You bring up some great points on how Brexit is going to impact Guinness in the short, medium, and long-run. I would imagine that Guinness is not alone in this situation and that the entire beer-making industry is impacted, given how globalized supply chains are. If I were an executive at Guinness within Diageo, I would focus on two key activities to make sure that the company is insulated from the added costs of realigning the supply chain:
1. Raising prices to pass costs on to the consumer – as a lone actor in the beer industry, this would be a hugely detrimental move to my competitive position. However, if the entire industry is aligned in this manner and simultaneously raises prices to pass on cost increases to the consumer, I can see a situation in which Guinness is able to recoup at least some level of costs from this change. Doing so would require canvasing to align the entire industry on raising prices, which might be difficult.
2. Raise subsidies from the government – the beer industry is not only a significant contributor to capital generation in Ireland, but is also a considerable employer. As an executive at Guinness, I would try to negotiate subsidies from the government to cover the costs of altering my supply chain.
Great article on Patagonia’s response to environmental degradation and climate change. I think that Patagonia is a fairly visible company in the fashion industry and is certainly in a leading position to enact change. The ability to pursue this change and to adapt the supply chain in manner that both minimizes waste produced and maximizes utilization of recycled materials and inputs is wholly determined by Patagonia’s resolve to innovate here. I would imagine that by establishing itself as a leader in environmental efficiency, Patagonia would be able to reap value as a brand and build loyalty within existing and new customer bases (particularly as millenials begin to look at the “ethos” of brands). I think that Patagonia would achieve much by publishing aspirational targets (to customers, shareholders, and company employees) of how it wants to achieve environmental efficiencies over a specified time horizon. Aligning the entire organization and its customers to the shared vision of combating climate change would serve to expedite any efforts undertaken – in this way, Patagonia builds accountability around this vision.
Joana, thank you for sharing this article. I think you raise several poignant questions on how the sporting good industry will have to adapt. I also believe that Adidas has no option but to take on Zara’s “fast-fashion” model – and that doing so requires considerable investments in data analytics and technologies that can digitalize the company’s supply chain.
I particularly liked your point on how Adidas would benefit from moving production closer to the end-user through 3D printing technologies in speed factories. This would certainly allow the company to tap into customer demand for “customized” products. As the retail world has moved online by embracing e-commerce platforms, I would imagine that customers would one day be able to design their fully customized shoes online prior to completing the purchase. Given the proliferation of e-commerce, do you think that Adidas is realistic in wanting to increase own-retail stores sales from 40% in 2014 to 60% in 2020? As I see it, delivering a customized end product to the shopper requires significant reliance on e-commerce platforms and less dependence on physical retail stores.
Thanks again for sharing this article!
Stefan, thanks for sharing this article. I was particularly interested in the use of ALM machines to build prototypes and eventually manufacture spare parts on-demand through airport service centres. Producing these parts on-demand would certainly minimize maintenance costs and customer disruption. I wonder if reduced customer dependence on Rolls-Royce’s maintenance activities would impact its MRO business.
My second question relates to the use of 3D printing technologies through the ALM machines at Rolls-Royce. As 3D printing technologies become more commercialized in the mass market, do you see an opportunity for smaller disruptors to manufacture spare parts for Rolls-Royce’s engines? Would Rolls-Royce welcome the “outsourced” production of spare parts by other manufacturers, or would the company like to preserve the production of these parts within its own supply chain?
I would imagine that the supply of wine will be hard to optimize as global warming extremifies. Crop yields and conditions will be harder to control, which would directly impact the volume of marketable wine a given vineyard or producer can bring to market every year.
I can see wine producers engaging in innovative ways to restrict the supply of wines in global markets in the coming years, in response to global warming. Wine producers will be incentivized to maintain the price of their wines by artificially restricting available supply, to match years when global warming has a severe impact on supply. Equalizing prices across periods through this “restrictive” strategy would allow winemakers to hedge against volatility in the industry.
Great question, and I too believe that there is significant room for testing the applicability of this technology within classrooms in less developed markets. As I see it, the issue at present lies in two areas: (1) the affordability of this technology and the idea of a digital classroom – AltSchool would either have to directly support the deployment of this technology in a developing world classroom, or would have to alter the pricepoint and potentially even the functionality of the offering and (2) the content itself – what a student requires in term of skill-set and knowledge in California would be dramatically different than what a student needs in Myanmar. If AltSchool can customize these technologies at an appropriate price point and in a customized manner for developing world contexts, I would say that Ventilla has a winning card in his hands as the rollout to developing world classrooms would be a sustainable initiative for the company.
Madeline – great article on the digitalization of baggage. I appreciated your second question on how baggage can actually evolve over time to facilitate the travel process from a customer standpoint. We have seen many attempts to introduce data analytics and tracking technologies into a variety of consumer products (take the FitBit for instance). What do you think will happen to the digital tracking of bags through advanced baggage handling systems such as this once suitcases evolve beyond their current functionality (i.e. if suitcases had functionalities such as trackers and automated weighing scales built in)? Do you see room for integration as a baggage handler or rather for displacement from these consumer technologies?