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Margo
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Great writeup, Carol!
I had no idea that NB adopted a TPS-type system at its US factories, and I also was not aware that it has shifted to cell production in those factories. It’s pretty impressive how much the throughput time dropped for a single pair of shoes.
Thanks, Danielle!
I hadn’t realized REI “increasing membership base” (aka sell more co-op memberships) was such a large part of their operating strategy. Obviously the $20 per new membership is a great source of cash for a retail company with lots of overhead and a long cash conversion cycle. But is this strategy sustainable? I am concerned that that margins will continue to fall at large retailers like REI, and membership dividend payouts may put them in the red. Alternatively, REI may have a slow membership sales year and that will drive them to unprofitability. Thoughts?
Ashley! Great question! Reading Will’s post and your comment reminded me of the fact that both public and private rail can and do exist, but not in the US.
I traveled a lot in Europe this summer and found that part of what makes the EuroRail system work so well is the mix of public and private companies providing train service. My typical experience in Germany was choosing between a slower, less direct route typically run by the government or a more direct train run by a private company.
A key to this side-by-side model is infrastructure (rails, train cars, etc) that are functioning well. Things are on time and stay on time. The slow and the fast trains can live on the same system as long as each arrival and departure happens as scheduled. The lack of density along train routes in the US increases the cost of upkeep and might be one additional barrier to realizing public and private rail companies on the same tracks.
I would love to know more about how Lululemon executes its “Feedback Collection” with its “R&D Investment & Design Focus” team in Vancouver. It was certainly beyond the scope of this assignment, but I’m always looking for best-practices when it comes to collaboration between satellite locations (like Lulu Retail stores) and in-house design/R&D teams.
REI and LLBean had similar customer service “return anything anytime” policies, but REI recently shifted toward a one-year (vs lifetime) guarantee. I think the customer service piece is definitely key to LLBean’s operating model, as you write, and their Marketing VP also explains that it serves as some pretty great free advertising. What I’d like to understand is if and how they attempt to capture the value their customer service policies create, and how that compares to what competitors might be spending on traditional advertising.