Yes, Southwest was an inspiration for Michel O’Leary and he brought this “low-cost” airline concept from USA.
CEO has a pretty accurate quote about what you just said:
“MBA students come out with: ‘My staff is my most important asset.’ Bullshit. Staff is usually your biggest cost. We all employ some lazy bastards who needs a kick up the backside, but no one can bring themselves to admit it.”
I do not agree with that, but it shows how much pressure is put on decreasing the costs, including salaries.
I agree that long-haul low-cost flights will be difficult, but I believe that in perspective of 5-10 years they would be possible. Naturally, there would be few “$10” tickets, but bringing the fare down by 20-30% from current carriers might be possible e.g. through lower quality/no food, paid drinks, less space between the seats etc., (on top of the current levers like more effective service on the airport, which impact will be reduced as the planes will spend less time on the airports and more time in the air).
I truly believe that Micheal O’Leary will come up with creative ways to get more money from the customers – his newest ideas like paid restrooms in the plane or “standing seats” (http://news.bbc.co.uk/2/hi/8779388.stm) might be a marketing move to bring attention to Ryanair and low prices, but show the direction in which the company is going.
On the other hand, Ryanair has realized that in some cities, clients would rather pay premium (e.g. 10 USD more) for landing in the major airport instead of the small airport 100 km+ from the city center and is revising its strategy to take it into consideration.
Great post – thanks for that!
I was curious about couple of things:
1) You wrote about using cheap labor – did it have negative impact on sales? Have they changed anything about it or it is still the same?
2) What are Nike’s plans in wearables segment – they used to be a leader with Nike FuelBand but now as the market is growing, they are losing to FitBit, Jawbone etc.
Wow, this looks impressive (and delicious!)
Quick question on CoCo growth model:
1) They are growing really fast – do you think that keeping the growth in such a fast pace and in various geographies is sustainable? Do they manage to keep the quality on new markets as high as in original market?
2) Do you think there is a risk that “bubble tea” might be just a “cool” thing for few years in new markets and than people will get bored or this will be as stable as tea or coffee? How long has bubble tea been present in Taiwan – has Coco invented it in 1997?
This looks like a great idea, but I have few questions:
1) How well are they doing in terms of market share? Who is their target group? (as I imagine older people/living in rural areas will not be convinced as they are no physical branches)
2) What is their marketing strategy to acquire new customers?
Thanks for the post!
I agree that H&M is one of the most effective retailers globally, but I would be interested, how based on you experience, would you compare them to Zara. Zara is famous of hyper-efficient supply chain and ability to deliver new garments to the stores twice a week. On top of that, Zara adapts couture designs, manufactures, distributes, and retails clothes within 2 weeks of the original design first appearing on catwalks, what seems really fast!
Do you know Zara’s supply chain compares to H&M and what is the lead time in H&M? Furthermore, Zara is producing over 85% of their apparel in their own factories – why do you think H&M is outsourcing the production?