1) Yes, this is a risk. But in 2014 their gross margin was of 70%. And from their annual report my estimation is that only 3% of their COGS is due to labor cost. So the commodities are more relevant to this analysis than labor.
2) I guess Thailand is a good choice because of labor skills than actual silver production. For silver though, Pandora can probably buy from “relative” close countries – Australia, China, India.. (I didn’t find the exact location from where they buy their silver). They also have benefited from a low silver price (past 10 years). But of course, Pandora is highly affected by this raw material’s price fluctuation and this will affect their margins.
3) I believe than definitely need to diversify their portfolio. I mentioned a few examples on Yasmin’s posts. Regarding their expansion opportunities with current categories, charms sales grew 26% in the past 5 years. According to Deutsche Bank, a few markets are becoming saturated (like USA) but they still have space to grow like Europe and Asia.
I searched a lot about how they keep their quality, but couldn’t find any substantial information about it. I’m guessing they are keeping it a secret. I found a interesting video on youtube about their manufacturing process. All hand finished jewellery.. (https://www.youtube.com/watch?v=onFPhphf_yY&list=PLze-PWxh3GmmItV4uIvgANfSfpl9TBB7Q)
One of the opportunities for the increase growth of Pandora is actually diversify their portfolio (so they will became less dependent of the charms). And they started investing already: other bracelet styles, earrings and necklaces. Also bringing new materials such as gold and their “pandora rose”. The charm market is a risk because can go out of fashion and also don’t offer good price elasticity.
To compete to Tiffany’s directly, I believe Pandora will need to invest in diamonds (I believe Pandora launched 2 rings with tiny diamonds on it, and no more). Deutsche Bank’s initial coverage suggests that Pandora’s key competitor today is Signet (Kay Jewelers and others), because they are a more “midrange jewelry market” and they highlight the fact that they prefer “diamond vs. charms”. They also mention Tiffany as an interesting peer, but more for a benchmark approach since they have different positioning and target costumer.
I agree that through put rate is a key strategy to eat at Chipotle. I imagine that the fast food and now the casual food business are often looking for examples in making sure they keep up with speed in producing the food. McDonnald’s for example changed their assembly process when they noticed that the hamburger was a bottleneck in making the entire sandwiches. Regarding the simplicity of their menu, they managed to keep it simple and still deliver pretty good combinations to their customers (which is great)!
I love Pixar movies! And I really enjoy learning more about the company. Their consumer focus and country oriented seems to be very succesfull. Their movies also create an impact even in the Brazilian culture. One exemple: I participated in a leadership training about team work and the speaker based her class in the Pixar movie “The Incredibles”. About workspace, the photos you uploaded reminded me of “Up”. I wonder if these offices’ design helped them better understand the relationship of the protagonist with his house.
I really like this Brazilian company. Two additional information related to what you wrote:
1. Because of their sustainable approach, Natura also don’t produce/sell nail polish.
2. Natura recently became a certified B corporation (https://www.bcorporation.net/community/natura)