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I am genuinely curious, when has a company deliberately making a stark pivot in offering better reliability for a product line led to better sustained profits?
by Judgmentality 7y ago
I am genuinely curious, when has a company deliberately making a stark pivot in offering better reliability for a product line led to better sustained profits? This is not a rhetorical question - I genuinely want people to provide me with examples. I suspect it is very rare that this happens, but hope I'm wrong.
- momokoko 7y agoMercedes Benz? It's actually very common. It's just that the recent trend in private equity is to cash in past reputation for short term profits.
- Spooky23 7y agoHonda and Toyota are the reference models for this premise. They completely owned multiple segments by offering a better quality product. Hyundai is another more recent-ish example. Hyundai cars were absolute garbage for a long time, they improved but the market didn’t know. So they their money where their mouth was by offering a 100k warranty. (Audi did something similar in the 80/90s). I’d be cautious in assuming that electric cars will be better. Scheduled maintenance is reduced, but there are plenty of quality and repair issues with Tesla as evidenced by consumer reports. Unscheduled maintenance is still a factor of assembly and engineering quality. Also, from a cost POV, franchise laws aren’t going away right away. So the price of that ICE maintenance dealer margin is going to be baked in, or the dealers won’t move the cars.