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The history of fashion
The impact of fashion on society
The future of the fashion industry
Identify if your product has economies of scale.
When you scale your operation, does it get cheaper to produce it? For example, building a factory costs money up front, and the first couple of devices will reflect that. But, over time, it will become cheaper to produce because the cost of the building is spread out more.
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According to economist John List, the focus groups that teed up McDonald's decision to spend a fortune on launching the burger were flawed. The people who participated were McDonald's diehards and not representative of customers at large.
Instead, the company should have ve...
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When Uber attempted to raise the incomes of its drivers by increasing its base fares, it worked at first, but within six weeks, earnings fell back down to what they were.
The reason is that the opportunity of making more money on the app drew more people to drive for Uber, resulting in each...
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McDonald's erroneously used a focus group to convince themselves to roll out the Arch Deluxe.
It was indeed popular with a small group of loyal customers, but that was not the future target of the company.
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It is vital to evaluate if your initial success depends on unscalable ingredients.
For example, it would be a mistake to use ample resources to hire the best preschool teachers, then expect that their positive results would be replicated when the curricula they use was scal...
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There are five vital signs to consider when thinking about whether an idea, policy or product can scale.
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In 1996, McDonald's believed that the Arch Deluxe hamburger was the solution to their growth that had flatlined. The burger appealed to a new, older demographic. Extensive focus groups showed adults liked the burger, so the company invested a lot of money in rolling the burger out nationwide.
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An idea may look promising at first, but when it is rigorously tested, the results may fail to replicate.
If you find a good result in one area, it doesn't mean you should roll it out everywhere. First replicate it in that area to ensure it's a true result, then try it out in other markets....
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An ideal business model has network effects, low marginal costs, and scale economies.
Scale economies: the more you produce, the cheaper it gets. This builds up an automatic barrier to entry against competition and getting commoditized.
Technology products especially, and m...
The technological advancement over the past few decades has brought a highly competitive market. Consumers became increasingly more demanding, as they could easily compare prices and quality (reviews) of products. So companies had to adjust and produce better products to stan...
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