Great post highlighting the numerous benefits of the program, from working capital to improved human capital utilization and allocation via mobile app ordering. Another big advantage not highlighted here is the structure of the rewards program itself, which changed within the last year. Previously the program gave you rewards for each visit to the store – regardless of how much you spent, you received one “star” for the visit, culminating in a free item with enough stars/visits. The recent program change altered this from stars per visit to stars per dollar spent, e.g. the more you spend the more stars and subsequent rewards you get, rather than per visit. While this irked some cheap coffee drinkers (myself included), this had a drastic impact on operations. It turns out many customers were splitting orders to maximize stars based on the visit – e.g. a group of three would each individually order, so they each get one star. This would unnecessarily slow down the operations of the store, as three separate orders would have to be handled. This new model disincentivizes such a practice, aggregating demand into single orders in order to maximize dollar value and thus stars and rewards.
Although ATVI is indeed generating large profits from a transition to digital pricing models such as freemium and micro-transactions, do you see a risk of potentially alienating the customer-base by pushing too hard on such a model? As you noted, even mainstream games such as Call of Duty have introduced microtransactions, giving an edge to players who pay more. There have certainly been instances though where developers pushed the envelope with this model – from mobile games like Clash of Clans where paying players decimate non-paying players, disincentivizing certain customers from even bothering to compete with the “rich”, to Valve’s recent release of “Evolve,” which had a paid DLC expansion that did not really add any value whatsoever to the game and came off as a cash grab. Where does a company like ATVI draw the line between customer exploitation and value-add to the game and customer? Is it possible to draw such a line?
Excellent example of how technology is completely altering how certain businesses operate – in this case the operation being surveying areas. I’d definitely be interested in the continued expansion of drone land surveillance in the private and public sector; for example, it looks like the maps drawn from the drone are quite detailed, picking up small nuances in topography and etc. You hear about those hiking horror stories where someone gets lost in the middle of a mountain and has no way of contacting the outside world, while volunteers scour vast areas for the missing. I can see so much utility in say the National Parks Department having one of these drones running a pre-set flight daily to scan for any anomalies, potentially saving lives.
While I completely agree there are numerous merits to this program – from decreasing art education costs to the return of Native American artifacts – I can’t help but to think that this is not even close to a real substitute. Not only are you viewing it from a screen, already adding another degree of separation from the artwork, but you take the consumer out of the overall context of viewing art in a museum. The ability to see masterworks with your own eyes, among other art aficionados whom you can converse with in person, cannot be replicated through digital media. So while there is certainly a market for digital art, I have doubts that this will ever truly substitute or alter the operations of traditional art galleries and museums.
The last few sentences in your post reflected my exact sentiment on the matter – what good is a fancy stadium without a good team? I draw a lot of parallels with the Dallas Cowboys and their monster stadium in Arlington. While technologically incredibly advanced, with at the time the largest television screen in the world, it was more of a shining example of the team’s ineffectiveness in recent years as Dallas piled up L’s in a shiny building. As of writing, the Kings are 12th in an already tough Western Conference – in which case, is the technology merely used to distract disappointed fans? Is it an investment for when the team becomes a strong competitor? Or could the resources have been utilized elsewhere?
Interesting you should pose that question TK, relocating the entire populace is exactly what their former president advocated at one point: http://www.nytimes.com/2009/05/10/magazine/10MALDIVES-t.html
The problem TGB is facing is one that practically all agriculture-dependent companies will run into as climate change continues – how do you produce more for an increasingly larger consumer base as the population grows, with a decreasing product yield? And as you’ve noted, the use of improved irrigation techniques and rainwater harvesting are temporary at best. The real opportunity and the future of agriculture lies in your last point regarding the clone tea varieties. Similar to the Indigo Case, the entire agriculture industry will have to evolve in order to address the ever increasing demands of plant production.
Regardless of Exelon’s commitment to innovation and technical prowess, the biggest challenge to it’s long-term success is one of marketing, not operations. As you’ve already mentioned, the world has largely turned its back on nuclear energy post-Fukushima, a problem further exacerbated by the excess supply and subsequent low costs of substituting fossil fuels such as natural gas. With more nuclear facilities closing rather than opening around the world, it seems that Exelon and other nuclear energy leaders need to focus their attention on marketing the true value of nuclear power – that it is highly sustainable, clean, inexpensive, and actually very safe despite some very rare and unfortunately well known accidents. Until they can get that message across to regulators, governments and the public in general, no amount of innovation will be able to push this incredible technology forward.
Anytime government initiatives are listed, I always look to the big question of how they intend to fund the programs and ensure they are sustainable. This is especially important when it comes to infrastructure relating to climate change, as the impact will in theory continue to get worse and an escalation of corrective actions will be required to address the growing problems. This is where the NYCHA has come up with the solution of revenue-generating rooftop solar projects in an effort to both cut down their energy reliance as well as potentially fund their own project and ensure it is sustainable. My question would then be what else can they do to ensure the initiative is sustainable? Is this single solar project sufficient to drive the other legs of the program, and for how long given potentially increasing temperatures and bigger storms in the future?
Boeing’s efforts to reducing the industry’s impact on climate change are admirable to say the least. I do wonder though if there are any risks associated with overly investing in R&D projects that may not deliver significant monetary returns to its shareholders. I can certainly see great value in projects such as the carbon fiber aircraft where there is a 20% increase in fuel efficiency to reduce both carbon footprint and costs.
But if I was a shareholder I would be somewhat weary of the so-called “moon-shot projects” that may not generate any significant returns for the company, even if it does someday materialize. While certainly strong for the company’s PR, is there a point where the (potential) benefits to the environment no longer outweigh the company’s duties to its shareholders?
I can see the business case for this with the vast majority of tourists responding that eco-friendly is a big decision driver. But insofar as the actions they’ve taken are purely control based – as in certifying and monitoring further coral damage – they face an inherent supply risk, especially since climate change is a global concern and their actions alone will not be sufficient to prevent further change. As Spencer noted above, is there a case for a more pro-active measure to ensure proper supply, similar to the IKEA case? Another option in addition to re-planting coral would be to perhaps use artificial coral. Man-made reefs can generate similar effects to biodiversity and are easier to implement than farmed coral – is this something Kuoni should be investing in perhaps?