Mike Bechek

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Dorman Products: The First To Find Fault
Mike Bechek
Last modified on December 7, 2015 at 11:50 pm
The company that knows what's wrong with your car before you do.

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On December 13, 2015, Mike Bechek commented on JetBlue Mint: Disrupting the Equilibrium for a Low Cost Carrier :

This is a super interesting development to study and a great example of how a seemingly small operational choice could potentially be seen as a radical strategic change. I am inclined to agree with your conclusion that, where JetBlue has Mint, it’s basically now a traditional airline, since single-class planes are one of the main distinguishing elements of LCCs.

The facts suggest JetBlue is adding this to be competitive on routes with a lot of premium passengers (which I would have actually guessed is a pretty high percentage of its route-map). If it maintains the single-class plane structure in other areas of its operations, is it almost two separate airlines? How much operational complexity and overhead inefficiencies are they signing up for with a choice like this? Do they further bifurcate their two concepts, perhaps going full Southwest on some routes and making Mint the luxury equal of a United on a cross-country flight?

On December 13, 2015, Mike Bechek commented on IKEA: High End Design for All :

Nice post, Damon. Obviously this is a very unique company–interesting to read some of the detail about how it works.

One of the other neat operational choices IKEA seems to make — based on first-hand observation, at least — is with their real estate. Not only is the shopping experience super unique — particularly in that shoppers pull their selections directly off the warehouse shelves after browsing the showrooms — but the very selection of the site seems directly related to the supply chain. I’m thinking in particular of stores in Red Hook, Brooklyn — where a boat could travel directly from Sweden, if needed — and in New Haven, which is both on the water and on a major interstate.

On December 13, 2015, Mike Bechek commented on Bear Stearns: Gone in 60 Seconds :

Great analysis, Alex. I couldn’t agree more than capital structure is often a key part of the business model (especially, though surely not exclusively, for financials) and has to match the operating model.

Seems to me that Bear had a couple of problems. Not only, as you point out, did it have a duration-matching problem, but also a risk-matching problem. That is, the very same things that decreased the value of Bear’s assets (i.e. an implosion of the mortgage and other credit markets) would also have been likely — as in fact happened — to cause lenders to the repo funding that kept Bear afloat.