If you want to create a really successful business, you have to do more
than win your share of customers or control costs—you have to break the
rules and overturn the received wisdom about how things work in your
industry. For example, high-priced landing fees are just a cost of
business in the airline industry, aren’t they? Ryanair didn’t think so,
and it turned Europe’s unused World War II landing strips into very low
cost airports. To be a cell phone service provider, you need to invest
in towers, networks, billing systems, and more, right? India’s Airtel
said no and leased virtually everything it needed from others. In
sharply lowering its costs and improving its working capital model,
Airtel was able to offer India’s impoverished consumers cell phone
service at a dramatically reduced price. How can companies figure out
which rules to break in their industries? By focusing on big structural
problems endemic to their industries—not just problems they alone face.
There are five common types of industry bottlenecks: (1) an outdated
purchase or usage experience, (2) a superfluous major expense category,
(3) high financial risks for customers, (4) disengaged employees, and
(5) detrimental side effects of the product or service. This article
lays out strategies used by real companies for busting those
bottlenecks. In doing so, companies stand to significantly reduce their
costs—or even eliminate entire cost categories—boost demand levels, and
sometimes both. [ABSTRACT FROM AUTHOR]