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Haenlomal (Haenlomal)
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Posted on Thursday, October 09, 2008 - 7:22 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Just like its sister puzzle, this one should go fairly quickly -- perhaps even faster than the first one!




Title: A Business Proposition II

Difficulty: Easy

Type: Based on a true story

Story:
A company discovered a potential enhancement it can make on the services it provides to its customers. The enhancement in question is relatively small, has a relatively high initial implementation cost, and would give them only a very small competitive advantage. Moreover, it was anticipated by the company that the competition could very easily and very quickly imitate this enhancement and thus nullify the advantage -- they estimate that it would only take the competition two weeks to implement the same enhancement and level the proverbial playing field again.

Nonetheless, despite the enhancement ultimately being a minor, expensive, unsustainable competitive advantage, the company decided to go ahead with implementation.


To Solve:
Why did the company do that?

Specialized Knowledge Needed:
None

Good luck!
Dlcygnet (Dlcygnet)
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Why - Tax break? Good PR? Free advertising? Cut down energy usage at the company? Cut company costs in the long run?

Is their reason directly related to the enhancement they made? Is the reason it more related to external powers-that-be? Green technology relevant? Customer convenience relevant?
Haenlomal (Haenlomal)
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Posted on Thursday, October 09, 2008 - 8:53 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Dlcygnet

Why - Tax break? Good PR? Free advertising? Cut down energy usage at the company? Cut company costs in the long run? No to all.

Is their reason directly related to the enhancement they made? No'ish Is the reason it more related to external powers-that-be? No Green technology relevant? No Customer convenience relevant? No
Bodo (Bodo)
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Posted on Friday, October 10, 2008 - 7:24 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Were they required to by law? Does it have to do with employee safety? Does it have to do with employees (or some subset thereof) at all?
Haenlomal (Haenlomal)
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Posted on Saturday, October 11, 2008 - 7:21 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Bodo

Were they required to by law? Does it have to do with employee safety? Does it have to do with employees (or some subset thereof) at all? No to all.
Danielvs (Danielvs)
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Posted on Saturday, October 11, 2008 - 9:59 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Small company? Big company?
Type of company relevant? If so:
- financial services?
- food?
- transportation?
- tourism?
- department store?
- pharmaceutical?
- media/electronic?
- health?
Haenlomal (Haenlomal)
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Posted on Sunday, October 12, 2008 - 4:42 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Danielvs

Small company? Big company? Irrelevant
Type of company relevant? If so:
- financial services?
- food?
- transportation?
- tourism?
- department store?
- pharmaceutical?
- media/electronic?
- health?

The type of company is actually irrelevant, but for the record, the real life company on which this puzzle is based is an airline. This puzzle would still work had the company been in any one of the industries you've named above.
Lynne (Lynne)
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Posted on Sunday, October 12, 2008 - 4:47 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Is the enhancement tangible?
Did they add something for their customers? Or did they remove something that could have been construed as an obstacle?
Haenlomal (Haenlomal)
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Posted on Thursday, October 16, 2008 - 4:32 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Lynne

Is the enhancement tangible? Irrelevant, but yes
Did they add something for their customers? Well, it certainly added value for customers. Or did they remove something that could have been construed as an obstacle? Irrelevant. But for the record, one can also think of the enhancement in this manner.
Bodo (Bodo)
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Posted on Friday, October 17, 2008 - 2:38 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

So larger seats? More room in at least one direction?

So what we're looking for is their motivation for making the change? Were they being altruistic? Generating "goodwill"? Is there any particular person relevant to the decision?
Katy (Katy)
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Posted on Friday, October 17, 2008 - 9:04 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did making this change mean they could make other changes in the future more easily?
Alex319 (Alex319)
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Posted on Friday, October 17, 2008 - 6:40 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Let's focus on the nature of the "change." Note that since the type of company is irrelevant, it has to be something that isn't related to the particular service being provided.

Does it have to do with...

...pricing? coupons? discounts? customer loyalty programs?
...customer service? service over the phone? email? in person? phone trees/IVR relevant?
...giving out "freebies"?
Haenlomal (Haenlomal)
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Posted on Friday, October 17, 2008 - 11:30 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Bodo

So larger seats? More room in at least one direction? This one -- more specifically, passengers got a bit more leg room. Please remember, though, that this is mostly irrelevant -- there is still some more general, yet-to-be-discovered properties about the enhancement that is relevant, and any enhancement for any company would do as long as these properties are met.

So what we're looking for is their motivation for making the change? Yes Were they being altruistic? Generating "goodwill"? Is there any particular person relevant to the decision? No to all the rest.

Katy

Good to see you back, Katy =)

Did making this change mean they could make other changes in the future more easily? No

Alex319

Let's focus on the nature of the "change." Note that since the type of company is irrelevant, it has to be something that isn't related to the particular service being provided. Good call.

Does it have to do with...

...pricing? This, and... coupons? discounts? customer loyalty programs?
...customer service? service over the phone? email? I don't think email was around, given that the events in this puzzle took place in the late sixties. in person? phone trees/IVR relevant?
...giving out "freebies"? No to the rest.
Katy (Katy)
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Posted on Saturday, October 18, 2008 - 3:03 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Thanks - nice to be back although I have forgotten how to use the LTPF!
Did they make their services more customisable in some way? Did they change the way they charged for their services?
Rubberduck (Rubberduck)
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Posted on Sunday, October 19, 2008 - 9:23 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did the change involve removing something to increase leg room? Would the change reduce the airline's operating costs in the long run? Less maintenance? Or could they charge the customers more?
Fritzbueno (Fritzbueno)
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Hi! I'm new here but I enjoy Lateral Puzzles very much. Let me try this one...

Is the enhancement somewhat date-related (i.e. is there an event going in the next week or so) that it wouldn't matter if competitors will be able to implement the same in a couple of weeks since they would have already gained a lot by that time?
Haenlomal (Haenlomal)
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Posted on Monday, October 20, 2008 - 2:23 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Katy

Thanks - nice to be back although I have forgotten how to use the LTPF! I'm sure you'll get the hang of it very quickly -- it's rather like riding a bike: you won't forget it once you've learned.
Did they make their services more customisable in some way? No Did they change the way they charged for their services? Yes

Rubberduck

Did the change involve removing something to increase leg room? Irrelevant -- I think out of necessity, the airline would need to remove something on their planes to increase leg room, but this puzzle would work just as well if they didn't need to remove anything. Would the change reduce the airline's operating costs in the long run? No Less maintenance? No Or could they charge the customers more? Well, yes, but...

Fritzbueno

Hi! I'm new here but I enjoy Lateral Puzzles very much. Let me try this one...

Welcome to the Lateral Thinking Puzzles Forum, Fritzbueno. =) I wish you a pleasant stay.

Is the enhancement somewhat date-related (i.e. is there an event going in the next week or so) that it wouldn't matter if competitors will be able to implement the same in a couple of weeks since they would have already gained a lot by that time? No
Biograd (Biograd)
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Posted on Wednesday, October 22, 2008 - 11:57 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did the change provide for a new "class" of customers (for example, business class or the equivalent)? Was the change made just so that the company could claim to be the first to have provided this type of increased value? so that they could trademark the name of the new type of service, and prevent competitors from calling it by that name?
Katy (Katy)
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Posted on Friday, October 24, 2008 - 8:16 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Was it to do with how customers paid? I'm thinking of chip n pin...
Usmcfink (Usmcfink)
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I noticed you said a "relatively high implementation cost." Relative to what, I wonder. Other enhancements that could have been made? The price of adding one olive to the salads? =)

Did the airline see this as a sweeping trend and wanted to be one of the first on the bandwagon? I know credit cards began to gain prominence in the sixties for various reason, but especially among those that traveled around the country...
Haenlomal (Haenlomal)
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Posted on Wednesday, October 29, 2008 - 9:56 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Biograd

Did the change provide for a new "class" of customers (for example, business class or the equivalent)? Irrelevant. That being said, I think this was the ultimate end result of the enhancement. Was the change made just so that the company could claim to be the first to have provided this type of increased value? No so that they could trademark the name of the new type of service, and prevent competitors from calling it by that name? No

Katy

Was it to do with how customers paid? No I'm thinking of chip n pin...

Usmcfink

I noticed you said a "relatively high implementation cost." Relative to what, I wonder. That's for me to know, and you to find out. =) Other enhancements that could have been made? No The price of adding one olive to the salads? =) Haha...no.

Did the airline see this as a sweeping trend and wanted to be one of the first on the bandwagon? No I know credit cards began to gain prominence in the sixties for various reason, but especially among those that traveled around the country... Interesting, but unfortunately, this puzzle has nothing to do with credit cards.
Usmcfink (Usmcfink)
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Posted on Thursday, October 30, 2008 - 4:18 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

*scratches head*

Is this enhancement a physical one? economic one? ideological?

Did this only benefit the consumer? Would the company see a full return of investment before the other companies would adapt the same thing? Would this be considered the "best" way to do it (working off the assumption that once the other companies saw this, they too would adopt it)? Was this change not patentable? What is the only item to be patented by the US PTO that carries part of its name?
Rabrab (Rabrab)
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Posted on Saturday, November 08, 2008 - 2:56 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Hi guy! Nice to see you again.

So in the sixties, and airline changed something about their planes in a way that provided more leg room...
Did they change:
The seat layout?
the seat design? (reducing the size of the seats would produce more leg room with the same number of seats in the same configuration.)
The number of seats?
The type of plane?

The enhancement was to:
the overall flying experience?
the public perception of value when flying?
safety? (perceived? or actual?)
Haenlomal (Haenlomal)
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Usmcfink

*scratches head* Yes...puzzling this is, no? =)

Is this enhancement a physical one? Irrelevant, but this one economic one? ideological?

Did this only benefit the consumer? No Would the company see a full return of investment before the other companies would adapt the same thing? No -- good question! Would this be considered the "best" way to do it (working off the assumption that once the other companies saw this, they too would adopt it)? Well, I'm sure there are many different ways to optimize the layout so the average legroom was increased. The competition could have copied the company exactly, or elected to do their own layout. The important thing here for the purposes of this puzzle is that the competition would have been motivated to implement *something*. Was this change not patentable? I'm not sure -- the company certainly didn't take any steps to patent it. What is the only item to be patented by the US PTO that carries part of its name? Good question -- I don't know. Irrelevant at any case.

Rabrab

Hi guy! Nice to see you again. Hey Barbara. =) Nice to see you too. How have you been?

So in the sixties, and airline changed something about their planes in a way that provided more leg room...
Did they change:
The seat layout?
the seat design? (reducing the size of the seats would produce more leg room with the same number of seats in the same configuration.)
The number of seats?
The type of plane?

Irrelevant, but I think the enhancement was carried out using a combination of the first three things you mentioned.

The enhancement was to:
the overall flying experience? A bit of this for sure, but for the purposes of the puzzle....
the public perception of value when flying? ....mostly this one. Good question.
safety? (perceived? or actual?) No to the rest.

Hint: Review my reply given on Monday, October 20, 2008 - 2:23 pm.
Usmcfink (Usmcfink)
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In that reply you said:

"could they charge the customers more? Well, yes, but..."

Yes but...

they didn't? Maybe because they wanted to be perceived as being the first to adapt the change because they "care" about their customers? gaining credibility?

did the change increase anything other than 'leg'room?

Is the key to this puzzle the:

Motivation?
Actual change that occurred?
What the consequence of the change was?

The answer to my question: Patent Leather =)
Rabrab (Rabrab)
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Posted on Sunday, November 16, 2008 - 4:20 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Oh, busy having capital-L Life. Husband was in the hospital, big windstorm that took out power for a week and a half, trying to quit smoking, possible problem with my thyroid... you know, Life. On the whole doing pretty well, though; all of them could have been worse.

Does this have anything to do with the addition of the on-plane lounges and such in the sixties?
Size of the planes themselves?
Jets vs. prop planes?
Rabrab (Rabrab)
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Bigger overhead bins, giving the passengers less need to stuff everything under the seat in front of them?
Haenlomal (Haenlomal)
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Usmcfink

In that reply you said:

"could they charge the customers more? Well, yes, but..."

Yes but...

they didn't? No -- they actually did charge more. Perhaps I should have answered that question as: "Well, yes, and..." Maybe because they wanted to be perceived as being the first to adapt the change because they "care" about their customers? This may be part of it, but irrelevant for the purposes for this puzzle. gaining credibility? No

did the change increase anything other than 'leg'room? No

Is the key to this puzzle the:

Motivation? This one...
Actual change that occurred?
What the consequence of the change was? ...and this one.

The answer to my question: Patent Leather =) Ah, thanks for enlightening me. =)

Rabrab

Oh, busy having capital-L Life. Husband was in the hospital, big windstorm that took out power for a week and a half, trying to quit smoking, possible problem with my thyroid... you know, Life. On the whole doing pretty well, though; all of them could have been worse. Ugh...sounds pretty rough. Still, it's good to hear that you are on top of things. I will keep you and your family in my prayers.

Does this have anything to do with the addition of the on-plane lounges and such in the sixties?
Size of the planes themselves?
Jets vs. prop planes?
Bigger overhead bins, giving the passengers less need to stuff everything under the seat in front of them? None of these, I'm afraid.
Usmcfink (Usmcfink)
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Posted on Thursday, November 20, 2008 - 9:53 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Well, yes, and...

The customers were happy to pay? Felt like they were getting more "bang for their buck?" Saved the company money in some way? Got them free press?
Haenlomal (Haenlomal)
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Usmcfink

Well, yes, and...

The customers were happy to pay? Felt like they were getting more "bang for their buck?" Saved the company money in some way? Got them free press? None of these, I'm afraid.

There's one rather large party to this entire situation that has been mentioned in the puzzle, but no one has really explored this party's interests and possible reactions in-depth. Doing this may help you move forward in this puzzle.
Doctapeppa (Doctapeppa)
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Are the stockholders relevant? The media? The liberals? The Spaniards? Margaret Thatcher? If their competitors would not do it did it happen?
Rabrab (Rabrab)
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Posted on Sunday, November 23, 2008 - 5:23 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Party to the puzzle mentioned but not explored:
The airline?
The airline's employees?
The engineers/designers of the "improvement"?
The airline's competitors?
The airline's customers?
Customers who currently did not patronize that airline, but the the airline hoped to attract?

Back on October 29th you said
"I noticed you said a "relatively high implementation cost." Relative to what, I wonder. That's for me to know, and you to find out. =)
Perhaps it's time to find out...
Relative to other change? another change? they could have made that would have the same end effect?
Relative to the financial benefit they hoped to gain by it? (They did hope to gain financially by it, didn't they?)
Haenlomal (Haenlomal)
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Doctapeppa

Are the stockholders relevant? The media? The liberals? The Spaniards? Margaret Thatcher? None of these are relevant. If their competitors would not do it did it happen? This question does not make sense as it is currently constructed. Please rephrase.

Rabrab

Party to the puzzle mentioned but not explored:
The airline?
The airline's employees?
The engineers/designers of the "improvement"?
The airline's competitors? This one
The airline's customers?
Customers who currently did not patronize that airline, but the the airline hoped to attract?

Back on October 29th you said
"I noticed you said a "relatively high implementation cost." Relative to what, I wonder. That's for me to know, and you to find out. =)
Perhaps it's time to find out...
Relative to other change? another change? they could have made that would have the same end effect?
Relative to the financial benefit they hoped to gain by it? This one (They did hope to gain financially by it, didn't they? Yes)

All relevant information has more or less been uncovered. It only takes one lateral leap to put all of it together and finally put this puzzle to rest.
Doctapeppa (Doctapeppa)
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Posted on Wednesday, November 26, 2008 - 11:24 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Could they expect that the gain from it would surpass its implementation costs?
Rabrab (Rabrab)
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Posted on Friday, November 28, 2008 - 10:23 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did the airline that originally made this change do so not so much for the effect it would have on their business directly, but the effect it would have on their competitor's business?
Alhucema (Alhucema)
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Did the company want to appear in the press and thereby promote its name amongst its potential customers?
Haenlomal (Haenlomal)
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Doctapeppa

Could they expect that the gain from it would surpass its implementation costs? Well, of course it would...logically, the airline has to anticipate that it would gain net value (financial or otherwise) somehow, or else there's no point to the upgrade.

Rabrab

Did the airline that originally made this change do so not so much for the effect it would have on their business directly, but the effect it would have on their competitor's business? YES, good question! Explore a bit further on this theme.

Alhucema

Did the company want to appear in the press and thereby promote its name amongst its potential customers? Well, they definitely wanted their upgrade to be known to the public, and the press may be one way to do that.
Alex319 (Alex319)
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Did they expect that the competitors would make a mistake in responding to their action, thus costing the competitors money and giving them an advantage?
Haenlomal (Haenlomal)
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Alex319

Did they expect that the competitors would make a mistake in responding to their action, thus costing the competitors money and giving them an advantage? No. Quite the contrary, in fact...
Kaygee (Kaygee)
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So the opposite would be that they wanted their changes to impact the whole industry?
Doctapeppa (Doctapeppa)
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Posted on Sunday, December 14, 2008 - 9:57 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did they add an extra olive to the salads they served to first-class passengers?
Bodo (Bodo)
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Posted on Sunday, December 14, 2008 - 11:46 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Any sort of patent relevant? They anticipated making money when their competitors followed suit; did they own another relevant business (e. g. some hardware used to fasten seats, or a firm that was licensed to install seats)? Was there any sort of relevant retrofitting required due to changes in regulations?
Kaygee (Kaygee)
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Posted on Monday, December 15, 2008 - 2:37 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Hm-m-m...all this talk about pricing and how it applies to business...
Does this have anything to do with quality vs. quantity? Paying more to get better quality?
Kaygee (Kaygee)
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Posted on Monday, December 15, 2008 - 2:37 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Hm-m-m...all this talk about pricing and how it applies to business...
Does this have anything to do with quality vs. quantity? Paying more to get better quality?
Biograd (Biograd)
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Posted on Tuesday, December 16, 2008 - 11:28 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Going off of Kaygee's suggestion, is somthing like this relevant?:

It was inevitable that the airline industry was moving in the direction of an improved form of a particular feature of their planes or flights. Due to some factor out of the airlines' control (for example, the design of airports), the specifications of this feature needed to be standardized across all airlines.

Whichever airline made the enhancement first would be the one to set the standard, and that airline could do so in a manner so as to minimize implementation costs for itself. The other airlines would be forced to meet the same standard if they wanted to continue using the same airport terminals (or substitute here whatever demands the standardization), and this could be considerably more costly.
Haenlomal (Haenlomal)
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Posted on Thursday, December 18, 2008 - 10:13 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Kaygee

So the opposite would be that they wanted their changes to impact the whole industry? Yes

Doctapeppa

Did they add an extra olive to the salads they served to first-class passengers? Irrelevant, but no...recall that the ultimate end result of this enhancement was the creation of the first-class passenger concept, but at the time of this puzzle, the concept had not yet been fully conceived.

Not that these details are relevant anyhow...they just help "flesh out" the story a bit better. =)


Bodo

Any sort of patent relevant? No They anticipated making money when their competitors followed suit; did they own another relevant business (e. g. some hardware used to fasten seats, or a firm that was licensed to install seats)? No, but good thinking. Was there any sort of relevant retrofitting required due to changes in regulations? No

Kaygee, again

Hm-m-m...all this talk about pricing and how it applies to business...
Does this have anything to do with quality vs. quantity? No Paying more to get better quality? YES -- explore just a bit more on this theme, and this puzzle is done!

Biograd

Going off of Kaygee's suggestion, is somthing like this relevant?:

It was inevitable that the airline industry was moving in the direction of an improved form of a particular feature of their planes or flights. Due to some factor out of the airlines' control (for example, the design of airports), the specifications of this feature needed to be standardized across all airlines.

Whichever airline made the enhancement first would be the one to set the standard, and that airline could do so in a manner so as to minimize implementation costs for itself. The other airlines would be forced to meet the same standard if they wanted to continue using the same airport terminals (or substitute here whatever demands the standardization), and this could be considerably more costly.

Good thinking, but unfortunately, this is not quite the right idea -- implementation costs for all airlines in this case would roughly be the same. Also, it was debatable whether or not more leg room was "inevitable" during the time period of the puzzle -- maybe later, when companies in general became a lot more service friendly and customer-oriented, but this wasn't quite true yet in the sixties.
Kaygee (Kaygee)
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Posted on Friday, December 19, 2008 - 2:56 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

One more step on the "Pay more to get better quality" road:

Is the Company paying more for the enhancement in order to provide a better quality service/product?
or
Is the Customer paying more for the service/product in order to get the better quality enhancement?
Usmcfink (Usmcfink)
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Posted on Saturday, December 20, 2008 - 9:59 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Anything to do with the types of people the airline wanted to attract to their company?
Haenlomal (Haenlomal)
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Posted on Friday, December 26, 2008 - 6:24 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Kaygee

One more step on the "Pay more to get better quality" road:

Is the Company paying more for the enhancement in order to provide a better quality service/product?
or
Is the Customer paying more for the service/product in order to get the better quality enhancement? This one

Usmcfink

Anything to do with the types of people the airline wanted to attract to their company? No
Doctapeppa (Doctapeppa)
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Posted on Friday, January 02, 2009 - 10:09 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Was the price charged for a trip on an airplane directly proportional with the amount of leg room that the passenger would have?
Biograd (Biograd)
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Posted on Saturday, January 10, 2009 - 4:38 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

So the increased leg room is the essence of the enhancement? Some things you said earlier gave me the sense that this was just a positive but mostly accidental consequence of a change to some other feature of the aircraft and/or procedures. I guess I made that part up.
Haenlomal (Haenlomal)
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Posted on Monday, January 12, 2009 - 11:04 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Doctapeppa

Was the price charged for a trip on an airplane directly proportional with the amount of leg room that the passenger would have? Irrelevant, but no

Biograd

So the increased leg room is the essence of the enhancement? Yes, but keep in mind that the nature of the enhancement itself is irrelevant. The important thing here is that there exist an enhancement for which the airline can charge. Some things you said earlier gave me the sense that this was just a positive but mostly accidental consequence of a change to some other feature of the aircraft and/or procedures. I guess I made that part up. Well, there was a positive effect all right, but there was nothing "accidental" about it. In fact, it represented quite a shift from the predominant thinking in business strategy at the time. The airline was neither the first nor the only company to think in this fashion, but their example is often cited in textbooks.
Usmcfink (Usmcfink)
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Posted on Tuesday, January 13, 2009 - 2:38 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Is this something that you specify at the time of purchasing the ticket? An in-flight add-on? Is it now standard in all tickets? Are the crew directly affected? Only the passengers?

If the price of the ticket increases when the enhancement is added, does it increase $1-10/ticket? $11-25? $26-50? $51-100? $101+?
Haenlomal (Haenlomal)
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Posted on Tuesday, January 13, 2009 - 5:04 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Usmcfink

Is this something that you specify at the time of purchasing the ticket? An in-flight add-on? Is it now standard in all tickets? Are the crew directly affected? Only the passengers? I'm not quite sure I understand this set of questions, so I'll try to answer it this way: as a result of the enhancement, *ALL* ticket prices were increased, so I guess you can argue that it is now "standard" in all tickets. This has obvious effects on the passengers, since they will need to pay a bit more in order to get their ticket.

If the price of the ticket increases when the enhancement is added, does it increase $1-10/ticket? $11-25? $26-50? $51-100? $101+? The effect of the enhancement raised average ticket price around the $11 - $25 range, if my memory serves me correctly, but the exact amount is irrelevant. The important thing is that there is *some* price increase.
Steel_lock (Steel_lock)
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Posted on Thursday, January 15, 2009 - 2:53 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did this company make this alteration knowing that it could absorb the costs and reap the benefits more effectively than some or all of its other competitors could? (Like, it made an improvement that was expensive but affordable in the hopes that some of its smaller competitors would do the same thing and end up hurting themselves due to the cost).
Haenlomal (Haenlomal)
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Posted on Friday, January 16, 2009 - 10:07 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Steel_lock

Did this company make this alteration knowing that it could absorb the costs and reap the benefits more effectively than some or all of its other competitors could? (Like, it made an improvement that was expensive but affordable in the hopes that some of its smaller competitors would do the same thing and end up hurting themselves due to the cost). No, but if you twist your thinking here a little bit laterally...
Usmcfink (Usmcfink)
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Posted on Friday, January 16, 2009 - 10:44 pm:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Did the airline simply want to make it more expensive to fly?
Haenlomal (Haenlomal)
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Posted on Thursday, January 22, 2009 - 12:07 am:   Edit PostDelete PostView Post/Check IPPrint Post   Move Post (Moderator/Admin Only)Ban Poster IP (Moderator/Admin only)

Usmcfink

Did the airline simply want to make it more expensive to fly? Close enough

************* SPOILER **************

In the past, many businesses thought that in their particular industry, there is only a limited amount of wealth to go around. For example, suppose that there are only 100 customers in your target market, and on average they will pay $100 for your products and/or services. The thinking here is that there is only $10,000 worth of value for you and your competition to grab. If you have $1000 (10% of the market), then your competitors collectively will have the other $9000 of the market. Given this thinking, market share can only be gained at the expense of your competition. In other words, it's a win-lose game.

This airline turned this rather conventional business thinking at the time on its head. Instead of thinking the total market as limited, they increased the value of their service and gave the consumers incentive to pay more -- in other words, they increased the overall value of the proverbial pie. This only works if the competition realizes what is happening, but fortunately for the airline, their competition was bright enough. Thus, in this case, they created a win-win situation.

This type of thinking is common enough now, but it was a rather radical thought (i.e. the idea that everyone can win) at the time. Of course, it ultimately is still a win-lose game -- the customers who end up paying more, though it could be argued that they also receive better value.

Thanks to everyone who played, and thanks to Usmcfink for the final finishing questions!

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