Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?

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delivery

  • A copy of the full analysis can be downloaded by clicking on the link at the bottom of this blog entry.

     

    Shopping Experiences: Bricks-and-Mortar vs. Online Stores

    Let’s start with a comparison of shopping experiences in bricks-and-mortar versus online stores.

    There are three major advantages associated with in-store versus online shopping experiences. First, buyers are able to handle the merchandise. This basic sensory experience reduces much of the risk associated with online shopping regarding not knowing exactly what you’re getting. Second, in-store shoppers are able to take immediate delivery of the items they buy – no shipping costs or delays. Finally, to the extent that shoppers need to return items, in-store returns don’t require any of the packaging or shipping costs associated with online returns.

  • A copy of the full analysis can be downloaded by clicking on the link at the bottom of this blog entry.

     

    In Playing the Same-Day Delivery Game Part 1, I discussed the differences between shopping experiences that take place in-stores vs. online, and I noted that same-day delivery services aim to provide shoppers with much of the convenience of online shopping, without the associated delays. I then discussed the Last Mile problem, which has historically been an impediment to the cost-effective provision of same-day delivery services.

    In this part of my analysis, Part 2, I discuss various configurations of delivery networks.

     

    Essential Components

    The essential components required to operate any type of delivery network include (i) hubs, (ii) vehicles, and (iii) drivers. The minimization of costs associated with operating a delivery network entails several, simultaneous optimization problems involving these essential components.

  • A copy of the full analysis can be downloaded by clicking on the link at the bottom of this blog entry.

     

    In Playing the Same-Day Delivery Game Part 1, I discussed the differences between shopping experiences that take place in-stores vs. online, and I noted that same-day delivery services aim to provide shoppers with much of the convenience of online shopping, without the associated delays. I then discussed the Last Mile problem, which has historically been an impediment to the cost-effective provision of same-day delivery services.

    In Playing the Same-Day Delivery Game Part 2, I discussed various configurations of delivery networks, including hub-and-spoke systems, aggregator systems, point-to-point aggregator systems, and point-to-point systems.

    In this part of the analysis, I discuss the different options for delivery network operations and the barriers to adoption of same-day delivery services.

     

    Delivery Network Operations

    Suppliers who wish to provide delivery services to their customers currently have several options: (i) they can provide delivery services in-house; (ii) they can outsource delivery services to a third party; or (iii) they can provide modified delivery services, such as curbside delivery.

  • A copy of the full analysis can be downloaded by clicking on the link at the bottom of this blog entry.

     

    In Playing the Same-Day Delivery Game Part 1, I discussed the differences between shopping experiences that take place in-stores vs. online, and I noted that same-day delivery services aim to provide shoppers with much of the convenience of online shopping, without the associated delays. I then discussed the Last Mile problem, which has historically been an impediment to the cost-effective provision of same-day delivery services.

    In Playing the Same-Day Delivery Game Part 2, I discussed various configurations of delivery networks, including hub-and-spoke systems, aggregator systems, point-to-point aggregator systems, and point-to-point systems.

    In Playing the Same-Day Delivery Game Part 3, I discussed the different options for delivery network operations — in-house and outsourced, and others — and the barriers to adoption of same-day delivery services, namely, will enough customers and suppliers sign on?

    In this part of the analysis, I discuss why same-day delivery services have just now (over the past several years) appeared in the marketplace.

     

    The last mile problem has existed since the advent of transportation and communications systems. So why have same-day delivery start-ups suddenly been popping up now, over the past few years? In fact, what has changed since the late 1990s when Webvan, Kozmo, and other startups tried, but failed, to do the same thing?

    There are two separate factors contributing to the recent renaissance of same-day delivery services. The first is the improvement in logistics technologies, which have vastly reduced the costs of operating delivery service networks. The second is the implementation of same-day delivery services by Amazon and Google as a means to other ends.

  • A copy of the full analysis can be downloaded by clicking on the link at the bottom of this blog entry.

     

    In Playing the Same-Day Delivery Game Part 1, I discussed the differences between shopping experiences that take place in-stores vs. online, and I noted that same-day delivery services aim to provide shoppers with much of the convenience of online shopping, without the associated delays. I then discussed the Last Mile problem, which has historically been an impediment to the cost-effective provision of same-day delivery services.

    In Playing the Same-Day Delivery Game Part 2, I discussed various configurations of delivery networks, including hub-and-spoke systems, aggregator systems, point-to-point aggregator systems, and point-to-point systems.

    In Playing the Same-Day Delivery Game Part 3, I discussed the different options for delivery network operations — in-house and outsourced, and others — and the barriers to adoption of same-day delivery services, namely, will enough customers and suppliers sign on?

    In Playing the Same-Day Delivery Game Part 4, I discussed why same-day delivery services have reappeared recently, after having been tried and failed in the late 1990s. In particular, I note that over the past decade, there have been tremendous advances in logistics technologies, which have significantly decreased the costs of providing same-day delivery services. I also note that Amazon's and Google's forays into the same-day delivery market are driven by more than just providing delivery services. Specifically, the two companies are seeking to (i) grab a share of the grocery market, (ii) increase their respective shares in the product search market, (iii) generate access to consumer use data, (iv) generate direct access to consumers, and (iv) generate spillover effects to other parts of their technology ecosystems.

    In this part of the analysis, Part 5, I discuss how I think different aspects of the same-day delivery game will evolve.

     

    Will Enough Consumers Sign Up?

    Will enough people participate in same-day delivery services and use them frequently enough to support operations?

  • Patent Counts by Year

    I searched the USPTO patent database for all patents for which the patent abstract contained any of the following terms: cannabis, cannabinoid, marijuana, tetrahydrocannabinoid, or cannabinol. My search yielded 914 patents.

    As seen in Figure 1, there were only a handful of cannabis patents each year until the late 1990s. Cannabis patent activity started increasing at a roughly constant annual rate between 2001 and 2010. Patent activity leveled off between 2010 and 2015, then accelerated through to the present.

    Figure 1

    1 mj patent counts

    Patent Counts by Category

    Category Descriptions

    Based on patent descriptions, I assigned each patent to a category and subcategory. I defined the patent categories as follows:

    Delivery: Methods of or compositions for delivering cannabis into the body

    Detect: Methods of detecting cannabinoids in products samples or in people

    Extract: Methods of extracting cannabinoids from plant matter

    Grow: Methods of cultivating cannabis plants

    Package: Methods of packaging of cannabis products

    Plant: Plant cultivars

    Pre-Plant: Plant genomics

    Process: Methods of processing of cannabis, excluding extraction of cannabinoids from plant matter

    Receptor: Patents addressing cannabinoid receptors: CB1, CB2, agonist, antagonist, ligand

    Smoke: Devices and formulations for smoking cannabis

    Storage: Methods and devices for storing cannabis products

    Synthesis: Methods of synthesizing cannabinoids

    Terpene: Products and methods involving cannabis terpenes

    Track: Software for tracking cannabis cultivation, sales, usage, or trading

    Treatment: Cannabis compositions for the treatment of specific conditions