Stories and Strategies from Real Life: 9/16/16

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Some of the best learning happens when you read stories about real people and real companies. Read them for ideas, for lessons, and inspiration. This week’s stories and strategies from real life are about Kroger, AirBnB, Alessi, Netflix, and Apple.

From David Merrefield: Kroger’s Private Recipe

“For a while now, Kroger has posted what is doubtless the best financial record of any conventional supermarket company. Check out these metrics: For 49 quarters in a row, it has registered increases in identical-store sales, excluding fuel. For the same period, it posted an unbroken chain of market-share increases—and for a full decade, has delivered double-digit compound increases in shareholder dividends. With 431,000 employees, Kroger is the third-largest employer in the nation, after Walmart and UPS. It is a force to be reckoned with.”

From Gijs van Wulfen: Innovation Lessons from the Troublesome Start of AIRBNB

“What began as a simple idea to earn some extra income and help out travelers from out-of-town eventually took off globally. AirBnB started in 2007 and is valued now at over $ 25 billion. There are at least 3 important lessons learned from its troublesome start. Here’s their story.”

From Heinrich Greve: How Alessi Merged Manufacturing and Art

“I don’t want to get too personal, but I am tempted to suggest that you own some product or products made by Alessi – products that make you feel vaguely artistic and unique even though they are mass-produced and sold to millions of people. If you are familiar with the history of Alessi, you already know that this nearly century-old company has come quite far from its industrial beginnings as the top supplier of stainless-steel serving equipment to Italy’s professional kitchens. Alessi’s transformation commenced in the mid-20th century but kicked into high gear when Alberto Alessi, the founder’s grandson, assumed control of product development in 1970. Alberto dreamt of becoming an architect, but his father demanded that he join the family business instead. It is widely believed that his thwarted artistic ambitions were behind his decision to pull the venerable firm into a whole new market.”

From Ken Favaro: Lessons from the Strategy Crisis at Netflix

“In reality, however, Netflix is facing an existential strategy crisis much like the one it faced in 2007–10, when its original DVD rental business became obsolete. To be sure, Netflix is the leader of the next big thing in distributing entertainment. Just as broadcasting beat radio in the 1940s and ’50s and as cable defeated broadcasting in the 1970s and ’80s, streaming now looks poised to dominate both. Cable providers have lost several million subscribers in the last five years. Total U.S. TV viewing time fell 3 percent in 2015, with half of that decline directly attributable to Netflix and viewers’ binge-watching habits. If streaming is winning and if Netflix is the most likely winner in streaming, shouldn’t Netflix be a reliable profit generator sometime in the future, as ABC, NBC, and CBS are today in broadcast TV and Comcast is in cable? The stock price says yes. But without a big strategy change, the answer is more likely no.”

From Ben Thompson: Beyond the iPhone

“It has been clear for many years that the threat to iPhone growth was not modular Android but the iPhones people already have. The hope with last year’s iPhone 6S launch was that new features like 3D Touch and Live Photos would be compelling enough to drive upgrades, but it turned out that many would-be upgraders had already bought the iPhone 6 and the rest didn’t care; the result was the first iPhone that sold less than a previous model.”

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