Problem
How you plan on addressing them in your written report. You may choose only the relevant topics; however, your final report should address at least one question from each block.
Block 1: Because the proposed innovation is a business model one, this falls into the category of process innovation. Zillow shifted the business model from providing advertisements to owning and renovating houses, taking a fair amount of risk for a public company, considering that margins are very thin. Its current business model targets individuals looking to buy a home to live, but the company's returns have remained low. In order to reduce the risk and increase the profit, Zillow must change the targeted buyer. As an example, companies such as Tricon Residential Inc. has started a joint venture with three institutional investors to acquire single-family rental homes. They are committing $1.40 billion for around 18,000 single-family homes. With such a high interested market, Zillow can certainly improve their returns.
Block 2: How Zillow can achieve this, depends on the richness of the networking clusters it can create. Not as much as in co-location with these institutional firms, rather than with explicit collaboration, informal knowledge exchange and making use of ‘Marshallian externalities' where Zillow and these firms could share some mutual benefits (i.e. data exchange, accessing a pool of skilled workers, and so on).
Block 3: This innovation in business model, also changes the type of consumer for Zillow. As we saw, up until now, Zillow's end buyers are individuals who are looking to buy a place to live, and once they achieve this goal, they typically won't look for another place to buy. This conventional consumer, almost passive one, would be changed rapidly to a more active one. The new consumer, these institutional firms, would be seeking a variety of properties, and once a property is rented out, they will look for other ones.
Block 4: The effects of this innovation are beneficial for both Zillow and these institutional firms. Clustering with these firms can create a market structure that is close to oligopoly. This market structure gives both opportunity and incentive for further innovations.
Block 5: The antitrust laws prohibit agreements and other conduct that unreasonably restrain trade. These clusters with institutional firms have the end goal to increase the amount of trade per year, which is beneficiary for Zillow, buying firms and the end consumer who rents these properties. Having a higher transactional activity is generally better for the economy and for the governance as well.
The response must include a reference list. Using one-inch margins, double-space, Times New Roman 12 pnt font and APA style of writing and citations.