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This isn't why this happens. If you are an exec at MCD, your main focus is on making numbers. That is it. Your bonus is based on this, your options are based o

This isn't why this happens. If you are an exec at MCD, your main focus is on making numbers. That is it. Your bonus is based on this, your options are based on beating expectations...nothing else matters. What this means in practice is that companies look for ways to cut costs and fill gaps when a number comes in light (because you can cut costs immediately but growing revenue requires long-term investment). And, over time, you see significant deterioration in product from lots of decisions made to make a number in a quarter. An even more interesting aspect of this problem is that these companies only ever cut back on things like product. FMCGs were doing this for years, and most companies in the sector were still horribly overstaffed. You are right, this doesn't happen in industries where there is more competition. But this is not true for almost every consumer-facing product where there are limits to competition. Indeed, FMCGs have been reducing product quality for years but it has only been changing consumer tastes that has led to more innovation through new products/categories. In other wards, no-one tries to start a new mayonnaise company because Hellmann's began adding more oil...you try to get distribution into the large grocery stores, and they will laugh you out the door (but you turn up with a vegan mayonnaise, and they are interested). Another example of this is Tesco in the UK. They are famous for producing executives which make a series of short-term decisions over a very long period that add up to a bad situation (and there is no new competition, Tesco over-index to locations that have no other supermarket chains...you would lose tens of billions trying to just get a foothold).

crazygringo 3y ago
Since you brought up McD's, then how do you explain why they're now rolling out Big Macs with more sauce, not less [1]? Along with a bunch of other improvements like melting cheese rather than sticking it on burgers cold. If nothing else matters than making numbers in a quarter, if companies "only ever cut back on things like product", then how do you explain this example of actual corporate behavior? It's not like McD's vs Burger King is full of competition in a way that Hellman's vs Miracle Whip isn't, to use your mayonnaise example. (Or Kraft, or store-brand, to continue with mayo.) This idea that there are major "limits to competition" in "almost every consumer-facing product" just isn't reality. Companies compete with each other ruthlessly. [1] https://www.reuters.com/business/retail-consumer/mcdonalds-tweaks-buns-sauce-better-big-macs-2023-04-17/ https://www.reuters.com/business/retail-consumer/mcdonalds-t...
- potatolicious 3y ago
  Is there a serious competitor to Google Search? Like, not a distant competitor like Bing that poses some hypothetical future threat, but like, a present threat to Google Search that they battle against daily. Likewise for the major other properties - Gmail? YouTube? The only products where there is IMO intense daily competition is Android and Chrome, where Google's dominance is far from complete. In Google's top money-making properties the competition is pretty mild, and IMO we're seeing user-hostile changes because of it. I would liken McDonald's more to Android than to Google Search. It exists in a furiously competitive landscape where market share moves significantly year-to-year, and despite being a dominant brand within its space it doesn't even come close to owning the entire space. In any case, that's neither here nor there, I would like to engage with something you brought up that I do think is interesting: > "On the other hand, if consumers are actively seeking out sesame seed buns, there is absolutely a point at which they notice and say, what the hell, this brand hardly has any sesame seeds, I'm going to buy the competing brand that still has a normal amount of sesame seeds." This is true! And I think this moment is coming for Google. You are right - there are limits to how much you can shit up a product before consumers respond. I think the main thrust of your idea is legitimate: while a near-monopoly in a product category gives you a lot of leeway to fuck about with the product, that leeway is not infinite! At some point you're accountable to your users! The argument isn't so much whether or not that threshold exists (IMO it clearly does), it's what happens organizationally when the company reaches that threshold and can't deal with it. If you've spent the last 10 years staffing your corporate management with sesame-removers, what happens when you finally hit the thresholds and your customers flee? That to me is the more interesting question - whether or not Google's culture and staffing can navigate what's coming. They have hobbled along on early successes for too long, and IMO it remains to be seen if they are constitutionally able to handle a product crisis.
  - crazygringo 3y ago
    > Is there a serious competitor to Google Search? Like, not a distant competitor like Bing that poses some hypothetical future threat, but like, a present threat to Google Search that they battle against daily. Bing is what Google battles against daily. Bing is such a competitive threat that when reports came out three weeks ago that Samsung products might switch to Bing as a default, Google's stock dropped 4% [1]. Google has been innovating its search furiously over years and years because competition is just a click away -- knowledge cards, snippets, massive machine learning under the hood. Google pays Apple something like $8-12 billion a year to maintain its default. Google wouldn't do that if it didn't see Bing as a present threat. > Likewise for the major other properties - Gmail? YouTube? Microsoft Outlook? TikTok? Gigantic competitors. More businesses pay for Outlook than do for Gmail. And TikTok is crushing YouTube among teens [2]. [1] https://www.reuters.com/technology/alphabet-falls-report-samsung-considering-bing-default-search-engine-2023-04-17/ https://www.reuters.com/technology/alphabet-falls-report-sam... [2] https://techcrunch.com/2023/02/07/tiktok-is-crushing-youtube-in-annual-study-of-kids-and-teens-app-usage/ https://techcrunch.com/2023/02/07/tiktok-is-crushing-youtube...

crazygringo 3y ago

Since you brought up McD's, then how do you explain why they're now rolling out Big Macs with more sauce, not less [1]? Along with a bunch of other improvements like melting cheese rather than sticking it on burgers cold. If nothing else matters than making numbers in a quarter, if companies "only ever cut back on things like product", then how do you explain this example of actual corporate behavior? It's not like McD's vs Burger King is full of competition in a way that Hellman's vs Miracle Whip isn't, to use your mayonnaise example. (Or Kraft, or store-brand, to continue with mayo.) This idea that there are major "limits to competition" in "almost every consumer-facing product" just isn't reality. Companies compete with each other ruthlessly. [1] https://www.reuters.com/business/retail-consumer/mcdonalds-tweaks-buns-sauce-better-big-macs-2023-04-17/ https://www.reuters.com/business/retail-consumer/mcdonalds-t...

potatolicious 3y ago
Is there a serious competitor to Google Search? Like, not a distant competitor like Bing that poses some hypothetical future threat, but like, a present threat to Google Search that they battle against daily. Likewise for the major other properties - Gmail? YouTube? The only products where there is IMO intense daily competition is Android and Chrome, where Google's dominance is far from complete. In Google's top money-making properties the competition is pretty mild, and IMO we're seeing user-hostile changes because of it. I would liken McDonald's more to Android than to Google Search. It exists in a furiously competitive landscape where market share moves significantly year-to-year, and despite being a dominant brand within its space it doesn't even come close to owning the entire space. In any case, that's neither here nor there, I would like to engage with something you brought up that I do think is interesting: > "On the other hand, if consumers are actively seeking out sesame seed buns, there is absolutely a point at which they notice and say, what the hell, this brand hardly has any sesame seeds, I'm going to buy the competing brand that still has a normal amount of sesame seeds." This is true! And I think this moment is coming for Google. You are right - there are limits to how much you can shit up a product before consumers respond. I think the main thrust of your idea is legitimate: while a near-monopoly in a product category gives you a lot of leeway to fuck about with the product, that leeway is not infinite! At some point you're accountable to your users! The argument isn't so much whether or not that threshold exists (IMO it clearly does), it's what happens organizationally when the company reaches that threshold and can't deal with it. If you've spent the last 10 years staffing your corporate management with sesame-removers, what happens when you finally hit the thresholds and your customers flee? That to me is the more interesting question - whether or not Google's culture and staffing can navigate what's coming. They have hobbled along on early successes for too long, and IMO it remains to be seen if they are constitutionally able to handle a product crisis.
- crazygringo 3y ago
  > Is there a serious competitor to Google Search? Like, not a distant competitor like Bing that poses some hypothetical future threat, but like, a present threat to Google Search that they battle against daily. Bing is what Google battles against daily. Bing is such a competitive threat that when reports came out three weeks ago that Samsung products might switch to Bing as a default, Google's stock dropped 4% [1]. Google has been innovating its search furiously over years and years because competition is just a click away -- knowledge cards, snippets, massive machine learning under the hood. Google pays Apple something like $8-12 billion a year to maintain its default. Google wouldn't do that if it didn't see Bing as a present threat. > Likewise for the major other properties - Gmail? YouTube? Microsoft Outlook? TikTok? Gigantic competitors. More businesses pay for Outlook than do for Gmail. And TikTok is crushing YouTube among teens [2]. [1] https://www.reuters.com/technology/alphabet-falls-report-samsung-considering-bing-default-search-engine-2023-04-17/ https://www.reuters.com/technology/alphabet-falls-report-sam... [2] https://techcrunch.com/2023/02/07/tiktok-is-crushing-youtube-in-annual-study-of-kids-and-teens-app-usage/ https://techcrunch.com/2023/02/07/tiktok-is-crushing-youtube...