The third thing I think about every day is that fundamental strategic question, how on earth are we different
from the competition? If a company has no points of differentiation, it rapidly devolves into a commodity player
with no chance for long-term success. Most obviously, differentiation comes from product innovation, which we
engage in on multiple levels. What we call “three-season product innovation” serves the current market with
fast-cycle product improvements. Over a longer horizon, we work on technology developments that will fuel new
products three years out. And we are always engaged in basic research that may yield breakthroughs in the long
term: a refrigerator, for example, that needs no compressor, or a washing machine that operates without detergent
or even without water. Meanwhile, I am trying to build our marketing capability into a point of differentiation. In particular,
our recent forays into direct marketing and delivery and our ability to generate positive cash flows are important
go-to-market innovations that have eluded many Chinese companies– because they are very hard to achieve.