Looking for a job I’m studying for a Master’s degree at Brandeis, in Boston. I’ll be graduating in May of 2024 and looking for a job in a long-only equity fund, in the line of the companies and philosophy I follow here. If you know of anything, I’d really appreciate you letting me know.
Any one can try to disrupt anything. Sleep points out that competitors have a vast moat to cross in terms for building a loyal base of customers (Costco Members and Amazon Prime Members), that the companies are not idle and are changing their competitive stance as you attempt to disrupt them. The widest moat is mental: getting the attitude right for passing through savings. Sleep shared: "To understand how important Every Day Low Price is to Jim Sinegal, the firm’s founder, consider the following story which was recounted to us by a company director. Costco bought 2m designer jeans from an exporter and shipped them into international waters and re- imported the jeans for an all-in price of U$22 or so per pair. This was U$10 less than the firm had sold the jeans for in the past (offering the potential for a 50% mark-up) and half the cost of most other retailers. One buyer recommended taking a higher gross margin than was usual (i.e., more than the usual 14% mark-up) as no one would know. Apparently Sinegal insisted on the standard mark up, arguing that if "I let you do it this time, you will do it again". The contract with the customer (very low prices) must not be broken."
Wonderful commentary and very pertinent, thank you for sharing. I've been thinking about this topic since I wrote the article. I still think there are a lot of valid points in the idea, but I agree with you, everything can be disrupted. The extract you share is fascinating. Sleep's letters are delightful.
Thank you for reading and great question. I don't know, that's what I'm trying to answer. I'll be thinking about this in the coming months to see if there's something of that in these business models.
I'm reading through the Sleep letters now.
Any one can try to disrupt anything. Sleep points out that competitors have a vast moat to cross in terms for building a loyal base of customers (Costco Members and Amazon Prime Members), that the companies are not idle and are changing their competitive stance as you attempt to disrupt them. The widest moat is mental: getting the attitude right for passing through savings. Sleep shared: "To understand how important Every Day Low Price is to Jim Sinegal, the firm’s founder, consider the following story which was recounted to us by a company director. Costco bought 2m designer jeans from an exporter and shipped them into international waters and re- imported the jeans for an all-in price of U$22 or so per pair. This was U$10 less than the firm had sold the jeans for in the past (offering the potential for a 50% mark-up) and half the cost of most other retailers. One buyer recommended taking a higher gross margin than was usual (i.e., more than the usual 14% mark-up) as no one would know. Apparently Sinegal insisted on the standard mark up, arguing that if "I let you do it this time, you will do it again". The contract with the customer (very low prices) must not be broken."
Wonderful commentary and very pertinent, thank you for sharing. I've been thinking about this topic since I wrote the article. I still think there are a lot of valid points in the idea, but I agree with you, everything can be disrupted. The extract you share is fascinating. Sleep's letters are delightful.
Thanks for the insights. If Costco and Amazon are examples of scale economies shared, do you mean that these cannot be disrupted?
Thank you for reading and great question. I don't know, that's what I'm trying to answer. I'll be thinking about this in the coming months to see if there's something of that in these business models.