No, these items wouldn’t be sold on sale to the end consumer, they are just purchased cheaply by the Dollarama buyers. On the shelf, before the addition of multiple price points, these items would have been sold at $1. Today, they would be sold at one of the seven existing price points in an every-day-low-prices model.
My impression, although this is open to interpretation, is that the company made a decision to shift their business model (due to margin pressures with inflation) and this decision necessitated a number of the changes to the operating model. While many of these changes would have been helpful anyway (POS and inventory management systems, specifically), it was really the shift to multiple price points that added urgency to implement these systems long after the rest of the retail industry had done so.
This is really interesting. I think its really common to read about the success of charter schools and hear that those models are not scalable because they require more per student funding than the school systems have today. Obviously that is a valid point, and it would not be possible to roll out longer school days (and smaller class sizes, which you didn’t mention in your piece but I do think is a feature of KIPP and other charter school models like Green Dot). That said, I was struck that three of the four features of the operating model that you called out don’t seem funding-dependent to me. It seems like traditional schools could do more to empower principals, engender a culture of high expectations, and make data-driven decisions. Supplementing these features with online remedial courses seems like it might be able to have a real impact.
TOMChallenge, to your question:
This piece reminds me a lot of the Facebook case and our thoughts on why Facebook was able to succeed where other social networks failed. In both cases, the company grew at the right speed, allowing them to scale their systems and infrastructure (agent network, working capital needs, and computer infrastructure in this case, only the latter in Facebook’s case) in a way that allowed for sustainable growth. Also similarly, the focus on the geography of the agents reminds me of how Facebook was able to increase their network effect and the marginal benefit of each incremental user by expanding to a few campuses at a time. I think a big piece of M-Pesa’s success has been this network effect. In the beginning, they built it effectively as they scaled, but now, similar to what we see with Facebook today, the scale that has been achieved and the associated power of the network effect serves as a barrier to entry to supplement any such barriers put in place by the Kenyan govt. In M-Pesa’s case, however, they are able to make the barrier even stronger by charging a higher price for transactions outside of the network (which is not a lever that Facebook had).
I love Gelsons! (though I only ever shopped at the one in the valley…).
I think their exclusive partnership with Wolfgang Puck is another great example. They partnered with Wolfgang Puck to offer prepared foods (salads, heat-in-the-oven pizzas, etc.) and in some stores had a small seating area and a Wolfgang Puck sign next to the Gelsons sign. I think this is an example of how a grocery store that does stock a high number of SKUs including every day national brand items is able to distinguoish itself from the competition. By choosing an iconic LA brand with a high-end reputation, Gelsons was able to reenforce their brand equity and reputation for high quality meat and produce.