In his epic commencement speech to the USC law school grads in 1994, Charlie Munger mentions “scale” 24 times.
The advantages of scale are “ungodly important”, he points out.
Benefits of scale include reducing costs, raising prices and testing new markets.
In a beer business, for example, Anheuser-Busch operates at such a higher volume than Anchor Steam beer (based in San Francisco), that …
How many brands can you count in the following sentence:
“I needed some aspirin, a band-aid, ace bandage — and probably a jacuzzi!– after my zipper got caught in an escalator while my realtor friend and I carried a bubble-wrapped ping-pong table from a dumpster to our jeep and slipped on our California stir fry with broccolini take-out.”
If you counted thirteen then you are correct!
They are brands whose names are used in day to day conversations as generic terms synonymous with their product categories (e.g. more people refer to a “frisbee” (a brand) than a “flying disc.” (the category)).
Note: These brands are called by many different terms: “Colloquialized,” “Synonymous,” to “Genericized” to “Generic Trademarks”.
I made a list of the top 100 of these colloquial brands using one simple criterion: would I use the brand name instead of the product category if I was referring to the product/activity in a sentence (e.g. “I need a band-aid” versus “I need an adhesive bandage.”).