Analyzing the Economics of the Mustang’s Success
While most are fully aware of the impact the Mustang has had on U.S. culture in areas like music and film over the years, most probably would never think of it as a teaching tool for Wall Street.
Well, as noted in a recent Yahoo Finance report we stumbled on, there’s a lot that can be learned from the success of the Ford Mustang even for companies outside of the automotive industry.
“During the early 1960s, Henry Ford II, he didn’t want to build the Mustang,” said analyst Nick Colas, the chief marketing strategist at ConvergEX Group, in an interview posted on the site. “Lee Iacocca comes along and says you got to build this car.”
“It was launched, and in the first year over a million units were sold. And it went on to be one of the biggest profit generators in the company. Classic story about how product drives revenue growth, drives profitability.”
Even more, notes the former auto analyst, was how most of the profits for the first Mustang came from customization.
“In a very rare interview Lee Iacocca recently told Jay Leno that the car only cost $2,400 but every customer on average ordered $1,000 of options,” said Colas, “The margin on options was 60 to 70 percent.”
via [Yahoo Finance]