Love this post SR. Admittedly know very little about blowouts but definitely see tons of potential here. This is almost like the Benihana of blow drying. It seems as though their ability to win over customers and offer a high quality experience comes from some of the very same operational tweaks that we saw in our very first case. By reducing the number of “menu items” they have cut down wait times and variability driving efficiency gains for both company and consumer. To that end this expansion plan seems like a deviation from the operating and business model that’s already so well aligned. Right now everything seems pretty streamlined with solid labor utilization and great scheduling practices. My worry is that this new service which introduces new travel logistics and potential new scheduling headaches could be causing more harm than good. I really think their current product suite is well tailored to their operations and any new projects going forward should complement, not complicate their business model.
Great post Sijia I think it’s an interesting and effective business model for an increasingly crowded space. I think you got it just right when you brought up their need to constantly innovate in order to create a sustainable competitive advantage over their peers. Right now it seems as though one of their major levers in creating value to hotels vs OTAs is their ability to charge less in fees. From a competitive landscape perspective that makes me a bit nervous as the minimum barriers to entry could quickly lead to a race to the bottom as competition increases. It will be interesting to monitor how this business and operating model evolves as they continue to grow. Can they realistically compete with OTAs if they expand their offerings further beyond one-night bookings and what will the competitive response be if and when they pick up market share.