Mr. Prince (probably!) this is an excellent article. The adoption of new technologies by consumers is always hindered by upfront investment. Guaranteeing cost-savings with zero investment significantly raises trialability, and the observability of the product’s advantage is off the charts!
I read that SolarCity reduced its costs by pursuing large-scale contracts for military housing (see link below), which allowed it to move towards a wholesale model as opposed to the typical custom-made approach required by households. This could have contributed to the reduction of cost per watt as shown in your chart.
Worth mentioning that Tesla and SolarCity have one thing in common: Elon Musk, and that the synergies could one day warrant merging (parts of) the two businesses.
Really well-constructed Daisuke!
You mentioned the Yakult Ladies approach as raising the barrier to entry for competitors, but can we maybe look at things from another perspective? If one of the main issues for lower-end consumers is education about the product, could Yakult Ladies be doing the education work for other competitors who can now use more traditional distribution channels for more cost-effective delivery methods? Do you find that the trust factor (which Yakult Ladies definitely have as an advantage) can influence purchasing decisions for this category of product?
I ask this question because my sister is adopting a slightly similar approach marketing a new skin care product in Jordan, and I am looking to help her optimize her go-to-market strategy! Will she basically end up doing all the education work for competitors, or will she build a trustworthiness advantage over the inevitable competition?
Nice article Bass!!
One thing I find truly fascinating is Emirate’s ability to (1) have an average age of 6 years for its fleet and (2) operate only wide-body aircraft as opposed to a mix of wide and narrow-body planes.
With respect to (1), the fuel efficiency gains achieved by operating newer (and therefore more efficient) aircraft can be offset by the massive investment it takes to update a company’s aircraft fleet. While most airlines would love to have brand new aircraft, they are limited by their ability to invest upfront in new aircraft. How does Emirates do it??
As for (2), most airlines use smaller aircraft for short-haul routes. Operating a 777 on the relatively short flight to “neighboring” countries like Jordan means either that Emirates offers less flexible schedules (all the passengers can fit on one flight!) or that Emirates’ true strategy is long-haul operations and that it uses large aircraft on smaller, less busy routes as a “side-gig”.
I wonder if they have a partnership with a smaller regional airline to serve short-haul routes..