Smart Business Strategies for Product Managers
1. Why a retail store like Nordstom offer free Wi-Fi?
We know that Starbucks offer free Wi-Fi so that people can have meeting their, can work there and sip coffee. In 2012 a retailer started offering free Wi-Fi in stores, and this smart strategy increases their profit.
When we turn on your Wi-Fi, our phone sends out a radio signal to find out the nearby router or Wi-Fi spot. These radio signals from the phone contain a unique code that is embedded in the phone called MAC address. So whoever owns the hotspot can use the MAC address to identify your phone, whenever it connects to a hotspot.
In 2012 Nordstrom realized that they can use their Wi-Fi router to get the location of their customers inside the store. But the question now arise is how could Nordstrom get the exact location of the customer inside the store? The technique is called triangularization, the store has multiple hotspot, so when you are connected with the WIFI, with the strength of the signal they can measure the exact distance of you in the store. Each hotspot will measure the strength of the radio signal from your phone to the hotspot to calculate how far your phone is from the hotspot; the farther away you are, the weaker the radio signal. They use this information in multiple ways
- They were able to know the busiest time and busiest place of the day and employee more sales person there.
- They know which section is getting more traction and which isn’t, and adjust the inventory according to it.
- They also use a Wi-Fi authentication mechanism in which they get the email id of the person and targeted advertisement and offers increases the profit.
2. Why does Amazon offer free shipping with prime membership even though it still loses them money?
There are several reasons which can attribute to the answer to this question. In recent times, Amazon focus more on increasing revenue than increasing profit, it reinvested back the money it earned rather than giving a large chunk to shareholders. Their idea is to grow their business as quickly as possible to maximise the long term growth.
Now let us look at the different ways in which Prime helps Amazon increase revenue:
- Prime is a loyalty program which gets customers to spend more and more on their platform. A study shows that the prime member spends as much as 5 times the non-prime members.
- Everyone wants quick delivery, this is where Amazon hurts their competitors more. Prime has conditioned their customers to expect 2-day delivery.
- It is clear that Amazon wants more and more people to onboard on their prime platform, so they started aggregating more and more benefits into the prime platform like free movies, music streaming etc.
3. Why did Microsoft acquire LinkedIn?
Microsoft’s traditional business of Windows and devices is getting stagnated and so it realized the future of enterprise business. The following reasons can attribute to the acquisition of the LinkedIn by Microsoft
- Centre of Business Person’s world: Acquiring LinkedIn helps Microsoft becomes the Centre of the business person’s world, just like Facebook and Instagram are the Centre of social life.
- Data: By the social graph of LinkedIn, Microsoft gets a lot of data which can be used to improve the existing enterprise offerings.
4. Why Facebook acquired Instagram?
In 2012 Facebook acquired Instagram for $1B. At that point in time, Instagram had zero revenue, and it didn’t have any plan to make revenue, but still Facebook acquired Instagram. There can be potential reasons for that.
- Mobile is the future: Long ago, Facebook, which started as a desktop application had realised the power of handheld devices that is mobile. Till that time, Facebook hasn’t figured out how to monetize the mobile at all. The Facebook mobile app was also accused of being cluttered and long page load time.
- Photos are the future: Facebook realized the power of images over text, and people find the photo-sharing experience of Instagram to be more convenient and easier. Facebook realised that Instagram was doing a better job at mobile photos, which gave them a strong reason to acquire it.
5. How does self-driving cars work?
First, we need to understand how a self-driving car works. Self-driving cars use a lot of cameras, sensors, computers and cloud servers.
- First, the car needs to understand where it is since GPS can’t be perfectly accurate, so it uses an internal navigation system that is very fine-grained and accurate.
- The car uses a bunch of sensors like a speedometer and compasses to know how fast it is moving and in which direction it is moving.
- Once the car understands where it is, the direction of movement and the speed of movement, then the car needs to understand what is going around it. Car needs a hyper-detailed map which is not something like Google Maps.
- Still car needs to understand the distance of any object from it. The car uses a moving laser mounted on the top called LIDAR, which helps the car build a 3D model of the surrounding. Radar sensors help the car to figure out the distance from it.
- The 3D model is great, but still, the car needs a basic understanding like a green light, people moving around if a bicyclist is extending its arms 90* to turn around etc. So this is done by machine learning; the car learns from the previous labelled training data and gives predictions depending on that.
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