The problem with “profit driven” is that it reduces motives to a lowest common denominator. Short term profit? Long term profit? Brand value that can be leveraged later?
Costco, specifically, I have a good story about. Jim Sinegal spoke at my MBA program, and he talked about when they were starting and the challenge was a value prop of “buy bulk, lower cost” contrasted with bulk actually being more expensive than small quantities, therefore needing to target higher incomes.
Part of the solution: wider parking spaces. Make people feel like their expensive cars are safer, it’s easier to get in and out of the car (especially for older people, who have more wealth), and differentiate from typical stores.
Now, you tell me: would you be just as happy with cramped parking spaces because the larger ones are profit-driven? Does motive even matter here?
Costco has a policy to cap margins at 14% or something to that order. And it's disciplined enough that it's broken off with major brands that tried to dispute this.
It's profit driven in its own way, but against the grain of modern corporate strategy.
The problem with “profit driven” is that it reduces motives to a lowest common denominator. Short term profit? Long term profit? Brand value that can be leveraged later?
Costco, specifically, I have a good story about. Jim Sinegal spoke at my MBA program, and he talked about when they were starting and the challenge was a value prop of “buy bulk, lower cost” contrasted with bulk actually being more expensive than small quantities, therefore needing to target higher incomes.
Part of the solution: wider parking spaces. Make people feel like their expensive cars are safer, it’s easier to get in and out of the car (especially for older people, who have more wealth), and differentiate from typical stores.
Now, you tell me: would you be just as happy with cramped parking spaces because the larger ones are profit-driven? Does motive even matter here?
Costco has a policy to cap margins at 14% or something to that order. And it's disciplined enough that it's broken off with major brands that tried to dispute this.
It's profit driven in its own way, but against the grain of modern corporate strategy.