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In late 2004, Renault launched a new car, the 'no frills' Logan, which exemplifies how eliminating complexity can provide a powerful engine for growth. The stripped down cars offer roomy, basic transportation, and that's it - few electronics, few components, a flat windshield, and no built-in radio or power steering. Eliminating complexity allows the cars to sell for a great price - $9,300, half the price of a Ford Focus or a WV Golf. Renault expects to sell 175,000 Logans this year alone, with a goal of ramping up to more than a million by 2010. Core principle? Take out attributes customers don't care about to offer an irresistible price.
Source: Gail Edmondson and Constance Faivre d'Arcier writing in Business Week July 4, 2005.
Posted by Rita at July 5, 2005 06:29 PM
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