I also believe Nike is a great example for this assignment because their main value proposition, which is innovation to the customer, forces them to upgrade their operating models every time they make drastic changes to their product line. And in this case, it was fascinating to read how they managed to decrease their labor costs with computerized processes. The decrease in materials and labor costs increases the company margins and probably leaves them more space to innovate – R&D costs.
That’s a very interesting piece Yigit!
Mainly due to two reasons:
– First of all, it provides a good perspective to understand corporations outside the US and Europe, and to internalize their problems and how they respond to it in a global economy.
– Next, it’s very useful to see that companies do not only revisit their operating models when they change their business models, but they also need to align their operating models when external factors (i.e. regulations, customer demographics, competition) change as well.
I loved your piece! I also agree with the fact that Chipotle is a very successful company, in which a lean operating model meets the essentials of a simplistic and premium business model.
One of my favorite points in your post was that Chipotle refusing to add low risk, high margin items to their menu. In my opinion, this helped both their customer branding and also their inventory costs. Keeping their menu simple with limited ingredients eliminated “waste” and prevented the need for refrigerators. Also, a focused, simple menu helped customers to identify Chipotle brand with premium Mexican cuisine.