Thoughts on Leica business models

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I had my marketing department present me their findings over a one year customer feedback program. They surprised me with their results and showed me that our company has been going about talking and listening to customers exactly the wrong way. I think that Leica has done the same thing.

We (and Leica) had asked customers in a blanket statement "What do you want or what do you want to see?" The fundimental problem with this question is that the customers are NOT the experts in the market/industry. That means, that the customer does not possess the quality and level of industry information that we (and Leica) as a company possess. By following customer wishes, a company can be lead astray from goals, R+D and industry trends. Thus, the idea of focus groups has its place, but only on a marginal, almost handshake glad hand level. A better system, one that we have changed to, is to ask customers specific questions that fall within our product development, sales goal and rollout scope. In Leica terms, "If you could improve the reliability of the M6, which one area would you choose. or If you could 'modernize' your MF R8 with focus assist, would you?"

Friends, do you see the difference? Leica has always asked us the general questions. When we dream, we dream big. Afterall, the laudry list that many of us come up with is fulfillable only by the Canons, Nikons et al of the world with deep pockets. The idea of a boutique high quality item, such as Leica, has a future only when staying within a small and specialized scope. Take Hermes for example!

I think that the day will be upon us as Leica collectors and fans when we will see Solms swallowed, integrated or worse, sooner than we think. Already, they are reporting pocket P+S camera sales down c.65% with no mid-range digital replacement in line. And now an M7? A product out of a focus group if there ever was one. I cannot imagine that a company as tiny as Leica can afford to make major product line mistakes anymore.

We are talking about issues that parallel well with the auto industry. 80 years ago, when a product was the top of the line and state of the art, it was called the Rolls Royce. (That expression still exists!) However, today, the 'Rolls Royce' of the car market is arguabley the Mercedes S class or BMW 7 - that is, leading products with technology, craftsmanship, marketability and 'cult' status among the common man and the industry engineers both, and rightly so. Leica still trades on THEIR Rolls status with Barnack and developments not acknowledged much outside of our little circles. With the world of reproduced images on film dying day by day, what questions are they asking us now? ...not the ones that are needed, I'm afraid.

-- Reto (redcave@schweiz.com), March 28, 2002

Answers

You are right of course.However, the most successful Companies in this world find a niche market.This type of market does not follow trends or fashion but is constant.Always successfull,only when they try to get on the band wagon do they get their a... kicked.Leica has been going against the trend,they are still here.They always will be,unless they loose their image and become the same as the rest.Then goodbye Leica.Yes it is that simple.

-- Allen Herbert (allen1@btinternet.com), March 28, 2002.

Leica should look at the Rolex business model. Don't assume that you have to be super innovative and attention getting to net the new demographic of customers but rather, accept that you were a pioneer in the marketplace, you stood for something tangible (quality, craftsmanship) amd people are willing to pay for that. In terms of the M series (at least up to the M6 run) I think Leica has NO competition. Clearly, Nikon and Canon have bowed out the the RF market and the the Hexar RF (for how nice it is) can't compete with the Leica in terms of RF clarity, and build quality. Leica should accept this and capitalize on it. Look at Rolex... the Oyster perpetual movement has been around for how many decades essentially unchanged and they still have a healthy market. Whether your a pro or a newbie at the end of the day, a camera is just a light-tight box with a hole on one end... so what should you treasure more??? The basics like ergonomics, quality, reliability... or a plethora of new features that promise to make things easier but in the end complicates things alot more?

As David Alan Harvey once said "The brain is a pretty good computer"

Sorry for ranting... just had my morning coffee.

-- John (ouroboros_2001@yahoo.com), March 28, 2002.


Reto,

And what would have been your answer to your question of "How do we improve the reliability of the M6"?

If you were asked by them 40 years ago how to improve the reliability of the M3 would your answer have been "Build the M4"?.

Would you have Mercedes, Rolls, and BMW scrap their electronic fuel injection and return to carbourators?

I think they would not. But I also believe none of those three would consider changing their grill shape such that it did not remind the owner of their past. A parallel with Leica there?

I suspect more than anything Leica wants to survive. Their business model for that appears to be to continue to produce the best crafted 35mm RF camera available, with no giant steps regarding the latest in technology.

They walk a narrow tightrope with heritage and technology sometimes in opposition to one another. I believe with the M7 they have paid attention to both. If they would forego either they would not survive, nor probably would they deserve to.

Best,

Jerry

-- Jerome R. Pfile, Jr. (JerryPfile@msn.com), March 28, 2002.


No,no, no!

I am not be any means suggesting that my example of the auto manufactures should go retro. I am making a comparison that Merc. and BMW have long surpassed Rolls and almost everybody else, but the image, solely image of Rolls as a leader still exists among some people. Like Leica, the innovation is over. Now they, Rolls and Leica in this comparison, trade on name and "handmade with care"; which may be the niche that they have to keep to survive. Ooops, Rolls has not survived! Swallowed by the Rolls of the modern day.

-- Reto (redcave@schweiz.com), March 28, 2002.


Get a life.

Godfrey

-- Godfrey (ramarren@bayarea.net), March 28, 2002.



Godfrey, uncalled for and not welcomed in this forum!

As for Leica, they obviously care more about tradition and values than making a profit. By taking care of tradition, they are also repecting the work of past famous photographers that use the equipment, and collectors alike.

If they were to listen to the potential segments in the market, they would've introduced the Leica M EOS 1V. Obviously they chose otherwise. Good on them for doing so. Leica don't make cameras to fulfill the technological dreams of potential buyers. They just make greay built cameras with virtually "unbeatable" lenses.

-- Kristian (leicashot@hotmail.com), March 30, 2002.


Good thoughts.

Hard to tell whether Leica are listening. However, I would say that Leica's success (the mystique) has itself bred a customer group that is very knowledgeable about optics, engineering, design and photography. So my take on customer feedback is that out of the hundreds of letters or e-mails it must receive, Leica ought to have a fairly high hit rate of very practical suggestions.

But, the very thing that leads a company to succes can also be the very thing that causes its demise. Who would have thought that Swiss Watches would have ever made a comeback in the face of the digital onslaught from Japan? They did by changing their business models and focusing new designs on the unique mystique of high-precision analog watches. Those manufacturers are probably as strong today as they were in their heyday.

The digital world is upon us already and there's no going back. However, one thing that I've been harping on for months now (to Leica on their Digital Forum) is that they really need to capitalize on the M Series' ergonomics, engineering and lenses and create the first Digital M. It can be done - there's room for the CCD/CMOS sensor and and other electronics (film cartridge and take-up spool) and Leica have been looking at this. There are some optical challenges but smart software enginering could solve those problems (edge refraction and some vignetting by having a glass protection plate over the sensor).

Badging other manufacturers' cameras may be OK and a quick and easy way to some profits. Imagine though what a Digital M8 would do or the company. Mystique, high precision-engineering and optics - a Swiss analog watch with an automatic or a quartz movement if there ever was one. Access to capital and design/ engineering (software and hardware) talent may be the limiting factors for Leica. If they can ovecome those constraints, I think they could be "back in business" just like the Swiss watch makers.

That's my 10 cents worth.

Phil

-- Phil Allsopp (pallsopp42@attbi.com), March 30, 2002.


Who would have thought that Swiss Watches would have ever made a comeback in the face of the digital onslaught from Japan? They did by changing their business models and focusing new designs on the unique mystique of high-precision analog watches. Those manufacturers are probably as strong today as they were in their heyday

So why do they need to go digital/quarz,or why should Leica.They have had their nich market for as long as Rolex.

-- Allen Herbert (allen1@btinternet.com), March 30, 2002.


Bob Lutz, who has recently taken the reigns of General Motors, is a classic example of a guy that does what is right and doesn't listen to stupid focus groups. You are going to see changes in that company that will be talked about for decades (and I'm not a GM fan)

-- DAYTON P. STRICKLAND (daytonst@bellsouth.net), March 30, 2002.

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