Elli, this is a very intriguing article.
The outcomes of Brexit still remain in the grey area. The current estimate of tariffs up to 10% of its exports will be a game changer. Given that JLR is Britain’s largest carmaker, there is an incentive for the local government to represent their best interest throughout the negotiation process with Brussels. To that effect, JLR should try to actively influence the British Government’s positioning by being a thought partner to this process. Having low to no import-export tariffs for this industry will be the best outcome. Otherwise, JLR will have to figure out how to mange the costs in order to remain competitive.
In terms of the restriction on talent movement that will be improsed by Brexit, I think that JLR will need to design an attractive program that will draw key talent. All major corporations in the UK will be facing a similar talent choke and the war to secure the best will be heated. Alternatively, JLR can consider relocating functions such as R&D outside of the UK / Europe, however I’m not sure what additional barriers they will face from this.
Dillon, this is a very thought-provoking perspective.
I believe that it will be very difficult for Atomflot to invest in new ships for any period longer than 30-years. The key uncertainties that Atomflot will likely face are 1) Changes in regulatory environment that reduces demand for ice-breakers 2) Barriers to tapping new shipping routes e.g., due to regulations 3) Freeing up of capacity as jobs can probably be done faster as polar ice thickness starts to decrease 4) Decrease in demand as ships are able to clear their own passageway through additional fixtures / new desgins
Within the 30-year time period, there are probably ways for Atomflot to manage these uncertainties. Given their current positioning, it seems likely that Russian regulations will continue to support their operations, justifying investment in new ships that cater to the demand in the Northern Sea. Atomflot should also consider expanding its operations to other shipping routes and the best way to lock-in some demand certainty is to partner with the local authority.
This is a very interesting space to watch, especially with mega ships that will be ready by late 2019. I’m curious to see how the introduction of larger vessels on these shipping routes will impact the demand for Atomflot’s services.
Thanks for sharing this Jon.
To your question on engaging other stakeholders, I think there might be ways for insurance providers to help with preventing / managing Baxter’s supply chain disruption from an operations perspective.
Insurance providers will stand to gain tremendously if Baxter is able to manage these disruptions better. For example, I would assume that Baxter had taken out a protection policy against natural disasters in Puerto Rico. If Hurricane Maria was a qualifying event, then Baxter should have received some form of a pay out from their general insurer. Separately, health insurers who cover the cost of patient care would also have been affected at the tail-end of the supply chain as the duration of patient care would likely have increased during this period.
For general insurers, weather tracking and climate change are key risks to be managed as this affects the premiums that are charged on policies that provide coverage on catastrophic damages / weather-related events. Baxter may be able to form a close alliance with an insurance provider who can provide advice on how to pre-emptively manage around natural disasters based on the data that the insurer gathers. Similarly, health insurers that are affiliated with certain hospital systems may be able to help Baxter with obtaining buy-in for pre-emptive measures that increase supply of healthcare products within these systems prior to a potential weather event.
Both these measures however depend on high quality predictive data that provides sufficient time to react – I’m not sure how feasible this will be given the nature of catastrophic weather events.
This is a well-written and thought-provoking piece Amar.
To your question, I think that it is very rational for a consumer to accept a win-win proposition such as this. The consumer will receive a high-tech cleaning device and have an improved experience from their other IoT devices around the home, all for ‘free’. iRobot will be able to penetrate more homes and this will increase the ability for devices such as Alexa to follow suit.
However, I believe that this will be a tough sell because the value proposition is very difficult to communicate to the end user. The lack of regulation around privacy and protection in this space is likely to be the consumer’s primary concern. In addition, there is a general lack of understanding of what data is collected and how this data is shared across different devices and organizations. This knowledge gap will also add to a reluctance of accepting such a deal.
If iRobot pushes ahead with such an offer, consumers will become wary of having a Roomba in their home. All of these combined could potentially cause more harm than good to the acceptance of a Roomba cleaner.
To your question, is Shake Shack over-indexing on apps and kiosks? Does its move toward digitalization inhibit its ability to provide comprehensive quality service to customers?
My answer is no – I see opportunities to serve customers in creative ways through automation.
I can see a world in which there exists a segment of people who will be happily served by an automated front-end. I believe that this will hold truer for fast food outlets as the experience of table service is already being done away with. However, the front-end automation should go hand-in-hand with the back-end process redesign / automation to ensure a smooth process flow. (you mentioned bottlenecks in the kitchen as a result of reduced wait times)
Automating the front-end will allow Shake Shack to deploy innovative ways of reaching the consumer. For example, consumers might not even need to come into a physical location for a burger. Instead, robots could become a delivery mechanism or even a ‘mobile kiosk’ that transports fresh burgers from nearby Shake Shacks into the surrounding areas. This reality is not too far away. Several months ago, in London, Just Eat (a food delivery platform similar to Grubhub), delivered the 1000th meal to the customer via its fleet of 10 robots.(http://www.telegraph.co.uk/business/2017/08/27/just-eat-deliver-1000th-meal-london/)
If this becomes a reality, I will miss the many Tasty Burger late night visits that has become a social gethering of some sorts.
I really enjoyed your thoughts in this!
I find it difficult to imagine a world where US-based manufacturers are able to compete directly with the low-cost manufacturing operations in Asia. In the absence of government subsidies and protective measures, the China and Taiwan based manufacturers who control 80% of global solar cell production will always have an economies of scale advantage that is coupled with lower labor costs.
However, the cost of shipping these panels to the US needs to be factored in. With the increase in shipping volumes, logistics service companies are investing in bigger capacity shipping vessels. For example, CMA CGM recently placed an order for 9 ships with ~22,000 TEU capacity (the biggest vessel ordered to date) to be ready by end of 2019. If shipping capacity increases in line with or faster than demand, this should create some stability in transportation costs.
Perhaps the best way is for the US to allow the more competitive Asia-based manufacturers in. This will support the installation of solar panels that increases adoption of clean energy as well as employment for those involved with the sales, installation and maintenance process.