![]() ![]() Operating a single website is much simpler and more efficient. However, this does not tend to be the case. Some business owners create a separate website for each of their brands with the belief that more sites equal more sales. ![]() In this section, we’ll detail the ways Occam’s Razor can be applied in business to reduce complexity in certain situations. Where can Occam’s razor be applied in business? With just a single button on smartphones and tablet devices, designers gave consumers a sleek and minimalist product without extraneous features. While the removal of the headphone jack may have been a case of over-simplification, the design of the iPhone also reflects Occam’s Razor principles. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services. Apple Apple has a business model that is divided into products and services. Fries are of course made with potatoes, which are cheap and abundant and thus very profitable. In an attempt to boost their profits, McDonald’s created the now-infamous phrase “ Would you like fries with that?”īehind this catchphrase, marketers selected a very simple way to increase profits out of what was likely a large spread of options. The company generated over $23 billion in revenues in 2021, of which $9.78 billion from owned restaurants and $13 billion from franchised restaurants. The long-term goal of the company is to transition toward 95% of franchised restaurants (in 2020 franchised restaurants were 93% of the total). In 2021, over 56% of the total revenues came from franchised restaurants. Examples of Occam’s Razor in companies McDonald’s McDonald’s is a heavy-franchised business model. Simplifying procedures increases productivity and profitability by focusing on processes most likely to deliver results. Simplicity is achieved by starting small and focusing on the traits of a single, ideal customer to develop a marketing persona. No product or business can appeal to everyone, so defining a target audience should be made as simple as possible. ![]() Ultimately, consumer behavior is guided by simplicity and a pleasurable shopping experience. ![]() It might also mean removing wait times on customer support calls. It might be streamlining the customer purchase journey by removing unnecessary sign-up forms. Simplifying customer services means removing as many barriers as possible. Occam’s Razor suggests that product development teams discard as many features as possible and go for the simplest, most effective solution. Products with too many features distract a consumer and reduce product utility. Many businesses equate the number of features with the value of a product.īut they do not ask the customer what they value beforehand. Here, the simplest solution for the business is to focus on: Product quality While complex marketing strategies may be somewhat effective in attracting customers, far simpler solutions help businesses retain them. In business, companies spend vast amounts of time and money recruiting new customers and retaining them as loyal followers.Ĭonsumers themselves are bombarded with messages daily and are easily distracted by social media and other sources of cognitive overload. That is, the simplest solution is not always the correct solution.īut when a business is presented with several solutions to a problem, its best course of action is to choose the solution with the fewest assumptions. It’s important to realize that Occam’s Razor is not 100% reliable. The principle is attributed to 14th-century English theologian William of Ockham. In other words, with all things being equal, the simplest solution is often the best one. Occam’s Razor is a principle that states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything.
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