Professor Elam

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KISS

LoganNo I am   not going intimate in this Blog.  KISS is the acronym for Keep it simple stupid.  No I am not referring to my class or any reader as stupid but to industry insiders.  Page B1 of the Wed 10/4/06 WSJ features an article on the Logan , Renault’s surprise hit simple auto.  The Logan is intentionally a plain jane 90 bhp, roll up the windows by hand, car.  It sold 145,000 copies last year not only in  Eastern Europe but in Western Europe as well.

My point is this.  In my lifetime it is amazing how many businesses let themselves go up market, forgetting their original base, and then allow someone to come in underneath them. For example. in discount retailing we have gone from Sears to Woolco to K Mart to Wal Mart and then when no one thought anyone had a better idea, Dollar General.  Pizza chains are much the same. Pizza Hut gave way to Domino’s to Papa John’s and now Little Caesar’s holds sway on the bottom rung.  Toyota’s first big success was a 1972 Logan called the Corolla.  Toyota still makes the Corolla but it’s all gussied up with power this and that.  The emerging markets for cars are in countries where folks are moving from motorcycles and bicycles to cars-Eastern Europe and India for example. 

I was at the career fair at University of Dallas this week.  Interestingly there was company in the fast food business I was unfamiliar with.  Check out Cane’s .  Their simple concept is cooking chicken finger meals.  The guy with the concept was told it would never work.  Ten years later and with fifty stores that seem to succeed around college campuses, they are on campus recruiting. 

There is a lot to be said for simple. The Model T, the Model A, the Logan, the iPod, the slide rule,
sandals, Wal Mart, Whataburger, bicycles,   enduring designs that work.  Can you think of a simpler way to do something, hey you might be on to an entrepreneur idea.

DLE

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3 responses to “KISS”

  1. Michelle Wågsjö Avatar
    Michelle Wågsjö

    One car that I wished that the US would mass import is the Smart Car (can be seen all throughout EU, S.America). This car is extremely inexpensive, excellent gas milage, and small. If everyone in the US drove one, this would cut traffic hour into 30 minutes (haha), double the size of parking availability in parking lots, reduce consumption of gas, for example. I do truly believe that high gas prices will, say over a span of 10 years, will be an incentive for more focus of funding for more nifty designs for economical cars, and a motive to redirect consumer behaviour. I want the high gas prices to return! I think also that we need car tax like they have in England, for example. This could also help change consumer behaviour and help the market for economically and environmentally friendly auto makers.

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  2. Guadalupe Barraza Avatar
    Guadalupe Barraza

    Well, I must say that I had a quick reaction, at first, when I read Michelle’s comment. This being because I have four children, and it would be a heck of time for my husband and I to try to squeeze all six of us in one of these small cars. We would be the next clown act at the circus. However, I can say that from experience the high gas prices have made us wiser consumers and a better family al together. It’s been easier to pass on extra curricular activities when we consider how much money it takes us to fill up our suburban. We’ve choosen to wait on that second car and found that quality time at home together has improved our family relationship. Our future purchase decisions have been affected and hopefully the ones of our children, since we have had to explain why it is we would rather join Netflix and get a movie delivered then make our by monthly trip to the Cinemark.

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  3. Dennis Elam Avatar
    Dennis Elam

    I read that one of the GM execs made the comment at the Paris Auto Show that small cars were here to stay. I think this last run up in gas prices convinced everyone that the days of cheap gas are over and that market is subject to wild fluctuations. Guadalupe’s comment about going to the store has been reflected in retail store stock prices falling when gas went up only to have them rebound as they are now doing when gas prices fall. Interesting remark about netflix and of course more people are shopping for music at iTunes which means they don’t leave the house either and you can buy the movie online or subscribe to your favorite sports channel. Given the time it takes to download a movie I don’t think that will catch on as the iTune music has which is much faster.

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