So we've been looking at these different strategies and we've made the argument that there's room for success and in the industry or sector by undertaking one of these strategies, but not trying to do two things at the same time. Because again, it's very difficult to do both at the same time. If you are a company like Chuck E Cheese, we saw last time, it's hard to brand yourself as a company that's achieving a premium, high-end, differentiated experience while also appealing to the masses and providing a more basic or entry level experience to the customer. And so it just isn't very wise to try to do both. Having said that, there are a few examples of companies that do successfully seem to undertake both strategies at the same time, or perhaps better said, they provide elements of both strategies at the same time. Let me try to give you two or three examples. I mentioned to you earlier the pizza company, Little Caesars. Little Caesars, again, is a company that's been around for, since the late 1970s, and has had this strategy of focusing on the basic pizza market. They're not seeking to provide an expensive premium experience. They're trying to satisfy the average customer of pizza. What most people will accept is good pizza, not necessarily the most exotic pizza. Well, when you buy pizza, or you consume pizza, you have this whole experience, correct? For example, you need to place an order. You need to go on an application and make an order. You need to make a phone call. And so, you need to plan, you need to think, I'm going to order a pizza. I'm going to go pick it up, or have it delivered, and I'm going to pay for that delivery, which is convenient to have someone bring the pizza to your home, but you're going to have to pay for that. But the waiting is something that Is a cost. You might want the pizza now, but it's not ready, and so you're going to have to wait. A more premium experience, a more differentiated experience, would be to reduce the time, and the planning, and the work involved in ordering and receiving your pizza. And so Little Caesars, while offering a pizza for $5 has undertaken a strategy called Hot-N-Ready. You may have seen that in your own country if Little Caesars is there. And basically what they're selling with Hot-N-Ready is low price, acceptable quality pizza for the average consumer. But they're also selling convenience, which is something that most of us will pay extra for. A convenience-oriented company usually can charge more for being in the right place at the right time. And so what they're selling with Hot-N-Ready is that they've got these pizzas that are always ready, and you walk into the store without thinking, having planned ahead of time. You just see the store, stop, walk in, the pizza's ready and it's hot and still fresh to an acceptable level. And you're done with the transaction, you can go home and eat it. And so that's something that most of the time, people would pay extra for. So that's an example of a company that's achieving a low-cost leader position. But also, wrapped up in the product is some differentiated factor that we would pay extra for under most cases. Or would be required to pay extra for. Another example, another US based company, I apologize, Southwest Airlines is a company that has existed also since the 1970s in the United States. They're beginning to expand internationally, so some of you may start to see Southwest Airlines in your local market. But, Southwest has undertaken a very different strategy from most of it's competitors for many years. For one example, they do not assign seats to the customer. They allow you to choose where you sit. They have been focused in terms of their internal strategy that most of us don't see on finding cost drivers in the airline industry and trying to keep costs very low so that they can sell you a ticket for a very low price. In fact, their strategy from the beginning was to make it so that air travel was as inexpensive as traveling on a bus. And so you probably have low-cost airlines in your country, or if you don't, if regulations change, you may see them in the future. Well, Southwest did a lot of things to be a low-cost leader. For example, they only had one type of airplane. And that made it very inexpensive for mechanical work, maintenance. It made it very easy for pilots, because there was only one type of plane. That kept costs down. They also have a culture and a tradition of being a very fun airline. If you fly on one of their planes, you'll find that their employees tend to be, generally, more friendly. They tend to joke, they tend to have fun, and they tend to make the flying experience a little bit better. They've also done a great job, historically, of arriving on time compared to their competitors, and done a better job of keeping your luggage or your belongings where it should be and not losing them. What is the point of bringing up all of that? Well I told you they've done all these things to keep costs low, like having one type of airplane, and not assigning seats also helps them simplify things and keep costs low. But they also do a great job at adding value through uniqueness or differentiation like having a fun experience with the employees, which normally you would have to pay extra for. Or being on time. Normally, in order to achieve that, companies are going to have to spend money and make investments to be on time more because there are a lot of factors you can't control like weather, and traffic at an airport. And so they've been able to achieve success kind of bridging both of these strategies. That approach is only for the very brave entrepreneur or manager. Because the cases or examples are few and far between of companies that have been able to achieve that. Most companies pick one, and try to do it very, very well.
