Like Romans Applauding Lions

[L]et me bring you to the second floor, the grand pavilion. This is a complete McDonald’s with a twist: every month or quarter or so, it is redesigned to provide the exact experience of dining in a different country’s McDonald’s. Did you know in some places, like including Paris and New York, McDonald’s has experimented with table service? McDonald’s in Germany serves beer but charges for condiment packets? Best of all, McDonald’s in Hong Kong HAS WEDDINGS. (“The package includes a budget version of the usual trappings: a ‘cake’ made of stacked apple pies….”) To ensure that the experience is exact, crews will have to be imported from local staff. Like, if you work at a bustling McCafé in Argentina, and you are the best, you might one day get called up for the big trip to New York, where you will stay in the McDorms, have a musical montage, and so on, all to make sure details like handing back the credit card with two hands in the Korean McDonald’s get taken care of. Maybe sometimes it would also shift not just in space but in time. We could see what a typical McDonald’s of 1970s Idaho was like. With actors dressed up and stuff. There would be segregation.

So much of Amazon’s competitive advantage in those days came from operational efficiency. You can choose to leverage that strength in two ways. One is you match your competitor on pricing and just earn higher margins. But the other, the way Amazon has always tended to favor, is to lower prices, to thin the oxygen for your competitors.

If you have bigger lungs than your competitor, all things being equal, force them to compete in a contest where oxygen is the crucial limiter. If your opponent can’t swim, you make them compete in water. If they dislike the cold, set the contest in the winter, on a tundra. You can romanticize all of this by quoting Sun Tzu, but it’s just common sense.