Katie, great post! Zara’s fast fashion design process is truly impressive. Given their huge global footprint, I am curious if their operating model allows them to tailor their styles on a regional basis to appeal more broadly to local consumers. If not, do you think this is something that would help Zara attract new customers or break into new markets.
It’s really interesting to see how they are continuing to improve upon their operating strategy with new innovations, such as the in-store handheld devices for instant reorders. My personal experience with Zara is HUGE lines every time I go, anywhere I go — most recently in NYC and Seville, Spain. In fact, I think I’ve walked out more times than I have actually purchased there — 20 minutes wait for a fitting room or checkout is my threshold! While this really says something about the popularity of the brand, I would like to see them optimize the in-store experience to support their high volume of customers and not lose any sales to a checkout bottleneck. I read that they are considering virtual fitting rooms (maybe just a novelty?) and mobile checkout options (at least for single-item purchases or accessories?). I would love to see them pioneer this technology as I think it will improve their client experience and support their explosive growth.
Really interesting operating model. It sounds like Tire Rack has created a very effective way of educating tire shoppers, providing quality assurance, and guaranteeing a competitive rate on installation. The most impressive part of their business model, to me, is that they are able to fulfill orders anywhere in the country within two days. I would be interested in seeing how much inventory they have to keep on hand to sustain this and also what their cash conversion cycle looks like. Also, I’m curious if they are delivering to the mechanics or directly to the customer? I would hope they are able to get the tires directly to the mechanic otherwise this extra step of transporting tires from their homes to the mechanic for installation seems a bit burdensome.
I wonder exactly who they are targeting because I personally would get serviced at a dealership or an Autozone, which seems easier since – for me – tires are a low involvement purchase. Perhaps they are targeting car enthusiasts or people who need high performance vehicles for their job. Or perhaps, they are targeting value customers if their business model allows them to offer lower prices than the more traditional outlets? How does their pricing (tire + guaranteed installation fee) compare to a rival such as Autozone? Also curious whether they sell to mechanics and retail outlets like Autozone or only direct to consumer? Is there an opportunity there?
Very interesting to see how the company has grown organically over the last 45 years. It seems like a well-aligned business and operating model has allowed it to maintain its competitive foothold in the market.
Great post, Camila! It seems like Terra Nova has found a very creative and structured solution to a problem that, as you pointed out, affects a huge percentage of the world’s population. I am amazed that, given the bureaucratic problems emerging market countries often face, Terra Nova has created an effective process to speed up the land transfer “cycle time” to 24 months. What a complete paradigm shift for this industry! It seems that this is really possible because of their focus on alignment of all parties and to find a reasonable settlement that benefits everyone. I am curious to see how the government is incentivized to provide more investment in the public infrastructure as a result of this and what that investment will ultimately look like.
My questions are:
1. How does TN ensure that landlords will be willing to sell to current residents? What if they think they can get a better offer from elsewhere?
2. As TN scales, is there a bottleneck to how many transactions the government is able to facilitate at once? Will they reach a growth plateau? How can they continue to improve processes to make this more systematized and expedited? How will costs be impacted?
3. Is Terra Nova’s cut of these transactions too large? They are clearly creating a lot of value in time and resources saved for the landlord and tenants, as well as increasing the value of the neighborhood and improving social good. How do they balance capturing value for themselves with ensuring that they keep sale prices low enough for tenants to afford and that the landlord is happy with his share?
Overall, TN seems like a great impact investment opportunity and I hope it continues to pioneer and perfect this model, so that ultimately it can be adapted in other countries!