bl1884

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On November 20, 2016, bl1884 commented on Conquer Disney World with a Flick of Your Wrist :

Fascinating article – Definitely brings back many happy memories! I hadn’t previously thought about just how apt theme parks are as a study of operational efficiency. It is clear bottlenecks, ride capacity and utilisation, line times are all key issues preoccupying management. It’s very cool that the wristbands, which were designed with an eye on managing overcrowding in the park and maximising efficiency have actually turned out to be great tools for revenue generation and delivering customers that magical Disney experience. I do wonder about privacy issues here – will customers feel exploited if – as you suggest – their every movement within the park is tracked, and Disney then tries to monetise guests at each opportunity?

On November 20, 2016, bl1884 commented on John Lewis: the omni-channel integration leader in the UK :

Thanks for the article! Click & Collect is much more advanced in the UK than most other countries, and whilst it may sound simple to treat your stores as mini-warehouses from which you can fulfil online customer orders, it is actually extremely painful as it involves a complete overhaul of the distribution system. You need to track stock of every single item in the store to be able to offer customers an accurate view of availability when they are browsing online, which is far easier said than done! Another UK retailer, Argos, is also very advanced in this regard. They operate over 800 stores in the UK and have a real-time view of every SKU across its entire estate – over 1/3 of their sales are made through click and collect so having an accurate view of stock is critical to the business’ success!

On November 20, 2016, bl1884 commented on Digitization in Video Games: Taking Advantage of Gamers :

Very interesting article. My perception is that mobile games/apps are not for serious gamer and I was surprised that sales will surpass those of PC games for the first time this year!

As some of the other commenters have noted, the ability to update games after an initial sale has been made to users means first releases often have not gone through the same rigorous product development process that a physical release necessitates. App developers in particular often release games in “bare bones” states as they hope to refine the game based on customer feedback, and not invest too much up-front in the (likely) event the game completely flops. I saw an interesting article on this topic, related to Pokémon GO which argues that because the developers released a fairly basic game, they have potentially left billions of dollars of revenue on the table (they are still refining and updating the game, adding new features including options for monetization, but the initial world-wide craze that occurred when the game was first released will not be repeated) You can read more about the implications here: http://www.forbes.com/sites/davidthier/2016/09/28/revenue-ran-away-pokemon-gos-lost-billions/#75a50d3c483c

On November 20, 2016, bl1884 commented on BMW – Drive now, analyze later? :

Thanks for an interesting article Josefin. I was struck by the stats in the infographic you posted from the BCG report; the anticipated market size for car sharing in Europe is c.3X that of the US. I understand that is largely a function of having a higher proportion of the population living in dense urban environments, which is the only place this model can really work effectively. Presumably the trend towards urbanization in many corners of the world will serve to create a fertile market for this type of service, as owning a car makes less and less sense.

I imagine the move to autonomous vehicles will attract other auto makers into this fleet management role. Given this is so different to their traditional function as a manufacturer (i.e. working out how many cars to deploy, where, pricing for short journeys etc.) I think BMW has played a masterstroke by making an early entrance into the market, and will be able to develop knowledge and capability now, which will provide it with an advantage over competitors in the years to come. (I note BMW is pursuing this venture in partnership with rental firm Sixt, and I would have thought similar strategic partnerships will be commonplace in the future)

On November 20, 2016, bl1884 commented on Getaround: Using Digital Technology to Maximize Car Utilization :

I agree with you that traditional car ownership is under threat given the rise of car sharing schemes, like Getaround and Zipcar, although the model only works in dense urban environments where there is sufficient supply to make it convenient to potential users. I understand the benefit of being able to earn extra cash renting out your car whilst it is not being used, however as some of the comments above mention, there has to be a great deal of trust on the part of the car owner in letting a stranger use their vehicle. I imagine this coupled with the potentially high costs of something going wrong have limited the number of cars available and therefore the company’s growth.

I’m not entirely sure of the value of a service like Getaround in a world of autonomous vehicles; presumably fleet owners (whether they be the auto manufacturers themselves, or services like Uber) will manage their vehicles centrally (employing a direct-to-consumer model), rather a Platform model (like Getaround) which is necessary to match the many potential car owners with the many potential renters.

On November 7, 2016, bl1884 commented on Water Water Everywhere, Not a Drop to Drink :

Very interesting post Ali – I agree that water scarcity is often viewed as a less prominent issue than some of the other “sexier”climate change talking points. As some of the above comments indicate, there is a very real danger that is posed by a lack of available water resources, particularly in the developing world, and I agree the issue should be highlighted.

I think a key issue with regards to water scarcity is that demand for water will continue to rise as industrialization and urbanization in emerging markets accelerates.  Rising global temperatures may constrict the supply of water, and a less predictable climate means there could be greater uncertainty and volatility in future supply. [1]

Many manufacturing businesses have plants located in these developing countries, and face potentially huge impacts to their operations if they are not able to access an adequate, dependable supply of water. I wrote about how water scarcity is affecting coca cola (https://digital.hbs.edu/platform-rctom/submission/always-coca-cola/) – they have experienced first-hand the perils of (perceived) misuse of scarce water resources. The Coca Cola company was forced to close a manufacturing and bottling plant in India in 2004, when it was accused of exceeding its permitted use of water during at time of drought. There was great public backlash against the company from the local community (many of whom depended on agriculture – and availability of water – for their livelihoods). In addition to the plant closure the company lost customers and suffered severe negative brand impact.

I think the above example serves as a salutary tale for other water-intensive businesses as to the potential effects of mismanaging the most necessary of natural resources. As other posters agree, more needs to be done to highlight and mitigate the issue.

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[1] Giulio Boccaletti, Sudeep Maitra, and Martin Stuchtey, “Transforming Water Economies,” McKinsey & Company, 2012, p. 1, accessible at https://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Sustainability/PDFs/McK%20on%20SRP/SRP_09_Water.ashx

On November 5, 2016, bl1884 commented on Amazon and Climate Change :

I think the response required to ensure sustainable development of Amazon Web Services is far easier than managing the physical/environmental impact of the retail business.

As technology becomes more efficient, it should be relatively straightforward to make improvements of the energy consumption at the data centres. As you mention, as Cloud Computing becomes more prevalent this has the added benefit of reducing use of inefficient on premise servers. There is another interesting blog post on the AWS business here: https://digital.hbs.edu/platform-rctom/submission/power-struggles-at-amazon-web-services/

The retail business is an entirely different matter. The value chain is complex, involving a disparate base of suppliers, Amazon stakeholders and customers. The scope for a sustainability program here is much wider, and needs to take an integrated approach to ensuring efficiencies in more varied activities such as sourcing product, packaging efficiency and delivery/transport. I think you make an interesting point in your additional recommendations: can Amazon incentivize customers to adopt environmentally behaviour (through marketing) / make environmentally friendly purchases (through sales and incentives)? For me, the appeal Amazon has to its customer base is built on the pillars of wide choice, great value/low cost and convenience. It would be interesting to see if they could further improve their customer loyalty by offering environmentally friendly products/packaging/deliver, and whether this would further differentiate them from competitors, or whether they would lose appeal due to (potentially) higher costs. Personally I fear the effect may be the latter

Your question “Will Tesla’s move into the solar panel industry create strategic advantages that allow them to surpass Ford Motor Company’s renewable energy efforts?” is an interesting one. The threat posed by Climate Change, and the contribution of CO2 emissions from traditional forms of transport to this is so great that I wonder whether we will see more collaboration between automakers in the future with their move to sustainable/renewable energy sources. This was the spirit in which Elon Musk declared that all of the IP relating to Tesla’s patented technology would be made publically available (https://www.tesla.com/blog/all-our-patent-are-belong-you)

In this statement Musk notes “given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis. By the same token, it means the market is enormous. Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”

Your original question implied that there is competition between automakers as to who can produce the most sustainable energy / the most cars powered from renewables. I would like to see a move away from competition in the production of energy and the technology which enables cars to run on electricity, and rather the automotive industry collaborate on this front. Carmakers should focus on making great vehicles which customers want to buy because they drive well / are attractive from a design standpoint / have great features / are comfortable etc. Consumers should not be forced to compromise between buying a good, reasonably priced car, and a car which is good for the environment.

On November 5, 2016, bl1884 commented on Tesla talks Climate change :

I’m a huge fan of what Tesla has done for electric cars – without the introduction of these aspirational vehicles, I think we would still be stuck in a place where electric cars are viewed as a niche product for “tree huggers”. I’m excited to see what impact the introduction of the Model 3 will have on supporting infrastructure – electric charging points are certainly becoming more commonplace, but are still relatively sparse which is an inconvenience, especially when compared to the omnipresence of traditional gas stations. Several hundred thousand new electric cars taking to the roads over the next few years should change that.

I’m also intrigued to see how Tesla fares in its efforts beyond cars; the introduction of the Model 3 means Tesla will have passenger vehicles covering most of the retail/consumer segment, but the company is also working on the development of heavy-duty trucks which could revolutionize the freight transport industry, as well as a concept for high-passenger density urban transport concept. I think if Tesla can have similar success in these segments, then we will see observe a paradigm shift where electric transport becomes the norm for all forms of (land) transport, rather than a relatively niche product for tecchies/environmentalists. You can read more about the aforementioned initiatives and their expected benefits in the Tesla Master Plan (part deux) https://www.tesla.com/blog/master-plan-part-deux

On November 5, 2016, bl1884 commented on Launch of the Toyota Mirai :

I’m interested to see how the battle for prominence between electric (battery powered) vs. fuel cell plays out. I think this situation is analogous to the HD DVD vs. Blu-ray competition, where ultimately only one solution will be adopted by the market. Historically, it seemed like hydrogen fuel cells had the advantage, but in the past few years, batteries seem to have gained the upper hand as the technology has evolved, and manufacturers like Tesla proved that you can make exciting, high quality luxury/sports cars which are powered by batteries. Your post mentions the barriers to consumers adopting the product, due to the lack of hydrogen refuelling stations. I think this is a critical issue – battery powered cars are further along the consumer adoption curve, and as such we will see more supporting infrastructure built out to support them, reinforcing their relative advantage over fuel cell powered vehicles. If Toyota (and other manufacturers) don’t produce a significant number of quality, hydrogen powered vehicles which sell in good quantities, then I fear the hydrogen fuel cell will be dead in the water.