Hi Aaron, really great post that I think clearly highlights a well-thought of business / operational model relationship. Following on the above post, what do you think are the other key risks that SWA faces? Lower maintenance costs and efficiencies in turnaround times are key success factors but as you mention above, the 737 Maxes would likely require significant changes. In times of cheap fuel and more efficient competitors, how would SWA maintain its relative cost advantage and value proposition? I wonder if SWA is somewhat positioned between the ultra low cost players and the increasingly more efficient larger players and is thus likely to be squeezed and forced to make changes to its model.
Alula, Nice post – giving us a failure story!
I think you post highlights the importance of leaders with foresight and then courage of conviction. I know this may not necessarily be a TOM comment but RadioShack was successful. It seemed to have had the business and operational model in sync. They clearly identified what their target market wanted and via their multiple stores gave them numerous access points to purchase their products. But what is clear to me from this and in general is that in especially fast moving industries such as technology, business models and operating models need to change and react to movements in customer preferences.They need to be updated to capture value. I wonder why didn’t they react sooner?! Maybe just maybe, there are always going to be losers in business…
Nice post Janine. Like that you exposing us to smaller cool companies.
So just a quick comment from me.
It seems to me from the post that the distribution model is a key success factor. It would great to get some more insight into why you think that their specific distribution model is able to extract savings. One would assume that the mere fact that they source globally and have high quality standards would mean that they would require a larger sourcing/quality control team? The savings aspects that you speak of and the fact that they pass it to the end-consumers is a key value creation point in my view.
Also, their stock out model is quite interesting – the feedback loop is a nifty operational adjunct. It would be great to better understand the turnaround time for the updated inventory and their volumes and prices (perhaps increased prices given that their is a baseline demand?). I would assume that quick turnaround would be especially important for (1) more fashionable (trend linked) clothing items and (2) the more demand (and attention) elastic millennial target market. Given it’s stage of development, I would think Evercore’s ability to sustain long-term interest (and demand) by their target customers is a critical aspect of their business model.