Stuart Hart States It Is Easier To Add Features To A Low Cost Platform Than Take Cost Out of A High Cost Platform

Ali Goheer - 5 November, 2007 Format for printing

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You can always add cost and features on to a low cost platform. It's much more difficult to take cost out of a high cost platform and try to trickle it down. So this great leap idea right, is the way you combine the idea of next generation inherently clean technology with serving the base of the pyramid and then you can imagine trickling it up over time, so initially it's all about creative creation. It's whole new market space with huge growth potential. It doesn't cannibalize the existing business at the top of the pyramid to start with. Only after that's become established and has grown in a dramatic way that you then begin to think about migrating it up market. So if you're an incumbent firm that can be done very planfully, right but that's probably the way in the long run. We're going to take out our energy intensive big foot print energy system here. You know only when we have an alternative, you or I, we have an alternative that's at least as good if not better than what we currently got price wise and convenience wise, will it be adapted by the mass market. Sure, you know, we've got 5% of the, you know, the green market that's already adopting solar and so forth for the added cost but it's not going to happen for the mass market. Only when you've got an alternative that's clearly better will it happen and in my view, this is the dynamic through which that can happen. It's the great leap and then the up market migration which is totally against the grain, contrarian, right. So I think a lot of sustainability thinking, sustainability strategy is contrarian.