Very cool!! Thanks for explaining the uniqueness of this model, Patrick =)
In N Out’s operational decisions, like offering a limited menu and treating their employees well, reminded me a lot of the Benihana model. Decreasing SKUs allows the company to minimize variability, allowing for a consistent customer experience. They probably also get great prices from their suppliers and are able to manage their limited inventory effectively. One question–if the business and operating model is so compelling, what accounts for the fact that In-N-Out has not scaled throughout the US?
Ian- Thank you for providing this detailed perspective on the operations of ISIS. Most of the Western media coverage is focused on the organization’s military rule, so I did not know much about the governance system and the financial underpinning of this operation. Obviously, the ability of this model to “scale” is a real concern and I wonder to what extent cutting off the main revenue stream of ISIS is a priority of international powers involved in this region.
I have always wondered what makes Zara successful–so much so that Amancio Ortega, founding chairman of the Inditex Fashion group, is the fourth richest person in the world! It sounds like supply chain and distribution are key facets of the company’s success. I didn’t know that Zara places orders twice a week and picks new designs throughout the season. That’s a really interesting choice and such a contrast to many other retailers, including Nic+Zoe (even though they picked all designs at the beginning of the season, they still had trouble getting items delivered on time!). I’m still not sure that I understand the secret sauce that enables Zara to achieve such operational efficiency in their distribution system, compared to other retailers. I wonder whether H&M, Forever21, and others are trying to replicate this system and if so, whether they will be real threats to Zara. On the other hand, I think Zara’s brand equity is remarkable and will probably enable the company to stick around in the uber-competitive landscape of fast fashion.
Warby Parker is a fascinating business and I am impressed by its growth. I think the company is thriving because we live in a world where self-expression and customization are king (I am, of-course, referring primarily to the developed world). Warby Parker’s business model enables finer customer segmentation since people are able to design the exact product that they want, which inherently leads to higher customer willingness-to-pay. One thing that bothers me is the social mission of “buy-a-pair, give-a-pair”. I hadn’t thought much about this model until I watched a documentary that highlighted the negative impact of TOMS shoes in poor countries. The idea is summarized by the adage “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” Giving away glasses (or shoes) may put local mom&pop shops out of business, because they can never compete with a free product. Further, it reinforces a view that people in poor countries are constantly in need of western aid and subtly promotes a culture of dependency in these places, which can have long-term negative consequences. I am not implying that all humanitarian aid is categorically bad. And there may be an argument that glasses are different than shoes or other products. But I feel this “Do Good” model requires a deeper understanding of the psychosocial and economic impact (both positive and negative) on communities in the developing world, which, by definition, are trying to develop their own sustainable businesses and economies.
Very interesting! In conflict-ridden areas, it is extremely hard to sustain a business, especially a start-up. I am impressed by Roshan’s ability to leverage the local community and existing players, like local trade networks, in its operating model. I love that they focused on non-profit initiatives for children, which not only have a positive social impact, but also generate great PR for the firm. In addition, it sounds like human capital plays a key role in Roshan’s success. This reminded me of India’s ITC eChoupal, where local leaders are hired and the company provides all the necessary training to develop these individuals. The direct and indirect benefits to customers help weave Roshan into the fabric of the community. I would also be curious to know if Roshan established any political connections or provided “facilitation payments”, in order to grow their business.