Great article, thanks for posting. Your question – what are the implications on the business if only a ‘soft’ Brexit occurs? – is one that almost every major multinational financial services organization is currently asking. To me, the biggest risk for Deutsche Bank of executing the most conservative strategy is if Deutsche Bank’s competitors stay in London, and then a soft Brexit plays out. This could put DB at a competitive disadvantage, since it will cost capital and potentially talent for Deutsche to move, while its competitors might not be making the same expenditures. Unless Deutsche Bank believes it has reliable and unique information regarding the likelihood that a ‘hard’ Brexit will occur, I believe it is critical for the financial services industry players to communicate with one another about their views on Brexit. With one voice, the multinational financial services industry will have a stronger lobbying position. Acting in the most conservative manner instead of working with the industry may ultimately be too much of a knee-jerk reaction – and thus not the most conservative strategy at all.
Really interesting read, thanks for posting. To address your question – is spending years lobbying a country’s government for Apple-only supply chain exceptions worth the risk of delaying entry into a market or losing share to competitors? – I don’t believe Apple can afford to tip-toe around entering the Indian market. India represents a strategic priority for Apple, and as you mention, it is the second largest smart phone market in the world. This WSJ article shows that Apple has been losing market share in India to low-cost smart phones made by both foreign and domestic rivals: https://www.wsj.com/articles/apple-looks-to-india-for-growth-1463512228. Because consumers’ smart phone brand loyalty is very sticky (i.e. people tend not to change their smart phone brands often, if at all), Apple must be sure it is one of the early entrants in the market. I believe another way for Apple to inspire a more immediate change in government regulation is to communicate directly with Indian consumers. Apple has the international brand power and customer loyalty to inspire the Indian people to demand retail outlets (and thus the latest Apple products), regardless of whether the components are produced in their country.
Thanks so much for your post on such a critical topic. I agree with your suggestions for short, medium, and long term supply chain management goals for the FDA. To respond to your question — can and should the FDA require pharma companies to keep heavy inventory in order to protect against possible supply chain shortages in the future? — I believe that the FDA cannot go so far as to require heavy inventory. Since the pharma companies have more expertise in predicting demand for the drugs, I believe it will be difficult for the FDA to mandate a specific amount of inventory that should be held for various drugs at various companies a) because there are too many drugs / companies to monitor in this way, and b) because I assume “safe” inventory levels across drugs could vary significantly. Instead, I believe the FDA and other government organizations should work with the pharma companies to incentivize them to manage inventory in a more prudent fashion. For instance, the government can use economic means such as tax breaks to drive increased inventory buffer for drugs that treat fatal diseases. Alternatively, the government can institute backward-looking penalties, in the form of fines or future tax increases, for pharma companies that fail to meet demand in extreme weather events. Another important impetus for pharma companies could be the media: if news outlets report on the pharma companies’ poor inventory management during extreme weather events, the public and government will demand action.
Thanks for your post on this topic. I think the question you posed in your last paragraph (will Tyson’s investments in plant-based meat become cost-effective enough to change consumer behavior?) is a really interesting one, because it calls into question the role of supply vs. demand. I think that in the coming years, plant-based meat will become a larger portion of consumers’ diets, regardless of whether Tyson makes the investment to change its supply chain. In other words, I don’t believe it will be Tyson that will ultimately change consumer behavior. The market for plant-based meat is still very much demand driven, and growing (see the link below). The other consideration for Tyson will be the consistency of its brand and customer promise. I wonder whether consumers of meat alternatives will want to buy from Tyson, one of the largest animal meat producers in the world. Additionally, I question the signal that entering this meat alternatives market sends to Tyson’s investors – will this be signaling an admittance that Tyson’s current business model is in trouble?
Thanks for your article, this is really interesting. To respond to your question, I don’t believe that Opendoor’s digital model is fully scalable, but I question whether this is an Opendoor-specific problem, or more of a general industry problem, and I tend to lean towards the latter. As you discussed, the real estate industry is highly complex and nuanced, and not every housing price movement can be determined by data alone. Particularly in economic downturns, I wonder how companies like Opendoor can survive. It seems that while machine learning can be used to accurately predict housing prices under normal economic circumstances, I struggle to see how the timing of the subprime mortgage crisis in 2008 could have been determined by a company like Opendoor. While brokers could weather the housing crisis (albeit, painfully), Opendoor could have easily and quickly become highly unprofitable if it had purchased sellers’ homes for inflated prices preceding the downturn. Unfortunately, while the service that Opendoor offers is highly valuable to consumers, I don’t believe it is scalable due to the current limitations on data to predict and pinpoint the timing of economic cycles.
This is really interesting, thanks for your perspective. I think the question you posed at the end of your article (will consumers continue to seek personalization, and if so, will they be willing to pay more?) should be one that retailers ask themselves before they invest in new technologies such as 3-D printers. My worry is that while consumers–particularly millennials–may in fact continue to seek personalization in their fashion items, I doubt that they will be willing to pay more for a customized item. Particularly for many of the items that Zara sells, namely, sweaters, shirts, dresses, pants, etc, the possible degrees of customization are limited. In addition, my intuition is that it is unlikely that someone will create their own sweater design and then be willing to pay Zara for it. After all, much of Zara’s customer promise lies in providing “high-fashion” items as determined and created by Zara, and that is what customers are seeking when they shop there. While customization has its merits, I worry that it actually has the potential to dilute Zara’s brand equity and customer promise if customers themselves are doing the work.