Japanese automakers are heading towards 40% of the US market share based on reporting by WSJ and Nikkei Asia Review. Given the information, it seems reasonable to ask why US automakers do not do so well in the Japanese market. Alana Semuels, who does excellent reporting on business and society in the Atlantic Magazine, asks precisely that question: Why Aren’t U.S. Cars Popular in Japan? It is not due to tariffs. She finds that one possible reason is the high Quality of Service at Japanese dealerships which focus on Customer Lifetime Value (CLV) (providing services such as free servicing, pick up and return services, and individual attention, etc.) and the low investment of US Auto companies in dealership service networks in…
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Bloomberg has an excellent article on Retail Apocalypse, filled with some neat data visualizations, which I highly recommend. (Read the whole thing!) While media and political discussions have generally focused on the outsourcing of manufacturing jobs (e.g. Carrier, Rexnord, etc.) and the death of certain industries (coal, mining – which actually hire relatively fewer people than retail), I have always thought that there has been relatively little attention on Retail Jobs that have been lost in the past few years. For sure, Retail has been undergoing an accelerated sea-change due to the growth of e-commerce, historic suburban over-storing decisions, and the influence of changing customer tastes. However, at the heart of this crisis, is the loss of retail jobs and…
Leave a CommentIn analyzing Snap Spectacles, I discussed the value of early information, and argued how collecting early information is helpful. Production lead times for hardware products are long, and hence firms have to make huge commitments based on forecasts even before the demand starts trickling even as the product is being manufactured. Ideally, a firm would like its total production volume to match the final demand exactly. Being able to revise this production commitment can be a significant advantage. Even a small amount of initial demand can help correct orders or validate decisions with high confidence. Some recent data about VA 2017 elections from NY Times is useful in thinking about this problem in a different context. Below is a…
Leave a CommentThrough the Seattle Times, here is a clip on the history of Amazon Prime. Below, I discuss two points on scaling Prime services. Two Points on Scaling: Scaling Volume: Prime was clearly a way to scale revenues through the volume of transactions, even at a huge setup cost, by introducing a subscription plan. An issue with scaling revenues this way is the stickiness of prices. It took a whole nine years for Amazon to go from $79 to a more profitable fee of $99. (I thought they would be raised to $108 at $9 a month – closer to NetFlix rates – but the fees were stickier than I had thought). Scaling Speed: It is much harder to scale on…
Leave a Comment(Photo credit: Alamy, The Economist). The Economist (subscription) has a review of an upcoming biography of Joseph Conrad by Maya Jasanoff (The Dawn Watch: Joseph Conrad in a Global World. Penguin Press). The magazine calls Conrad the “First Novelist of Globalization”, which I think is quite accurate. Conrad, born in Ukraine, ran away to sea-faring at 16, landed in the UK at 21. He wrote about regions unfamiliar at the birth of globalization – South East Asia (in Lord Jim) and Belgian Congo (Into the Heart of Darkness, which inspired Apocalypse Now) – lands that stretched in the unknowns (compared to British Raj in India). Think of all the people writing about what AI means to the world, now. Conrad is…
Leave a CommentHere is the previous post on Amazon Key, which begins services on Nov 8 in about 37 cities. Many are skeptical about the usefulness or the need for the service. For instance, here is “I’m not ready for Amazon Key” on CNBC, and a dramatic narration (“I’d rather have porch pirates steal my sponges than let Amazon in my house“) of the trust-in-service path point that I made in my previous post on Amazon Key. Here is a Statista chart capturing the results of a poll: “How comfortable do you feel about guest access via smart locks?” (source: in the chart). Here is another chart through Morning Consult that gives some additional information on reception to the idea based on…
Leave a CommentIn 2014, Tech Crunch reported Amazon filing a patent for “Anticipatory Shipping”, i.e., getting the package ready for shipping even before a customer orders the package. The coverage on this issue has been minimal. Today, through a student (ht: PB), here is an article on Economist (subscription required) about German firm Otto using AI and machine-learning to purchase 200,000 items a month from third-party suppliers without any human intervention. The orders are made purely based on machine learning on 3 billion prior transactions and a variety of variables (weather, etc.). Two important factors stood out from the article. Customers are less likely to return if the product arrived within two days. Pre-shipping helps eliminate risks due to shipping delays. (There…
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