Saturday, April 9, 2011

Simplicity as a business model





"A variety of colors makes man's eye blind; a diversity of sounds makes man's ear deaf; a mixture of flavors makes man's palate dull."  Lao Tzu

Do you know what 'halo effect' is? It is psychological bias. According to Wikipedia: "the halo effect refers to a cognitive bias whereby the perception of a particular trait is influenced by the perception of the former traits in a sequence of interpretations."
Furthermore:
"In brand marketing, a halo effect is one where the perceived positive features of a particular item extend to a broader brand. It has been used to describe how the iPod has had positive effects on perceptions of Apple's other products."

Well, in a way iPod increased dramatically the interest for Apple's as a company, hence - their product's popularity. But I don't think this is the key to Apple's success. It is not the root cause - it is just an outcome of their brilliant strategy.

It is clear that quality is an essential ingredient of their recipe for success, but what I'm really interested in is: How they manage to establish a perception of exclusivity and uniqueness for everything they produce?

And the answer is: they make only 'halo' products. Simple and effective.

Take a look at the PC or mobile phones market for example - you can choose from hundreds of models which differ in every possible way. It is extremely difficult to be eminent in a market characterized with excessive variety.

But Apple doesn’t produce PCs or mobile phones. They produce Mac and iPhone. They define their own market, which motto is: 'we don't need to make hundred models, we make just ONE and we put our BEST effort in it; we make it one, but we make it count'. Does this strategy work? You tell me.

Simple and effective. It yields the coolness aura of Apple’s products.  And gives them the edge over ‘the others’. The zen way of doing business.


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