Thank you for your thoughtful comments. Two of the key issues brought up is 1) how scalable is this business given the operational challenges to preserve a consistently unique Hai Di Lao experience across the country and 2) is this business model financially viable given the investment in the extra stuff?
First, I think the owner of HDL recognizes the challenge of scalability early on, and started to make investments in standardizing the food sourcing and preparation process in the beginning to ensure consistent quality for the dinning experiences. On the service side, they applied the same layout and service items to all the eateries across the country and the staff are also trained by the same protocol. However, I did had various quality levels of the services in different eateries. This could one of the areas the owner needs to establish better performance controls to even out the variance in quality.
Secondly, the 20-30% price premium is an average #. The restaurants actually selectively add price premium for food items that have low price transparency or not widely available in other hot pot restaurants. By doing so, they left the impression to customers that HDL is not much more expensive than other hot pot restaurants, and they are getting the free stuff for free for real. I believe their margins are so much better than average hot pot restaurants. Most of the price premium was used to cover the operating expenses. It’s the sheer volume that drives its business’ growth.
Anddddd–we should all go to have hot pot as a team one day!
Interesting pick! Your analysis of breaking down a traditional dinning experiences, and pointing out Maple’s focus on food quality, low cost, and fast delivery is insightful and concise. I think it’s a very nice case where the operating model was specifically designed to support the business model. Limited menu options allow the food to be prepared in advance to accelerate the turnaround time. Having its map technology to ensure on-time delivery is also impressive. My questions would be how does maple deal with fluctuating demand, and varying distance of the order locations to ensure consistency in the timeliness of the service. Do they stop taking orders once capacity is maxed out or limit the order taking to a certain area around the kitchen?
Well written, and a very eye-catching title!
You well articulated what sets SOUL apart from other gyms, and how they deliberately made investments in operations to support their core advantages. My question is besides first mover advantage, how does SOUL differentiate itself from other spinning companies in the core metro markets? Besides loyalty to certain instructors, I’ll guess convenience (i.e. proximity to home/workplace) and price will be important factors. If that’s the case, should SoulCycle think about really rapidly expanding and covering the major locations in NYC or LA to prevent competitors from taking up the most strategic locations? How did they decide where to open a studio, and how do they think about their pricing strategy?
Interesting post! Really like how you concisely summarized Tinder’s business model, and how they started with a free model to form a critical mass of core users, and then launch the Plus features to capture the value created. However, I think the highlights of the operating model can be more Tinder-specific. Right now the operating model’s features (e.g. talent and org management, IT infrastructure design, etc) can be applied to most of the internet start-ups. Instead, I think Tinder faces some unique challenges to be address at the operations level. For example, how do they continue to attract core users beyond organic growth, how do they deal with potential reported sexual harassment cases, how do they measure customer satisfaction?