The “no frills” flight was popularized by Southwest Airlines in the U.S. and subsequently by the likes of Ryan Air and easyjet in Europe. Low Cost Carriers or LCCs as they are known in the industry became possible due to reconfiguration of their operating model to lower cost, such as point-to-point flights, disembarking on the tarmac and not the gate, use of secondary airports for lower access fees, standard planes, cooperative and non-unionized employees, outsourcing to reduce fixed cost, simple offices, use of IT for efficiency, bypassing travel agency channel, and increasing asset utilization by adding more flights per day benefiting from faster turnaround time per flight.
Gone are the days when airlines would offer hot meals in local flights to economy passengers. Nowadays, it is customary for airlines to sell snacks as part of their effort to raise revenues, as they compete in a red ocean of low prices. Other airlines resort to reducing complimentary weight of bags, still others impose luggage fee, fees for changing flights, upgrade fees, or higher prices for seats that have bigger leg space or that can recline more, part of ancillary fees that are increasingly becoming popular among airlines. Other types of ancillary fees include seats for the obese (counted as two seats), early boarding, advance seat assignment, seat with infant, and the list keeps getting longer. Read more
There has been a growing interest in business model innovation (BMI). What exactly is BMI and how does one go about it?
Business model innovation is a new way the company creates and delivers value to a set of consumers and customers at a profit. For easier understanding, BMI has 3Vs and 4Cs.
The 3Vs refer to value creation (target market and value proposition), value capture (revenue model and cost) and value maneuvering (resources and processes, as well as value network), which all aim to attain superior economic value (profit and cash flow) for the firm.
Imagine a triangle with each of the 3Vs at each corner and their two elements mentioned above on each side. For the value proposition to reach its target market, the appropriate channel needs to be established. For the value proposition to reach sustainable revenue, customer bonding strategy is needed. A new configuration of process and resources may be needed to reduce cost, while complementors need to be identified in the value network to deliver the new value created. Read more
Innovation has two elements – novelty and commercial success. Novelty without commercial success is an invention. Commercial success without novelty is me-too. One tool in planning a novelty is applying the law of the opposite.
The law of the opposite states that in order to be successful, one should go in a direction that is in contrast from most others. And there are several models that have been testament to this.
The opposite of soda with lots of sugar is called Zero, hence attracting lapsed consumers. The opposite of a struggling learner is an intelligent one and Ahead Tutorial is targeting those who want to get ahead, the bigger segment of noncustomers, instead of those who are a little slow on the uptake, which is a much smaller segment. The opposite of boring is interesting and this is seen in the colorful and expressive characteristics of Belle de Jour Planners for career women who use printed planners to slow them down in their fast-paced lifestyle, instead of using digital alternative. The opposite of grading quality of answers is grading quality of questions, thus Markprof Foundation’s annual marketing leadership bootcamp for graduating university student leaders increase mindfulness of students on critical thinking by asking the right questions. Read more
About the same time last year, I was invited by the Financial Executives Institute of the Philippines (FINEX) at their annual conference held at Shangri-La at The Fort to share the learning and development innovations instituted by Mansmith and Fielders Inc. I was featured in ‘Learn to Rock’, the session on education and how this has sparked innovation and creativity together with Dr. Jikyeong Kang, President and Dean of the Asian Institute of Management, and Bro. Armin Luistro, President of the De La Salle Philippines who both had impressive ideas, as well.
It was my first presentation as the new Chief Innovation Strategist of Mansmith and Fielders Inc., and shared the 8 innovations where I was involved from formulation to launch.
1) From generalist to specialist
Most seminar companies are generalist, offering many different seminars. Mansmith and Fielders Inc decided to limit its offering to only marketing, sales, strategy, and innovation, with over 70 different courses, the widest in the world. This includes many seminars that are only available in Mansmith and Fielders. Check out its most extensive courses in www.mansmith.net
2) From product innovation to business model innovation
Mansmith and Fielders Inc is not just a learning institution, it is active in helping the marginalized. In fact, 100% of the proceeds from its marketing book sales go to charity. Read more
People who mourn for the loss of a loved one are typically not price-sensitive. They would spend more for a departed loved one than the budget they would have allocated for themselves. This is both good and bad. This is good in the sense that they pay final respects to the deceased. As author Dan Ariely pointed, the motivations that drive this behavior are “the way we want to think about the dead, their role in our lives, our role in their lives and the prospect of our own mortality” and purchase motivations that include “caring for others, helping, making amends, and finding meaning”. However, it can also be bad when the social benefit and meanings that go with it can be a huge financial burden to those who do not have the means.
While people design their lives by wanting to have a sense of control, they may also want to design death to give themselves and their families a sense of meaning, and the contentment that comes with it, even in unpleasant situations.
Four case studies of service innovation related to death are shared below. Read more
There are so many little things that corporate leaders ignore. Just take a look at the following industries and you can see many blind spots. Some examples of old truths that are still unchallenged to date are:
· In the retail banking industry, the idea still holds there can be no fun and enjoyable experience while inside a retail bank.
· In the supermarket industry, shoppers have no choice except to use carts.
· For the bicycle industry, the saddle is still a one piece thing, as it is modeled after a horse saddle.
· For men’s clothing, pants’ back pockets intended to hold wallets continue to be the norm even when they cause discomfort when sitting.
· In the mobile phone industry, many value-added services (VAS) continue to be incorporated when over 90% of existing VAS are not being used.
· For the HR practitioner, putting an age limit of 35 years old for salesmen when the more productive salespeople have greater connections and networks after age 35.
· In Philippine airports, queuing is still needed after check-in just to pay for terminal fees.
· In Congress, more and more proposed laws are churned out.
We can go on and on but the point is opportunities for innovation are everywhere. Blind spots happen due to lack of insight or new truths. This can be corrected when we increase our awareness, network with people with different backgrounds, and ask questions regularly that challenge conventional wisdom. Read more
Some people take too much time thinking about what to do that they almost always end up not doing anything. That’s what we call analysis paralysis. By the time they are done with data gathering and analysis, the opportunity may have been exploited or pre-empted by others and they will no longer be able to take advantage of opportunities. What is needed is a quick synthesis rather than a detailed analysis. Analysis is breaking up the whole into parts, including coming up with solutions to problems defined in scenario planning, while synthesis is assembling important facts together to come up with something new, or to offer new possibilities.
Begin with yourself. Ask yourself what problems or irritants do you have? Can these be converted into a business opportunity? In hospital care, Asian Hospital in the Philippines has a slimming spa offered to mothers who just gave birth, knowing they would want to return to their pre-maternity body figures, thus extending the relationship of the mothers with the hospital beyond just giving birth. Read more
Many companies, especially multinationals, like to talk about innovation. There are even some who include innovation as part of their core values; others even have innovation managers.
Innovation has two elements – novelty in the industry and commercial success. In other words, it’s about creating new value that benefits your intended market. Here are six anomalies that companies may want to reflect on and from here, redirect their state of innovation practices. Read More
Early this month, while vacationing in the US, my family and I watched Absinthe at Caesars Palace Hotel and O at the Bellagio Hotel in Las Vegas. It does seem like an odd choice of combination of shows but it was interesting for the comparisons and contrast of themes we experienced. We watched Absinthe because it was recommended by people online and we watched O because my wife Chiqui and I wanted our children to see what we consider the best Cirque du Soleil show, having watched it the first time some ten years ago.
O is a production of Cirque du Soleil, the group of street performers who banded together with the vision of seeing the world and became Canada’s best known talent group.
A look into their business model would show how Cirque differentiated and created a new market space. Before Cirque du Soleil, circuses used animals like elephants, tigers and monkeys to attract audiences. They ignored the cry of animal lovers whom they branded as whiners and troublemakers for holding placards and mini rallies, instead of trying to remedy their (non-customer) pain points.
Without animals, a significant sixty percent of total cost of a circus can be removed because there is no need for tons of food, insurance, trainers and real estate space for instance. Cirque du Soleil took advantage of this by creating a new idea — a circus with acrobats but without animals, where the novelty of having animals in the show was replaced by lights, sound, script and choreography.
“O” was a special show of Cirque du Soleil as it created a production number one notch higher than their usual shows via creating a pool at the center of the stage of Bellagio Hotel. This meant that the competency needed was not just of acrobats but acrobatic swimmers. The price charged by Cirque du Soleil is many times what regular circuses would charge and it is almost always full house. Read more
Many thanks to those who bought The WE Entrepreneur book (co-authored with Mansmith CEO, Chiqui Escareal-Go). For several months now, it is the no. 1 book on entrepreneurship at National Book Store as readers appreciate the 10 building blocks to entrepreneurial authenticity.
Reinforcing the market acceptance of The WE Entrepreneur and in celebration of both Mansmith and Fielders, Inc.’s 20th anniversary as well as my 25th anniversary as an entrepreneur, a social enterprise was launched last October 8, 2010, focusing on the educational and developmental needs of small and medium scale (SME) entrepreneurs, with unwavering support from Inquirer, BusinessWorld, Entrepreneur magazine, Go Negosyo, Malayan Insurance and the Abenson and Waltermart group, with many more institutional supports expected to come in as of press time.
A quick and practical four-question research gave us interesting insights about entrepreneurial education. Some of the responses we gathered ranged from existing entrepreneurial courses to be too long, too technical and too expensive, to being too academic. This led us to the formulation of a new training company for SME entrepreneurs called “Day 8 Business Academy, Inc.” and with this came a game changing four-point manifesto with the acronym 4Fs representing Freedom, Face, Frugality and Facilitation. The name Day 8 came from a biblical inspiration of new beginnings while the number 8 symbolizes prosperity for many businessmen. Read more