Win With The Unexpected

“Engage with the expected, win with the extraordinary.”  So recommended Sun Tzu, and it’s proven to be a winning formula for business as well.  The Japanese used it in the 1970s, when the expected was good gas mileage (for those of you under about 50, the Arab oil-exporting states shut off oil to the US in 1973 for a while and then quadrupled its price), and the unexpected was great quality and durability.

Today, the expected might be great gas mileage and quality, and the unexpected is sex appeal, as an article in Wednesday’s WSJ vividly illustrates.

“Gorgeous design costs no more than boring design,” says [head of Hyundai's US Operations, John] Krafcik.

There have always been exciting small cars — the BMW 3-series, for example — but Krafcik is talking about a Hyundai Elantra that retails for about $22,000.

“These are vehicles people are proud to own,” [Autonation CEO Mike Jackson] says.

Apple, of course, plays this game extremely well, also.


EYES ON THE ROADMAY 25, 2011
Auto Makers Sweeten the Recipe for Small Cars
Goodbye, Hand-Crank Windows and Hello, iPod Docks; Car Buyers’ Interest in Compacts Rises Along with Gas Prices

By JOSEPH B. WHITE

http://online.wsj.com/article/SB10001424052702304066504576343201704359810.html
(subscription required)

The cheap-looking, cramped, “econobox” car is dead.

Great time to start a bus line

Tomorrow I fly from Atlanta to LA, where I’ll be holding a seminar and giving a keynote at the Lean Software and Systems Conference 2011.

When I made the reservation, my wife and I were traveling the Southland looking for a place to retire.  But I had to fly from somewhere, so I chose Atlanta faute de mieux.

Well, as luck would have it, the right answer was Savannah.  Delta, in its down home customer-oriented way, said “No problem.”  We’ll fiddle with our computers for 30 seconds and reprogram you out of SAV (through ATL, of course) for a mere $800. Additional.

Or, I could buy a one-way, SAV-ATL, for $300, connect with my original reservation, and drive my second car (now in storage in Atlanta) back to Savannah.  I don’t know how far SAV is from ATL, but you can drive them easily in about 4 1/2 hours.  $300.

At this point, I decided to check Greyhound.  For $55, they took me from downtown Savannah, which is closer to my house than the airport, to ATL in that same 4 1/2 hours.   The bus had leather seats, free WiFi, and no charge to check a bag (which they hand you about 30 seconds after you get off the bus).  Left and arrived on time.

So the airline was charging six times as much to get me there maybe 2 hours earlier.

Obviously the number of routes where this trick will work is limited, perhaps to cities 300 or so miles apart.   But at least here in the East, there are a lot of those.  If the bus lines can keep their level of service up and their prices down, it’s going to be hard for airlines to hold on to that chunk of the business.  Ironically, the most successful US airline, Southwest, started not as competition for other airlines but for busses — short point-to-point routes at high frequency and low cost.

[Those of you familiar with Boyd's strategies may recognize a little cheng / ch'i here.]