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MLJ
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Kohei, thanks for giving me a heads up about this post when we ran into each other the other day; I really enjoyed reading about this business I’d never heard of before!
A few questions:
(1) How are Nitori and IKEA perceived differently in Japan? How does that factor into the performance of their businesses in the region? I ask because at HBS, I’d guess IKEA is known as the poster-child of many of the business/operating practices that you discuss, yet in Japan, Nitori has achieved a much stronger market position. How much do you think this has to do with different and potentially superior business/operating models (e.g. the focus on interior goods rather than furniture) versus localization/home-team and first-mover advantages? If it is the former, how feasible do you think it would be for Nitori to expand its business to and win in other regions?(2) How have you found the experience of using Nitori’s logistics services? How often did you use the in-house service versus third-party logistics specialists? Is there a meaningful cost differential to the end consumer?
Thanks again for sharing! If you happen to have any Nitori products in Boston, I’d love to swing by and check them out at some point!! ๐
Thanks Trang! This was an interesting and thoughtful analysis of a superior business and operating model that should continue to spread through and disrupt the transportation industry.
A couple questions come to mind:
(1) How much of this model can and cannot be replicated by competitors? For example, curbside pickup instead of bus terminals as a cost-saving measure seems like a no-brainer, but (a) why can’t existing competitors and new entrants do the same thing? (is there a regulatory + space constraint?), and (b) as boltbus scales up, will it have to eventually build out its own terminals if it has enough transportation volume? Can the same replicability be said for the boarding process and the pricing scheme?(2) How much of this seemingly lower pricing scheme is actually growing the revenue/profit pie (lower per unit price offset by even more volume –> more revenue) rather than shrinking the pie while allowing boltbus to take share? If it is the latter, then how sustainable is profit/share capture by one particular firm, especially if competitive advantages not sustainable (i.e. can be replicated by other firms)?
In the long-run, it seems that these changes are providing greater value to end consumers and making bus transit more affordable and comfortable, but perhaps any capital providers to these companies should not expect an attractive financial return.