Whitney, thank you for the fascinating article. I am also a big fan of Patagonia and their mission, and seeing it quantified in your analysis was eye opening. All apparel and fashion companies face the same conundrum; their product is wasteful to be created, yet the company’s purpose is to sell, therefore produce, as much as possible. Should every company who claims to be environmentally focused shut down operations? It’s unrealistic to think that would happen, but there are multiple things companies can do that help offset their business operations.
One program you didn’t mention that that I greatly admire is Patagonia’s “Worn Wear” initiative. Through Worn Wear, Patagonia allows you to trade-in used items of clothing (that it will revamp and resell) for new ones, and get your items repaired by Patagonia’s experts. This program is fantastic, as it reduces our society’s obsession with overconsumption and the adage that new is always better.
This article enlightened me to the impact of climate change on the wine industry, one that I admittedly had not given much thought to since this is a luxury, nice to have product. I think E & J Gallo is taking steps in the right direction to mitigate against water risk, but more could be done.
E & J Gallo has used their substantial size to influence the industry, and it should be commended for doing so, but its size is the exact reason why the company should look inward and attempt to make their own production more efficient, since there will likely be large economies of scale. Can they possibly invest in water saving technology? Or look into reducing the total agricultural footprint it uses by streamlining grape varietals and SKUs?
Last but not least, your final point with regards to protected wine regions and naming regulation is interesting; will “champagne” cease to exist as the region becomes no longer suitable to grow grapes, leaving us with many varietals of sparkling wine but none named champagne?
Kaye, you have touched upon some key issues that Jet is currently facing. Successfully managing pricing in today’s digital world is a challenge at the top of every retailer’s priority list and Jet’s innovative approach is what made them so attractive to Walmart. However, the ecosystem in which Jet operates is fragile and I worry about the approach to integration they will take.
So much of their agile pricing strategy is dependent on their existing supply chain and I have a hard time believing they can remain competitive once they integrate that supply chain with Walmart’s. Integrating their supply chains will prove more challenging than predicted; Walmart operates on older, slight archaic systems, and I imagine Jet has a newer but less robust supply chain system. In fact, I believe this acquisition was highly beneficial for Walmart, who is deeply concerned with ecommerce and digital pricing, but other than an influx of capital, I don’t see much upside for Jet.
Shoko, thank you for the great insight into P&G’s world renowned supply chain. You addressed many of the aspects I wondered about in my previous career as a Walmart category manager!
The question you brought up about customization in order to meet the individual needs of end customers is particularly salient. The crux of this issue is something we’ve discussed greatly in class recently: network effect and a chicken or the egg situation. Retailers and suppliers both hold an immense amount of rich information, but are often reluctant to share with their partners. Trust needs to be built into these relationships in order to maximize the size of the pie and total potential upside for everyone. Digitization is making this increasingly easier in practice, but time will tell whether the retail and CPG industry titans will be willing to share their “secrets”.
Elli, I think your excellent article has highlighted the difficult position JLR currently holds. Similarly to some previous comments, I agree that between their two biggest risks of Brexit and technology changes in the industry, Brexit is the one to focus more resources on. Out of the subcomponents of Brexit that you discussed, the one that stands out most to me and seems to be of least concern among others is the risk to JLR’s global talent pool.
Should JLR focus more of its energy on attracting and retaining highly skilled and educated talent to manage the business, or should they hedge this risk by investing in more automation and technology to reduce their overall dependence on human capital? The latter seems more straightforward and likely to yield measurable results, but I believe they should adopt the former; competition for global talent continues to increase and the only way they can prepare for future, currently unknown risks is to have the best people possible on their team.
Great post Troy! Based on your paper and general knowledge I have of the automotive industry, I believe GM is highly exposed to risk. The actions you have proposed are excellent and will move them in the right direction but much more needs to be done. Your question around preparing for political upheaval particularly resonated with me. In my opinion, the problem with putting together an action plan at this time is not only the amount of uncertainty and risk in regulation, which you mentioned, but the ambiguity in the direction the current administration wishes to take. We are in new territory and unchartered waters at this time in history, and companies who are highly invested in NAFTA have the most to lose.
My guidance for GM and others facing these risks would be to work out the multiple possible scenarios that could occur in preparation for potential changes, but not to act in any significant manner until we know more about regulatory changes, if any. Due to the automotive industry’s tight margins and competitive nature, “getting it wrong” in one direction or another (i.e. investing in the wrong plan) could be damaging beyond repair for GM.