I talked to the President & Founder. She said the availability of ingredients that meet their standards is their #1 challenge to growth. For instance, they use some 40K eggs per year. Adding a store in central Indiana requires a minimum of 18 months lead time for their best egg producers. Adding a store in a new geography requires the establishment of a new relationship plus a similar or longer lead time.
Thanks for the post Scott and great job. I, as you said, was also under the misunderstanding that steel was a fully commoditized product. It was really interesting to learn about the different alloys, coatings, etc. I wonder, however, if the large capitalization strategy is more of a risk than an advantage for the company. If steel manufacturers can greatly benefit from process R&D and new product innovation, is a heavy-capitalized steel mill best positioned to implement these new advances or will AM be disadvantaged versus the mini-mill strategy that Nucor and others have adopted?
Interesting idea but not necessary a novel one. Do you have experience with other consulting firms who use a similar model to what you proposed? Are they more or less successful?
Last year, I worked with The Boston Consulting Firm’s healthcare practice on a Research & Development benchmarking project. Their industry experience was invaluable in gathering relevant and accurate data about our competitors…a point for your proposal. However, not every project requires industry expertise. I have also hired consultants to bring cross-industry best practices to my company’s operations, such system and organization design. Would restructuring the operating model eliminate their ability to win these type of projects?
After posting I found a video that might shed some additional light on Patachou’s menu and restaurant atmosphere: https://youtu.be/CQOODa3xTc4
The financial results are quite compelling, but it isn’t clear to me how hand-crafted and labor-intensive operating models create a higher quality product. Have you considered that the rapid pace of new product innovation at the firm requires investment in flexible resources, such as high-quality human capital versus investing in capital intensive automated manufacturing? Will the firm be disadvantaged in the future when innovations in automated manufacturing allow a higher degree of new product innovation? Or will the firm’s high gross margin insulate it from this pressure?
Great job! Great company! Thanks for posting.