It’s interesting to think about, as you mentioned, rollbacks in the emissions standards from 2010 affecting a company’s corporate strategy. I really like Kyle’s point about the consumer response to these design changes in Ford’s cars. To that end, I wonder what Ford is doing to help change actual consumer behavior to appreciate lighter-weight design, hybrid vehicles, etc. Maybe this is the marketer in me, but I think they should be sharing the changes in their vehicles with the public in an effort to push consumers to accept these slightly different vehicle designs and hybrid cars. Ford should even consider partnering with other automotive companies — but not necessarily for vehicle design purposes as you mentioned. I think some of these larger automotive manufacturers should band together in a coalition and agree to set certain emission standards (and achieve those by light-weighting, or focusing on hybrids, etc.). This coalition would literally force consumers to change their habits, and could also help educate consumers about the danger of climate change and the way the automotive industry needs to and is responding. The American Beverage Association has done something very similar to help change consumer taste profiles and push them to purchase less sweet drinks across the board. It is working well for the soda industry, so I’d be curious to know if it could be translated here.
I wrote about a very similar issue in my essay — but about the beer industry and how that will be affected by a potential NAFTA rewrite. I think you raise some interesting questions about what more Driscoll could be doing on the policy side, and also the role of the consumer in this issue. These questions converge for me given the number of industries / consumer products that will be affected by the rewrite. There’s an opportunity for Driscoll and the other members of the Produce Coalition to band together with, for example, the alcohol industry or the dairy industry as suggested above, to place even more pressure on politicians. I think this large consumer products coalition could and should also launch a campaign to speak to consumers about this issue. I think the vast majority of Americans don’t realize that the NAFTA rewrite could mean they are paying more for their strawberries, or their beer, or their milk. If these brands, which are so trusted and so part of our everyday lives, start talking to consumers about this issue, perhaps public pressure could rise and work with the industry pressure to push politicians to avoid a rewrite. Of course, there could be dangers to this strategy — we’ve seen that this administration can take swift action against entire industries or companies. Additionally, in such a delicate political environment in the country, would a move like this be seen as Driscoll or any other company “leaning left” on trade? And if so, how would that affect consumer loyalty?
Kimia — super interesting article. I hadn’t thought about how isolationism could affect companies that rely mostly on human talent. You pose an interesting question about how Cirque du Soleil should move forward given their current business model requires them to source unique and incredible artistic talent from all around the world. Unfortunately, despite their incredible brand name, I don’t think Cirque has the power to fight immigration at a policy level like some other companies might. Instead, they should focus on innovative responses. Part of that is new revenue streams like licensing / experiences, etc. But are they thinking about digitally broadcasting their shows? It could be interesting to figure out a way to use technology to develop a show where artists don’t have to be in the physical venue in person to perform — what about something like a hologram only show, similar to what Target did with one if its fashion shows? My concern would be that would detract from the experience and be capital intensive but it’s a thought.
I also think Gabby’s supply-side solution is particularly interesting. One thing she didn’t mention was that this could be a huge PR play for Cirque as well — imagine if they brought these training schools to underprivileged or underserved areas. Could they help change life trajectories for a number of kids while increasing their “supply” of artists? That would be a really interesting CSR angle for Cirque du Soleil. I’m not sure they have many other opportunities to play in that space, so I would recommend they look into that approach. Of course, it would require some upfront investment and likely human capital (i.e. hiring coaches etc.), but it could have a double benefit for the company (both longer and shorter term).
I wonder if OneHope could pivot given the issues it is seeing with wine production and climate change. In my mind, they seem to have an interesting opportunity here to build out an arm that serves as more of an innovation testing ground for the wine industry at large. The team is well versed in climate change’s affect on wine — OneHope’s Director of Wine is also doing research on innovative farming / harvesting techniques to help mitigate climate change risk. If the team continued doing this research and worked with other vineyards to implement new growing strategies, they could help the entire wine industry and maybe address some of the potential price and consumer behavior issues others have mentioned above.
I imagine the biggest challenge to adding this core competency to OneHope’s “portfolio” would be convincing the CEO that adding staff makes economic sense. New headcount would be required to research/work on these short and long-term climate change response strategies and also to sell these strategies to other winemakers. However, OneHope has a unique chance to 1) learn how to protect its own vineyards through research, 2) become a thought leader in this space, and 3) perhaps gain some additional revenue from sharing these strategies with the rest of the wine world. It’s a bit of a crazy plan because this could also just turn out to be a huge competitive advantage for them, but I think it’s one that they should consider.
The biggest concern I have after reading this (very well written!) article is around your first/second questions. I’m curious as to what UPS is doing internally to make sure they are staying ahead of the curve regarding the autonomous trucking trend. It is a delicate balance to strike — how do you pour a ton of capital into researching a project when regulations are constantly changing? Even though you know it might be the right thing in theory / in the very long-term, does it make short-term economic sense?
More importantly, UPS doesn’t strike me as a technology company at its core. I don’t think it should waste time / energy / resources developing autonomous driving technology like it is currently starting to do; however, to Faraz’s point, UPS risks losing their market leadership if they DON’T have these technologies ready to go when regulation allows. That brings us back to our chicken and egg scenario. I think UPS can solve that problem by partnering not with delivery focused firms like Uber, but with technology firms that are working on autonomous driving technology like Apple or Google or Tesla. If UPS partners/contracts with these kinds of companies, they gain first access to the autonomous driving technology; they don’t have to focus on developing that technology themselves, but can still provide input on how the technology needs to be created to work for the delivery world. I’m curious to know what you think about this approach as opposed to the internal research approach UPS is taking now.
Super interesting topic! One of the biggest issues I see with this strategy lies in your first question: Should Adidas pursue hyper-customization (i.e., reaching “lot size 1”) in addition to accelerating time-to-market? Ultimately, I don’t think it’s a question of should they… it’s a question of can they. The biggest hurdle to achieving both of these goals at the same time is consumer trends / preferences. We know that consumers are moving towards individualization in clothing and other personal products; they want customization beyond even what Adidas is doing with the city specific shoes. Given lead times and set up times for different product lines, it would be virtually impossible to achieve a “Nike ID” level of customization with an automatic/digitized manufacturing process. So – while Adidas might be able to use Speedfactory to somewhat customize shoes and cut down on labor costs/production lead times for more mass products, I’m curious to see what the brand team / product innovation teams think about individual customization and how a digital supply chain can respond to that consumer trend.
I’m also concerned about the PR backlash that Adidas might face with this digitized supply chain. From one of your sources, I understand Adidas is opening these factories near the locations where they are selling these products. As they expand and move into more developing nations, I can imagine that people will fault Adidas for not developing the labor force in some of these markets. Additionally, there will likely be a large capex investment to set up these production lines in each new place; to your point at the start of the essay, the ROI is incredibly uncertain and the investment incredibly high. Is Adidas ramping up marketing / branding / sales to make sure that the shoes it is producing in this new way are actually selling? I wonder how the company is strategically trying to make sure that investment was worthwhile.