Very interesting post, highlighting the main capabilities that allow Inditex to have a competitive advantage in a tough industry.
It is mentioned that low production costs are at the core of this advantage. In recent years, there have been a number of attacks against the Company, acusing it of abusive labor practices in developing countries. I would be curious about how much of Inditex low production costs are related to labor, and how its operating model will be impacted by rising wages in certain countries, or if it was pressured to improve working conditions/increasing salaries.
The article explains Kickstarter’s very interesting model, as it generates value for both, the creatives seeking funding sources and the funders looking for interesting projects to invest in.
However, I believe there is a big risk to its operating model that is seldom discussed. As the Company has no control over the way the projects funded through it are carried out, if these projects fail to meet the expectations set for them through Kickstarter, funders might turn to the Company feeling deceived. This has happened in the past on isolated products which have been delayed or even cancelled, as the creators’ companies went broke, not fulfilling its customer promise. If this was to become more widespread, I wonder what actions Kickstarter would take to control a downward spiral.
CT6000 and Aditya’s points are valid. Even more so as we try to understand the monetization model: most of the revenues will come from “serious” users who are willing to pay for a suscription. In all likelihood, these type of users will only invest their money in a site where they believe they are likely to find a long-term relation. If Tinder gets labeled as a “hook-up” app, the user base will be much more casual, as these users are likely to switch easily between competitors and unlikely to commit to a monthly suscription fee, thus losing its main revenue source, and risking to follow the fate of many apps that were unable to successfully monetize its business model.