Farewell Ted, we hardly knew thee

Employees never bought into it: "It's the butt-end of United." "It's United without the 'U' and 'I'." Customers could hardly even tell they were even on a Ted flight. As I mentioned in an earlier post, only the napkins were distinctively different from a regular United flight.

My conclusion in that post: "Give up already. What's the point of continuing with this?" Well, now it's gone. United finally called time on this unsuccessful venture yesterday.

Given the economic climate in general and the price of fuel in particular, the end of Ted was perhaps inevitable. But its demise also shows the high level of difficulty of creating a company within a company. It's a difficult trick to pull off and typically leads to a clash of cultures that results in a bad outcome.

Surprisingly, car makers are the one group that seem to be able to consistently make this model work. Toyota has been very successful with Lexus, Honda with Acura and even GM has, so far, managed to pull it off with Saturn. Certainly way more successful in this regard than the airlines.

Western Union: Wired in

"We're a remittance company. The ability to accommodate and expand and extend into new technologies is really core to our strategy."
Matt Dill, GM of Western Union's Mobile Division on NPR yesterday.

Last year, Western Union sent $64 billion to over 200 countries primarily on behalf of immigrants who are sending money to support families back home. It's extremely focused on those customers and that business (now that it has sent its last telegram) and, based on Matt's comments, its management team knows exactly who they are and what they do.

Such companies have an important competitive advantage over those that don't have such a clear idea of what business they are in or what their strategic objectives are. They are, for example, much better prepared to make business decisions quickly even when those decisions are potentially disruptive to their business model.

Specific case in point: Western Union is now going to let its customers move money by mobile phone from one handset to another bypassing the normal visit to an Agent. Rather than fight technology, Western Union has decided to embrace it. As opposed, perhaps, to the music industry?

Source: NPR