Graham, this article was fascinating! How a grocery store had such a huge impact during a natural disaster is impressive.
When reading the body of the essay, I was primarily thinking in the questions you ended up raising at the end.
The role H-E-B played in the days after the hurricane should be an alarm for government entities in charge of emergency relief. There is no argument against the fact that the company took the missing role of the government during those days. This is not to say that H-E-B did wrong, but instead to think what happens in cities in which there is not such a socially responsible and prepared company. The government nevertheless could leverage on these cases and companies, and partner with them – by providing resources or even incentives – to be able to react faster when disasters happen.
On the final question on what the motivation behind H-E-B efforts is, unfortunately we do not have enough information to assess if it is profits or not, but one could fairly assume it was not in the case of this hurricane, given that (1) the company did not play with prices during those days – if not the memes in Figure 1 would be much different -, and (2) several initiatives such as using helicopters to airlift drivers would not stand a P&L evaluation.
This article has been very interesting and in my opinion a great example of a company struggling to catch up on something it should have noticed 10 years ago. It is a bit surprising that Nordstrom reacts and seriously starts investing in technology only when its sales drop and the offline retail industry as a whole is hurt.
There is a key issue directly related to the second question that I would like to raise: customer experience. The mentioned digital innovation at Nordstrom – DS Co enabling drop shipping -, according to me, is on one side passing the inventory and cost risks to suppliers but on the other side acquiring a huge customer experience risk for Nordstrom.
Having worked at an e-commerce company in Nigeria that tried to leverage on drop shipping to quickly expand its business, I can say that it requires a very long supplier education process and until this is done it completely takes out from the company the control of the customer experience.
In a context in which customer retention – given the strong and growing online players in retail – must be key for Nordstrom, is it the wisest decision to use digitalization for drop shipping? I believe there are many more uses to explore first.
Great article and topic Anusha. UPS is certainly facing critical times given the advancement of technology and new big-pocket players in the market – such as Amazon and Uber.
On your first question on how UPS can do to manage the regulatory uncertainty, I think this actually raises a big opportunity for the company. All things being equal – equally investing in the technology -, there is a fair chance that the company who manages better the political relationships on the topic could get a bigger gain in the regulatory outcome – even knowing how unpopular Uber is on the regulatory field for instance. I am thinking on scenarios like regulations that could require human supervision for a period of time or regulations that would allow the system in certain areas / routes in which the use of these vehicles could only make sense with volumes and frequencies like those of UPS.
Finally, on the question of resizing of the workforce, I believe there is sufficient time – and expected business growth in this time – until the technology is operational, so the company can easily plan capacity accordingly and not have to reduce the number of employees. Employment in the industry will probably not grow though, but this is sort of the expected outcome – and one of the major gains – of autonomous trucks.
Really interesting article! I read it paying thorough attention to the measures Nestle has taken so far to address this issue, and in my opinion these measures do not have any real impact.
The problem in this situation is that Nestle’s business model relies precisely on water consumption, so there are no solid incentives for the company to reduce its impact, rather there are incentives for it to try to somehow offset or even hide that impact – as we have seen with the strong lobby they do.
Regarding your first question on the role of governments when it comes to natural resources used by corporations, I believe there should always be public offices actively following these topics, and even if unfortunately it goes against some companies’ P&L, enough constraints must be set in place so that companies see no other option more than taking meaningful measures – as it would be if Nestle started investing heavily on converting non-potable water.
Rob, this is a great article about a very interesting and controversial topic – Brexit and its impact on manufacturers’ supply chain.
First, I think Nissan did an impeccable job handling the issue so far, mostly by its decision to go strong against the government, threatening with reduced investments or even plant closure. I imagine it must be very difficult for companies to plan what steps to take in this situation given the level of uncertainty on how things will evolve – if Brexit will happen at all, which tax would be applied for each industry, etc.
Second, on your question on to what extent increased protectionism favors ‘sweetheart deals’, I worry about how many concessions like this one with Nissan the UK can actually make. It begs the question on whether the government has factored all these issues when deciding Brexit and what was their long-term perspective. Frankly, from the information I have, I do not see how the benefits of Brexit will offset the costs either for the UK or for the manufacturing companies.
Zack, this is definitely a very interesting topic and it instantly reminded me of the impact of protectionist policies in Argentina in the last 15 years.
Based on this personal experience, when governments and companies align on building barriers to entry to foreign products, they are only affecting customer choices and hurting the companies’ ability to improve their own performance based on international standards.
We do not know exactly the reasons on Samsung price advantage or on Whirpool fearless fight to stop this situation from happening, but as described it sounds like Whirpool is trying to get an easy way out of these troubles instead of focusing on building competitive advantages – maybe the answer to this problem is for Whirpool to realize that it might not make sense to keep producing washing machines in the US in the long term.
Finally, I am particularly surprised by this situation since it goes against my belief that much of the success of United States as a powerful economy comes from its constant efforts towards free-markets capitalism – as Chip mentioned.