Interesting story that touches on Wal-Mart’s “Win, Play, Show” strategy for product selection: Win — items where Wal-Mart can beat rivals with low prices on hot products, like flat-screen TVs Play — items like apparel where Wal-Mart can play but is unlikely to dominate Show — items that are one-stop shopping essentials like hardware, to…
In any franchise-based business model, there is always tension between the franchisor and the franchisees. The franchisor develops a system and brand(e.g. McDonalds, Marriott, Curves) and licenses it to franchisees. The franchisee is responsible for an initial investment and paying some type of royalty back to the franchisor. The tension comes when the franchisor tries to require…
In many companies, it is a management mantra to “take out cost”. What does it actually mean to “take out cost”? A great example is found here in a recent story about Costco. Some things to think about: “Taking out cost” does not mean indiscriminately slashing headcount or some vague blather about leadership. It means systematically evaluating…
Ecosystems typically have a healthy tension between players that creates a win-win for all parties. Often the players of the system stay in line with the dominant player, but occassionally one player will try to innovate outside of the system — as HP is now doing with Microsoft Vista. The Windows Vista ecosystem is "showing signs of…
The largest Chevrolet dealer in the country filed for bankruptcy in September 2008. So far in 2008, 590 auto dealers have closed their doors, compared with 1,200 between 2001 and 2008. As described here, the auto manufacturers are quite pleased to see these dealers go. Why? The business model doesn’t work, especially in an economic…
