Definitely my favorite toys as a child. Not to mention getting to visit Lego Land in Malaysia! Great insights, Sam. I was interested to read that they went back to the basics and reduced the number of different LEGO bricks produced. This makes perfect sense from an operations standpoint, especially if they were struggling financially due to the high costs of part creation from complex designs and lack of scale. However, if anything, when I look at a LEGO store today, I feel like I see a lot of complex pre-formed pieces that almost act as a piece of art rather than a building block. In addition, I see a large variety of pre-packaged sets, which would definitely increase distribution complexity. I would be interested to learn how this fits into the operating model that you describe and if it helps them to compete against the diverse variety of online and physical toy offerings today. I love the basics of LEGOs and hope that their operating model can continue to evolve to ensure their success!
Great post, Sofia. I love the cheaper fresh produce, breads, and wines offered at Trader Joe’s. It is very interesting to learn that they are able to offer this benefit to customers by streamlining distribution and limiting SKUs. I do wonder a bit about their business model though? Everything that you have pointed out definitely would drive lower costs and inspire customer loyalty. However, I find that there are also many specialized expensive products that are offered at Trader Joe’s, which is an interesting dichotomy. In addition, there are some Trader Joe’s private label products that are cheap, but not necessarily good quality (cereal products as one example). I really enjoyed your post and understanding the operating model behind their offering. Just curious to understand exactly what it is they are shooting for in their business model?
I was very interested to read both the negative and positive aspects of Megabus in your post. I agree that some of their lower cost operating model elements (multiple stops, reach) would help support their business model of being a low cost provider. In addition, providing additional amenities that appeal to consumers would help drive demand (e.g. wifi, frequent travel times, convenient and abundant stop locations). However, I wonder if you think there will come a time when their unreliability and cheap brand image will drive customers to competitors, such as other bus services or more expensive trains (less likely scenario, given the value proposition to their target customer market)? Maybe their focus on operational safety will be enough of a competitive advantage to support their business versus other bus services. Great read, Jennifer.
Very interesting read, John. Having experienced the success of Capital Bike Share in Washington D.C., I was curious to understand how the operating model in New York City might be different; the business models and pricing appear to be very similar considering they are both owned and operated by Motivate. Based on my read, it appears they have changed very little from city to city. I imagine that locations are extremely close together in New York City and many people are just trying to get from point A to point B. Conversely, in D.C., many tourists are stopping to look at monuments and end up paying more by regularly keeping bikes past the 30 minute threshold. In addition, tourists are going short distances in D.C. and are not necessarily riding in the rough, traffic congested streets, which would reduce the wear and tear on the bikes compared to NYC. Interesting to see that Motivate did not consider changes to the operating model based on location/city. For example, I would think they would want to more heavily consider locations for bike storage in NYC due to theft, vandalism, and traffic congestion to reduce the number of mal-functioning bikes. In addition, I would think they would want to consider bike types and functionality. Finally, the app works great in D.C., so if a popular stand is full, you can go to one nearby. I wonder if they considered just how many users would need to be supported in NYC or how close the stations are to each other.
Maybe they could offer discount coupons for single day rentals. It might be useful to increase the number of tourists and other users renting for the high revenue short trips. It would encourage locals to rent daily when relatives and friends are in town visiting.