companies aspire to offer.
Another key aspect of Amazon’s business strategy is its ability to diversify and expand into new markets globally. Amazon’s cloud computing division, AWS (Amazon Web Services), is one of its most profitable segments, providing services to businesses and governments worldwide. The company also aggressively expands into new industries, from healthcare to advertising, ensuring further growth. This constant evolution makes Amazon not just a retail giant, but a global tech powerhouse shaping the future of commerce and digital services.
What’s the key to a successful business strategy?
If we compare both companies, each followed a completely different strategy and journey to becoming the most successful in the game. However, what connects them on a deeper level is the relationship between an initial idea and business design focused on the customer. Throughout the years, they have both mastered their knowledge on their target customers, from observing their current behaviors to overseeing long-term trends.
Competitive advantage: why you?
It’s no secret that we live in an era of abundance and choice. If you don’t like one product or service, you can easily throw it away and replace it with an alternative that better satisfies your needs. This makes the market extremely competitive, with some industries being naturally more susceptible to failure, especially when competing against well-funded competitors. That’s why it’s more important than ever to identify your competitive advantage that no one else can offer.
Timing
Timing can also determine success or failure. For example, for Peloton, the American exercise equipment company, the COVID-19 pandemic was a happy era of massive growth. During the pandemic, all gyms closed, people began devoting more time to their personal lives while working from home, and everybody opened up about the importance of physical and mental health. As a result, Peloton’s revenue more than doubled from $714 million in 2019 to $1.82 billion in 2020, and then skyrocketed to over $4 billion in 2021. However, due to a sudden increase in demand and insufficient stock, Peloton overinvested in the equipment itself. When demand dropped (or returned to its normal state), all the excess equipment ended up sitting in the inventory, generating further costs. Additionally, Peloton’s brand image severely suffered when several safety incidents involving their treadmills were reported, including a child’s death.
Luck vs. strategy
Here’s the truth: the most successful companies you aspire to be like have not succeeded solely by chance. While luck is crucial in business, it should NEVER be the factor you rely on until you run out of funds. If you think it is, I’d suggest that you stop reading this article because you may not benefit from it as much as folks who believe in the power of statistics, which clearly show that 90% of startups fail in their first 10 years. I sincerely hope that all my readers are the lucky ones because that would be amazing, but if you believe in luck and your business idea too much, I hope that you can still learn a thing or two from this article that will save you money and improve your company.
Business design: making companies thrive
All company owners would love to succeed overnight, but we have to remember that the market today is much more competitive than it used to be last year, five years ago, or ten years ago. To help your business grow, you need to look at multiple factors that shape your company and make it distinct from all others. These factors are:
1. Market needs: why one-size-fits-all doesn’t work
Market needs can greatly depend on location and scale of the market today. The market in the US may be completely different from the market in the UK. It can also vary by city or even neighborhood. What works in a rural area may not work as well in a busy city center (think an IKEA store, a launderette, or a car wash).
I’ve recently taken a road trip around Albania, and it was astonishing to see how popular their “car wash + coffee” services were in the suburbs. The idea was rather simple: as you wait for your car to get washed, you can sit and watch the whole process while sipping a cappuccino. Would this idea work anywhere else? Maybe…
2. Customer’s needs and behaviors: are you listening?
YOU are not the customer. Many business owners or managers (in case you’re not the owner) don’t talk to their customers and underinvest in learning more about their target audience. If you’re one of them, ask yourself: Are you building a company for yourself or for others?
3. Competition: surviving the business battlefield
What makes your business special? How should you progress over the next 1, 2, 5, or 10 years so that you’re still relevant and one of a kind? How can you fight the competition when it appears on the horizon? How can you fight the competition if it’s already out there? We’re all ambitious, but sometimes we also tend to get too comfortable and ignore the first signs showing that something doesn’t work anymore.
Some competitors tend to be more aggressive or even unethical in their attempts to get ahead. You might have heard about the concept of the Blue Ocean Strategy, created by W. Chan Kim and Renée Mauborgne, professors at INSEAD. They split the market into two separate categories: the red ocean, consisting of companies that already exist and are full of what they call ‘bloody’ competition (hence the name), and the blue ocean — industries that don’t yet exist or are so niche and/or powerful that no one competes with them. If you want to stay relevant longer and ahead of any competitors, you should always aim for features that keep you in the blue ocean.
Business design: the blueprint for future-proofing your company
By definition, business design is the strategic process of shaping a company’s DNA — its structure, operations, and customer experience (CX) to drive long-term success. It blends elements of business strategy, design thinking, and innovation, which together can build companies that are not only profitable but also adaptable to change. Unlike traditional business planning, which often focuses solely on numbers that, let’s be honest, can be dry and hard to translate into real action for majority of people, business design prioritizes outlining moves beyond numbers, such as improved customer needs targeting, identifying new market opportunities, future planning, and adding creativity.
The true power of business design lies in its ability to future-proof companies and set them up for success outside of the red ocean of ‘bloody’ competition. In today’s chaotic and ever-shifting markets, businesses need more than just a great product or service — they need a well-structured ecosystem that supports growth and resilience. A well-designed business considers every aspect, from customer journeys and brand positioning to digital transformation and supply chain efficiency.
You may think: Well, but what do the words “design” and “design thinking” have to do with business? In fact, bringing design principles into business decision-making helps companies identify new revenue streams, enhance customer loyalty, and differentiate themselves from competitors. Think Walmart, Amazon, Apple, Airbnb, or Tesla, all of which are famous for leveraging business design and focusing on the customer.
They don’t just sell products; they create unique and intuitive experiences, strong brand identities, and ecosystems that keep customers coming back for more. Business design ensures that every piece, from technology to operations, customer service, and marketing, work together like a well-oiled machine. It fuels continuous innovation, anticipate shifts in consumer behavior when it happens, and enables companies to scale without losing their momentum.
In a world where disruption is constant, business design isn’t just an advantage — it’s the difference between companies that fade and those that lead.
