Balancing low cost with profitability is always hard, and I don’t think any business can do that without getting their operations right. In the case of Trader Joes, private labeling seems to be central to their strategy. It would be interesting to know, why TJ has been so successful at private labeling compared to others. Based on personal experience, it seems like they’ve been able to maintain the quality and broken the stereotype that private label stuff is cheap and poor quality.
Great job of organizing the key drivers of TJ’s success so succinctly!
Insightful article, Joe! The mismatch in demand and supply of electricity is a major challenge that the world faces. This challenge will become especially acute with more of the world’s electricity generation moving to low load factor sources such as solar and wind. Stem is an interesting play on that thesis. A few thoughts:
1) Do utilities get penalized by the grid operator for “overdrawing” and hindering grid frequency? If yes, then there is a potential for Stem to sell directly to utilities as well
2) Can (large) commercial customers buy electricity from generators directly bypassing the utility? In India, that is possible through “open access” i.e. a commercial customer pays the transmission company and the utility only for using their infrastructure. If that is possible in the US, then there is potentially a new business model that can be spun off based on that capability – selling only the analytics as a service and excluding the batteries
3) I think the ability to finance the batteries is an extremely important operating model tenet. So many innovations fail because the customers do not have the cash for an upfront purchase; financing overcomes that barrier.
Well articulated, Jess! I feel that getting users to input start/end points of the journey probably started off as booking mechanism, but over time, they added the layer of analytics to use historical information as a predictor of future demand. I have never used this service but I can see how this capability (operating model choice, in the context of TOM!) adds to convenience from the customer’s perspective. Simultaneously, it helps increase utilization enabling the company to keep ticket prices low and stay affordable.
On a side note, I wonder if city mass transit buses review customer demand to alter routes / launch new routes. If yes, how often?