Introduction:
One of the clients was trying to develop Coffee percolator.
They started off bench marking against the current incumbent GE. Should it be
larger, faster, Etc. Author urged them to ask “Why do people drink coffee at
all?” Answer came: “Good taste!” Author would then pose a challenge asking what
are the factors that drive good taste?Answers started pouring
back - Beans Quality, Grain sizes, Water Quality and a host of other minor
drivers. Among them water quality made the most difference and most of the designers
assumed customers would use tap water. Hence, they went on to build an in-built
de-chlorinating function which greatly added to the taste of Coffee.
If you were to watch a tennis
match where wooden rackets are used, you will find it amusing , classical,
slow, interesting and so on. But the basic concepts will be the same. I got a
feeling similar to that when I read this classic. Basic concepts have remain
unchanged – and it is without standard words like “internet” or “social media”
etc – It was refreshing.
Author was a seasoned McKinsey consultant and was heading
Japan geography. He was consulting with many leading companies and hence the breath
of exposure is truly wide. Let me mention two interesting stories among many.
Five Finger Exercise:
Yamaha became world leader in Pianos with about 40% market
share. Alas, by that time, Piano market started declining at the rate of 10%
annually. So, what do you do? What can you do? Piano hasn’t changed much since
Mozart days. Making better pianos will not help and market for new pianos has a
very limited absorbing capacity. Low end of the market is already taken up by
South Korea.
Piano these days is more often an expensive piece of
furniture that sits idle, collects dust and almost always un-tuned. Many don’t
have time to learn piano. It takes a lot of effort and time to master it.
Yamaha reasoned the only way to create value to the customer is to add value to
the pianos that are already out there.
There are already about 40 Million pianos in the field. Yamaha worked
incredibly hard and developed an advanced product that can be added on to the
current ones at a cost of $2500. It was a very sophisticated, advanced
combination of optical and digital technologies that can distinguish between 92
different degrees of strength and speed of key touch from pianissimo to
fortissimo. Since the recording is digital each key stroke can be reproduced
and they can be stored in 3.5 inch floppy (remember it?). With just one retrofit like this, you invite
your friends and show case latest home entertainment. When Yamaha started
selling it in 1989, sales rocketed.
Brewing Wisdom:
This book deals with the then dominant markets, what author
refers as triad – Western Europe, USA
and Japan. Things have changed quite a bit since then. There are more additions
to the triad. Author talks about globalization and other Forex aspects in
detail that make a nice read. When I
read books that have extensive forecasts or some kind of “futuristic reports”, just
for fun I try to track how much has happened. It turns out that, even the best
& acclaimed folks have made forecast way off the mark. Author has
studiously avoided any such strong forecasts.
Mark Twain once quipped, “A classic is something that everybody wants to have read and nobody wants to read”.
I wanted to say it is a classic but since it risks not being read at all, I
would say good old book that ought to be read.
Before taking this book, I was wondering if I should pick such old one but I am
glad I did.
Thanks for reading this far.
Regards
madhu
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