We just pulled into our motel for the night in Pensacola, Florida after a 2.5 hour drive from Dothan, Alabama. We had some fantastic visits in Dothan, including a company that manufactures fire hoses and one that recycles the precious metal from the catalytic converters of junked automobiles (see photos
below).
We had great plant tours at both of these locations, but what was really exciting was the interesting economics at play in both of these businesses and how they linked to successful business strategy. We learned that making fire hose requires substantial sunk investments, which affected competition and barriers-to-entry. Effectively competing in the metals recycling business necessitates creative solutions to intense problems of asymmetric information. These will be fantastic examples for our book and for course materials. We also got some great video (thanks, Daniel!) of these visits that you’ll be seeing soon!
Big day tomorrow here in Pensacola – we will update after our interviews.
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