Thank you for a great article, Yin! I think the Chinese automobile industry at large is in quite an enviable position to emerge as the next major international player, which, to be honest, might be an unlikely suggestion just ten years ago. That said, you have described Nio’s issues with supply chain and production speed. In my understanding, there is also the problem of meeting international safety standards which have historically prevented the Chinese car industry from generating a lot of buzz abroad. However, if Nio is, in fact, able to meet said international safety standards, I believe it is only a matter of time before it is a major success despite the slow timeline/supply chain issues.
Nio is entering a market that is effectively resetting in many ways, with the advent of electronic cars fast-emerging and autonomous vehicles just around the corner. As a result, many large car manufacturers around the globe are having to rethink their supply chains, combustion engine designs, and marketing with the newfound pressure from governments and environmental advocates toward climate-friendly automobile production.
Like Tesla a few years ago, Nio is effectively starting from scratch but not weighed down by history or an existing customer base. Its focus on EV and autonomous vehicles continues to draw the interest, attention, and funding of many investors, helping to address the same cash flow issue that Tesla appears to be successful in fighting thus far.
Therefore, when Nio eventually does figure out its supply chain and capital issues, and hopefully clears the hurdle of international safety regulations, I see no reason why it can’t follow the path that Tesla has paved. And the EP9 would be the perfect way to ride this path! With its elegant design and elite performance as well as Nio’s visionary emphasis on environmentally-friendly production, the EP9 not only looks sexy but thinks sexy too. It’s beauty and it’s brains!
Thank you, Ron, for a wonderful and well-articulated piece! I look at this issue from two perspectives: 1) The situation in the UK with brexit; 2) The implication of a global supply chain
Regarding Brexit, I agree with Mr. Bourne. As he mentions above, perhaps we might assume that Brexit will result in a weaker British pound. This also could conceivably mean the cost of doing business in the UK may decrease. In addition, it is entirely possible that a favorable tariff is negotiated with the EU and/or the UK economy recovers over time from Brexit regardless. With Coca Cola’s acquisition of Innocent, I also wonder about the possibility of moving production out of the UK should domestic conditions worsen. Coca Cola probably has the infrastructure and ability to replicate Innocent and produce it in the United States (and perhaps that’s what they planned to do eventually when deciding to acquire the majority of the company). Moving production to the United Stats could not only help mitigate Innocent from the ensuing effects of Brexit but also perhaps expose it to other markets and grow its global footprint.
As for the global supply chain, I applaud Innocent for committing to the utilization of the entire globe to make its product. Doing so makes the company a proud ambassador of globalization, if you will. And it diversifies its supply chain, which can be a wonderful mechanism for minimizing risk for years to come. That is, economic downturn in one country may lead to a relatively lower raw material cost from said country, while a booming economy elsewhere may result in a relatively higher cost of raw materials from a different location. The hope is that if the supply chain is diversified enough, Innocent will avoid being overly reliant on one or two nations for its fruit, and the relative ups and downs will balance each other out.
Overall, at the present moment, I think Innocent is in great shape. Several companies will be impacted by Brexit but Innocent has the luxury of being owned by the largest beverage company in the world which retains a brand value second to none. Of course, we don’t have a crystal ball, so it will be interesting to see what happens. But as they say in the United States, home of Coca-Cola, “Innocent until proven Guilty.”
Great topic and a great read! I think it will be very interesting to see how the UK government decides to uphold tariffs against the rest of the EU and whether these tariffs will be industry specific or not. As you suggested, the UK would love to keep and grow its car manufacturing market and increase production of all automotive parts within the UK as much as possible. However, I think it is also important to consider how the tariffs affect McClaren’s partnership decisions, particularly for its racing division. McClaren had partnered with Mercedes Benz not too long ago to produce Mercedes McClaren, one of its more successful products. With Brexit these collaborations may be less likely to occur in the future.
Interestingly, McCarlen’s racing division had also long partnered with Mercedes Benz before moving to Honda for engine design/construction. Unfortunately, this resulted in poor-track performance forcing McClaren to end its partnership with Honda and instead begin working with UK based Renault this year. It remains to be seen how that partnership affects racing performance. Similarly, moving production to UK may also impact the quality of McClaren’s production cars, for better or worse.
That said, with regard to the discussion about sales and pricing of McClaren production cars, I am not sure we will see much of a difference in sales volume. McClaren is a premium sports car manufacturer; its customers are probably not highly price-sensitive, particularly if purchasing McClaren cars for its brand value and heritage (this includes both the 20% in Europe as well as the 80% abroad).
Finally, I believe that in the long run it is possible the UK economy will recover from Brexit and perhaps the pound will once again emerge as strong. To shift the majority of production and manufacturing into the UK could be risky. Despite Brexit, there seems to be a long-term trend toward globalization. Perhaps ignoring tariffs and regulations, which can change frequently over time, may be the better long-term play, especially if the UK economy recovers. Regardless, at the end of the day, we do not have a crystal ball. Thus, if I were running McClaren I would pick the production location that offers the best chance at high quality and specialized/experienced labor rather than focusing on tariffs and currency exchanges in order to maximize my success as a company.
Thank you for a great article, Phil! I 100% agree with your suggestion that Mayo Clinic should look to further advance its technology and invest in improving its supply-chain practices. Mayo Clinic has for quite some time now been regarded as among the very best hospitals in the country (currently ranked #1 in the United States by US News & World Report) largely due to their forward-thinking and incredible entrepreneurial spirit. They are often the first to integrate the newest technologies/treatments and often produce the strongest of clinical outcomes.
What bothers me is that so many other American hospitals don’t follow suit when it comes to technology practices. In my experience, as a physician-in-training, I have observed several healthcare providers look to Mayo Clinic for direction on how to improve their own respective practice of medicine. The medical community relies heavily on the Mayo Clinic for new research, new protocols, revolutionary ways to interact with patient, etc. which in turn generate a more effective delivery of care. We often implement or attempt to implement their recommended findings into our medical procedures and protocols fairly quickly.
However, when it comes to medical technology, for some reason, it seems that hospitals take a long time, as you have pointed out, to integrate new devices, instruments, or software until they have been well-proven in the market for several years. Perhaps this is due to the administrators unwillingness to take risks, perhaps it is the physicians who don’t feel comfortable with new tech, or maybe it’s because insurance companies make it difficult for reimbursement of new technologies/3D equipment.
Regardless, I think that for our healthcare system to continue to digitize as best as possible, we need to create an environment that better fosters medical innovation. Device companies and medical technology developers need to know that there is a broader market for early-adopters out there that goes beyond just the Mayo Clinic and a few others. Therefore, I would also recommend that the Mayo Clinic invest some of its endowment in existing or new medical device/technology companies. It can leverage its immense reputation to perhaps help these companies bring their technologies to other hospitals, while also maintaining a stake in their successes. As a society we need to find ways to align incentives for our patients, physicians, hospitals, and device companies to be most effective in the digitization of medicine.
Great article, Fred! Like you I really love ice cream and so hearing about this challenge and the future of chocolate-flavored ice creams makes me sad. However, challenge is just another word for opportunity and necessity is the mother of invention.
I agree with the action plans you have suggested in your article and others have elaborated on, such as teaching sustainable practices, diversifying portfolio of ice creams, and being politically active. These measures if executed successfully would be highly successful in addressing the chocolate problem. Nonetheless, I would like to add a different perspective on this issue.
You mentioned that 89.5% of “cocoa” land in Cote d’Ivoire and Ghana may be less suitable over time due to global warming. However, I am curious to know if this could also mean that land previously unsuitable for cocoa will, through global warming, become more suitable than it had been in the past. In other words, perhaps we see a world where cocoa is grown at a latitude more distant from the equator than we have previously?
Still, suppose this is not in fact the case. Suppose, we can’t slow down global warming and the impending shortage of chocolate becomes inevitable? What then?
In this case, I am thinking of perhaps a more outside of the box, controversial solution. That is, could Ben and Jerry’s make people start hating chocolate? As a socially responsible company, Ben and Jerry’s could slowly phase out chocolate and alert people to the associated health risks that its consumption can cause. This would, of course, disrupt their own business so they would have to generate an equally tasty and affordable alternative (maybe look into the Mocolate that Monica Geller was on the verge of developing in Friends). If they were able to somehow do this, they could not only spin it as corporate responsibility (making ice cream healthy for customers) but also enable themselves to control their destiny before global warming does.
Of course, I doubt making people hate chocolate is actually possible. So I would much, much rather live in a world where your solutions solve the issue and/or new locations for cocoa production emerge through global warming, as mentioned above.
Great article, Kunal! I think it will be an interesting challenge to manage the cost of digitization of this rail, as keeping the railway system affordable is probably a higher priority for most natives than keeping it advanced. That said, I’d also like to add another perspective to the comment list that has me strongly in favor of digitization. I recently saw the movie, Lion, where the protagonist Sheru, is displaced from his hometown of Ganesh Talai after falling asleep on a train. As a result, he has no idea how far he is from home and his life is changed forever.
More than 80,000 children in India are lost each year, many due to similar circumstances as Sheru. It is a massive problem in India, as orphan/lost children are often abused by natives, forced into child labor, and forever separated from their families. A neat side effect of digitizing India is that it may help resolve some of these situations quite easily and address an ongoing social concern that has the ability to make a huge impact in the lives of many children and their families. In addition to all of the benefits you have mentioned regarding commerce, tracking shipments, passenger convenience with regard to both time estimates and ticketing, I felt that this too was a nice by-product to add to the list.