What This MBA Student Learned About Business In His First 10 Weeks
By the end of their two years, MBA students can expect to have learned a great deal of information. For Jeff Rechler, an MBA student at University of Washington’s Foster School of Business, it only took his first 10 weeks to gain some substantial insight about the business world.
Here are a few of the lessons he took away in his first 10 weeks:
Unfairness is universally loathed, even among animals
Fairness is an important lesson Rechler says he learned in his first 10 weeks. He cites a famous study by biologist and primatologist Frans de Waal in which Capuchin monkeys rejected unequal pay reward. In the study, monkeys were placed in side-by-side cages and asked to complete a task in exchange for a cucumber reward. All goes well until the experimenters begin giving one monkey grapes as a reward as the other monkey continues to receive cucumbers.
“Apply this lesson to business and it’s clear how real or perceived unfairness in the workplace can have lasting and damaging consequences,” Rechler says.
Conspicuous conservation is the new conspicuous consumption
Conspicuous conservation, according to Investopedia, is the “purchase of goods or services for the specific purpose of displaying one’s wealth. Conspicuous consumption is a means to show one’s social status, especially when the goods and services publicly displayed are too expensive for other members of a person’s class.”
In 2011, economists Alison and Steve Sexton discussed the idea of “conspicuous conservation.”
“The Sextons concluded that the Toyota Prius’ unique styling accounted for an additional 21-33% increase in market share in Colorado compared to competitors whose hybrid vehicles were indistinguishable from non-hybrid models,” Rechler says.
Companies really do rely on supply & demand curves
According to Rechler, Alaska Airlines offers 1,200 flights a day and sells tickets 330 days in advance at 20 different price points. And it all has to do with supply and demand.
“It’s a complicated operation but ultimately the company’s strategic pricing decisions boil down to an analysis of supply and demand based on data from hundreds of thousands of flights,” Rechler says. “While every flight is different, customers really do have the best chance of scoring a good deal when purchasing more than 60 days in advance. As for the day of the year when it is cheapest to fly: Halloween.”
Market leaders benefit the most from increased market demand
Competition is good, especially when it brings more demand. Rechler says he learned this after speaking with a Tesla manager who was disappointed by Chevy Bolt’s low production numbers. According to Rechler, the Tesla manager felt more competition would be good for the electric car industry.
“His comments are consistent with our marketing lesson about stimulating primary demand: when overall demand grows, competitors typically share that new demand in proportions roughly equal to their existing market shares,” Rechler says. “In other words, as the electric vehicle pie gets bigger, Tesla would expect to capture a larger slice of pie proportional to its already dominant market share.”
Leading brands have had some embarrassing product flops
All companies learn through failure. Even the leading brands. Rechler says he learned about leading brand failures — such as Google Glass and Amazon’s Fire Phone — in a marketing class, where he analyzed failures from a company, customer, and competitor lens. In studying these failures, Rechler says he realized there were several instances where notable companies made huge product flops. The lesson?
“Stick to your core competencies and actually talk with customers before launching a product intended for them,” Rechler says. “And if you’re going to fail, fail fast before investing heavily in a product rollout.”
Sources: LinkedIn, Investopedia
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