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September 06, 2006
Apple, Amazon, Ford--It's All About Business Model Innovation.
Wow, the news is all about shifting paradigms and changing models, with Apple and Amazon seriously beginning to sell movie downloading services and Ford seriously beginning to get serious about remaking itself into a 21st century auto company. Apple and Amazon are pioneering into new business spaces while Ford, despite its ads about innovation, is catching up to Toyota and other rivals up with a new way of making cars that people crave.
Apple just announced a Sept. 12 announcement (it does that kind of thing successfully) and most folks expect Steve Jobs to do a movie iTunes/iPod unveiling. Of course, he could show off a new iPhone as well but betting is on the movies. The big question is the pricing of movie downloads and whether or not Jobs can get the studios, other than Disney, to join in. Jobs wants to keep pricing simple and he's right.
Amazon has its new Amazon Unbox and it will probably offer movie downloads that are more variable in price--which is what the studios want. Maybe it will work. It's all white space. But if it gets too complicated, or expensive, it won't.
Then there is Ford, which just breaks my heart. It turns out that betting so much on gas-guzzling SUVs and trucks meant betting the company. And even though Ford has some great technology, it isn't enough if its business model isn't right. One obvious conclusion is that no big corporation should ever rely so heavily on one or two products for so high a percentage of its revenues and profits. Always have other products/services that can be scaled up to meet fast changing markets. And please, respect the consumer. If you have an innovative brand, boast about it. Running ads that don't match reality simply don't work in this marketplace of brand-savvy customers.
If you have thoughts about the kind of business model that incoming CEO Alan Mulally could use to restart Ford, please send them in. Mulally was part of the team that turned Boeing around through drastic restructuring--and coming up with a hot new commercial jet. He's got to do it all over again--in an industry he's never worked in before.
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How new Ford CEO Mulally will save the company from Unsought Input
Ford is in trouble. Some new models are doing well, but all their gas guzzlers are in decline big time. So CEO Bill Ford has hired his own replacement - Alan Mulally, formerly of Boeing.
What can Mullaly do to turn the company around, and why was he ... [Read More]
Tracked on September 7, 2006 04:35 AM
Very interesting article!
Design a car is not like designing software. Software developpers can change immediately a feature in a software, a website, a service while automotive engineers are obliged to qualify each element, sub element and system separately. And later they have to qualify the integration results. And all these tasks take a lot of time. The big problem is the petrol's price which will increase year after year. It is absolutely sure that cars sales for models like Ford Ka or Ford fiesta will increase significantly in the future. But are the North American customers ready to jump to the European standards? And if not, how much time will it take until they accept this new way of thinking?
I have no idea about the US driver's psychology. Taxes on petrol in France exceed 500%
1 liter of petrol is about US$2.00, so drive a a genuine US car is simply crazy. Opel owned by General Motors sells cars like Opel Corsa or Opel Tigra and these cars are quite common in Europe. I don't believe that Ford has troubles to innovate. The problem is probably more connected to the market.
Posted by: Georges de Wailly at September 6, 2006 05:23 PM
I'm not sure about business model innovation, but I do think has picked exactly the right person to be CEO, and here’s why: the Boeing 787 Dreamliner. The Dreamliner is not just a new jet. It makes extensive use of advance carbon-fiber composite materials to make it lighter, stronger, and more efficient.
Ford needs something really innovative, not just more cup holders or higher, skinner windows. They need to build a car using similar composite materials and blow past everyone in terms of safety and fuel efficiency.
I've written a bit more on my blog.
Posted by: Jason from Unsought Input at September 7, 2006 05:07 AM
It's All About Business Model Innovation.I completly agreewith this afirmation. Innovation and design is the 2 best ways to succes in wathever market, with whatever solution....
Posted by: Jackpotato42 at September 7, 2006 05:41 PM
Ford has many market and cost factors, but deepest root cause problems are corporate culture and lack of globalness. Ford needs alliance to put it under the CONTROL of a global player like Honda. Align also with BMW to control PAG and influence Acura. Honda/BMW contribute corporate culture/values, innovation, quality and globalness. Ford contributes scale to the innovations. Resulting Honda/Ford/BMW combination is one of the few powerhouses that would make Toyota afraid.
Posted by: jim at September 8, 2006 05:17 PM
Ford has many market and cost problems, but the deepest root cause problems are corporate culture and lack of globalness.
• Ford needs alliance to put it under the CONTROL of a global player like Honda.
• Align also with BMW to control PAG and influence Acura.
• Honda/BMW contribute corporate culture/values, innovation, quality and globalness. Ford contributes scale to the innovations. Resulting Honda/Ford/BMW combination is one of the few powerhouses that would make Toyota afraid. Biggest inhibitor or enabler is Ford family control. If they are tired of this investment's performance and prospects, maybe they will give it up.
I would like to hear responses to this post.
Posted by: Jim at September 8, 2006 07:19 PM