Innovation Strategy of Block Inc.
Introduction
Block Inc., founded by Jack Dorsey and Jim McKelvey, has placed innovation at the heart of its mission to grow an ecosystem for distinct customers. Block is an overall ecology of various enterprises that are linked by a common goal to empower people economically while providing services to retailers, consumers, artists, fans, and developers. The company is made up of the following key divisions:
Cash App: It is a peer-to-peer payment program that allows people to transfer, receive, and invest money fast and aims at redefining the world’s relationship with money.
Spiral: Square Crypto has been renamed Spiral, and it intends to create and support free, open-source projects that improve Bitcoin’s privacy, security, user experience, and scalability.
TIDAL: It is a music streaming platform that provides songs in HiFi sound quality along with unique content, experiences, and services to bring fans closer to the artists they love while also providing artists with the tools to flourish as entrepreneurs.
TBD: It is an open-source platform that allows developers to develop decentralized products and services.
Since its inception, Block, Inc. has acquired/acquihired about 25 companies in different areas.
Innovation Portfolio Evaluation of Acquisitions
To comprehend the dynamics of their innovation investment portfolio and delineate the contribution of each investment to the organization’s long-term vision, the Six Levers of Innovation proves to be a valuable methodology. These six innovation levers stem from two pivotal drivers: the Business Model Innovation Driver and the Technology Innovation Driver, each encapsulating three levers. Business Model Innovation encompasses value proposition, supply chain, and target client, while Technology Innovation Driver encompasses service, process technology, and enabling technology.
Upon defining these levers, a strategic roadmap of the company’s product developments becomes apparent. The majority of these acquisitions and partnerships have notably benefitted the Square and Cash App divisions, enhancing their enabling and processing technologies within their product offerings.
As you can see above how Square and CashApp have a cohesive software ecosystem tailored for retail and service industries. A recent collaboration with Jane Technologies to enter the challenging Canadian cannabis market underscores their ability to provide retail solutions for difficult market entries. These innovative services position Square as an asset for companies facing intricate market challenges, solidifying its popularity, notably among Small and Medium-sized Businesses (SMBs)
Is Block’s Strategic Approach Effective?
Block’s strategic approach to inorganic growth has facilitated the introduction of breakthrough innovations in the SMB services sector, providing a distinctive competitive advantage. However, when examining the company holistically, a divergent pattern emerges. TIDAL, operating in the music streaming service sector, competes for market share against major players like Spotify and Apple Music. The recent acquisition of HIFI potentially reinforces the company’s commitment to financial transparency goals. However, Spiral and TBD operate independently, focusing on contributing to Bitcoin open-source initiatives and developing an open developer platform, respectively. These distinct verticals cater to varied customer bases distinct from other divisions within the company thereby creating ambiguity for investors about the company’s overarching business identity and strategic focus.
Block Inc.’s transition from Square, Inc. to Block, Inc. signalled a dedication to multifaceted expansion. A closer inspection of its diverse ecosystems underscores a nuanced narrative of connectivity. While certain facets exhibit a seamless integration, others seem to follow more independent trajectories. This raises questions about the congruence of the company’s overarching strategy. Addressing this divergence necessitates a meticulous reassessment of the company’s strategic goals. A potential avenue could be the adoption of a Play-to-Win strategy, aligning the disparate elements under a cohesive vision. It will be intriguing to observe how these divisions converge or diverge as the company expands and evolves.
Reference:
Block Inc. acquisitions from https://rb.gy/5m4zgp
Square. (2021, August 1). Square, inc.. announces plans to acquire Afterpay, strengthening and enabling further integration between its seller and Cash App Ecosystems. Square. Retrieved May 4, 2022, from https://squareup.com/us/en/press/square-announces-plans-to-acquire-afterpay
Why has square been successful? what is the future outlook for square? Wimsett & Company. (2015, July 8). Retrieved May 4, 2022, from https://www.wimsettandcompany.com/why-has-square-been-successful-what-is-the-future-outlook-for-square/#:~:text=Why%20has%20square%20been%20so,case%20the%20rate%20is%203.50%25.
BBC. (2021, December 2). Jack Dorsey’s square changes its name to block. BBC News. Retrieved May 4, 2022, from https://www.bbc.com/news/technology-59505516
