Nice job! This post highlights the complex challenge of how to effectively scale a small businesses whose customer value proposition is directly linked to its size (i.e., low production volume and scarce availability) and whose operating model is tailored to support that value proposition (i.e., high-touch and hyper-local). If The Alchemist has growth aspirations for Heady Topper, it will be interesting to see what pieces of the current operating model the brewery decides to sacrifice to achieve them. I have a hunch that maintaining in-house distribution (for both legal and logistical reasons) and only holding 3-weeks of work-in-process inventory will tough to uphold as the geographic footprints expands. As well, it is hard to predict how customer will react to additional Heady Topper expansion. In a highly fragmented craft beer market, The Alchemist has nonetheless carved out a gold-standard reputation for quality, and I worry they even a small move towards more mass production will put that brand equity in jeopardy.
Thanks for this post! TaskRabbit is a great example of a company shifting their operating model to more effectively support the value that their business model attempts to create. For me, TaskRabbit’s operating model change also illustrates the benefits of an iterative approach where a company is continuously refined through design thinking (i.e., divergence and convergence). By starting with an unlimited universe of potential tasks (i.e., divergence), TaskRabbit was able to collect data on which tasks were the key value drivers for the business (e.g., highest demand, most profitable, easiest to manage internally, etc.). From there, TaskRabbit could converge on the handful of highest value tasks (in this case: handyman, housecleaning, moving, and personal assistance) and refine their business and operating models accordingly. Going forward, it will be interesting to watch if the company enters another period of divergence in pursuit of additional task lines to drive future growth.
Great work! This post nicely illustrates the consequences of a company failing to effectively alter its business and operating models to meet the needs of a changing marketplace. Despite drastically declining mail volumes, USPS has been squeezed by obligations to maintain its business model (i.e., delivering to every citizen six-days per week) and its many aspects of its operating model (i.e., number of employees and facilities, pre-funding retiree benefits). As the poor performance continues, I wonder what actions, if any, will be afforded to USPS in hopes of preserving the profitability of the business. A few potential ones that come to mind are:
– First class postage price increases above CPI
– Exigent price increases on direct mail
– A three-day per week delivery model where half of a neighborhood receives mail Monday/Wednesday/Friday and the other half receives on Tuesday/Thursday/Saturday
– Centralized delivery points rather than curbside/door delivery
– Post office consolidation