Very interesting write up! I’ve always wondered how Trader Joe’s is able to offer high quality products at affordable prices, whereby Whole Foods offers similar quality products but at much higher prices.
You pointed out the benefit associated with selling private label products. I agree with you that that helps enhance margins by cutting out the middlemen. In addition to that, I believe that by cutting out the middlemen, TJ is able to reduce the impact on bullwhip in the supply chain, which arguably could help further reduce costs over the entire supply chain (thereby benefiting TJ).
Furthermore, the reliance on a limited SKUs is clearly evident in the TJ shopfloor. In addition to what you pointed out, this approach helps reduce TJ’s inventory holding costs, thereby contributing to TJ’s low cost advantage.
Finally, I found interesting their focus on customer-service. I know several TJ loyal customers who always cite strong customer service as one of key reasons for why they shop there.
Conveniently named after you!
You did a great job presenting the linkage between the operating and business models. What I found most interesting is the fact that they cross train their workforce. By doing so, the nurses are able to do more work tasks that would otherwise require a higher-cost doctor to perform. This is quite innovative. This section reminded me of the concept of cross-trained teams and how using such types of teams can help reduce cost, and increase speed and efficiency. I would be curious to learn if this model of low cost healthcare can be adopted in other countries that don’t have the same population scale as India.
Great job explaining the linkage between the business and operating models. What I found most interesting is your assessment of the technological leadership, especially with the fact that they hire temporary workers to augment their R&D if needed. That way, they are able to reduce R&D costs throughout the economic cycles, thereby reducing the price they charge their customers. This is definitely an advantage given the cost-competitive sector they operate in. I would be curious to know if companies in other sector can adopt this approach of hiring temporary R&D personnel.
Very interesting read. I have flown on Emirates several times and was always impressed and intrigued by how they were able to upkeep high quality service at relatively reasonable prices, especially when compared to other international carriers with scale.
I agree with your assessment of the linkage between the business and operating models. Specifically, it is interesting to read about the linkage between Emirates’ new fleet with its ability to deliver high quality service at affordable prices; this makes sense especially since Emirates spends a lot on buying the latest airplane models.
With the help of Emirates’ airlines, Dubai has been able to attract a lot of leisure and business travel.