Protectionism is certainly putting a strain on companies’ ability to keep costs down and preserve margins. But, as you pointed out, costs aren’t the only consideration in certain industries especially those as consumer-driven as chocolate. Brand heritage is critical to the success of these consumer goods. I do not think British consumers would feel as positively towards Freddos if they were made abroad, as they are inextricably tied to the British identity (as we saw at our Flag Ceremony!). While consumers are not typically reading the label of their chocolate to determine where it was manufactured, they will certainly be made aware of the change – I anticipate this would be a prime example for the media to latch onto in denouncing Brexit should they be forced to manufacture overseas.
The need for ArcelorMittal to protect itself against the risks that protectionist policies have on its operations is critical. However, worse than a change in policy are fluctuating policies, which is likely to continue to be a pattern given the magnitude of our political divide. ArcelorMittal will have to negotiate long-term contracts with customers with uncertain tariffs in mind, and though a cost-sharing agreement would be ideal, ArcelorMittal will likely have to bear the majority of the costs and squeeze margins in order to come to an agreement and not lose large international customers. Because lobbying for a change in the leniency of policies and definitions will be a lengthy process, it is prudent in the meantime to begin building up production in the US to try to achieve scale and efficiency domestically. Domestically, strengthening relationships with automative and other players downstream in the supply chain should mitigate some of the risk they will bear internationally.
Very interesting post! To add to your point about educating customers about the merits of intraoperability: as a provider, this would actually be immensely useful functionality as there is nothing more frustrating than not having a complete picture of the patient’s medical history because it is fragmented across EMRs. I worked at a hospital that used a Cerner EMR in addition to several others for different purposes (clinic notes, OR notes, labor and delivery, etc) and not being able to cross-access information on a patient meant I spent a lot more time finding out simple information (poor labor utilization) as well as often didn’t end up having all the information I would want to provide the best care. Massachusetts is attempting to address this problem through a “Health Information Highway” (https://www.mass.gov/orgs/the-massachusetts-health-information-highway) that would be a mechanism for providers at different hospitals/clinics to share information about a patient (with their consent of course).
One risk to Cerner’s overall plan is the possibility that one EMR will come on the market that is superior to others in functionality (and affordable) and will gain wide enough adoption that most providers will no longer feel the need to interface with Cerner. We have begun to see this to an extent with Epic, and I would not be surprised if Epic continues to take market share from Cerner. If this is the case, Cerner may better allocate its investment in adding to its inherent functionality relating to documenting and billing in order to compete with Epic rather than the focus on communicating with other EMRs.
Great post! I found it concerning that such a visible company would deny the risks inherent in fossil fuel use, especially as these topics are widely publicized and studied today. In addition to being a good steward of society and complying with regulations, I believe there is a huge benefit in preempting any concern the public may have about environmental effects purely from a public relations standpoint. I think about BP and how much was spent in the aftermath of the Deepwater Horizon oil spill just to win back public opinion. I would also argue that consumers do have a choice of whom to buy gas from in high density areas, though this likely does not represent the majority of revenue for the company. Perhaps an ad campaign to promote awareness of climate change that touches on the basic concept of cogeneration would help public perception of Exxon’s operations.
This was a fascinating post and truly concerning considering how much we all rely on coffee! In addition to the challenges you mentioned, I worry that as supply dwindles, coffee bean growers will be able to increase their prices. This will certainly be stabilizing for the many people whose livelihood depends on selling coffee, but Starbucks’ costs increasing will put a strain on the company or cause them to have to pass on additional costs to the consumer. When considering these additional costs, the investment in hybrid seeds or additional R&D towards more efficient coffee growing and processing may actually be worth it long-term.
Similar to your suggestion, Starbucks has grown its revenues quite substantially in recently years mostly as a result of increasing food sales as opposed to coffee beverages (link to a Fortune article here: http://fortune.com/2016/01/22/starbucks-food-sales-rising/). This actually reminds of the IKEA case, in which a long-term investment in reducing environmental impact is necessary for the company to continue to have its essential raw materials in the future. From that case, we learned that companies in this situation have to be innovative in how they think about product development and product mix (eg real wood versus particleboard, and in this case coffee vs other offerings).
This is a very interesting topic and certainly a challenge that many retailers are facing today. I found it striking that there seems to be 2 discrete segments emerging among Nike’s customer base – those that will purchase directly from Nike and favor customization, and those that seek out the lower end merchandise that still have the brand and quality behind them. I would suspect that in the former category, Nike will still be able to compete on the basis of individual product quality as well as strong brand recognition. However I do believe they are smart to pursue channels such as Amazon for distribution of the mass-market merchandise. In response to your question regarding other distribution partners such as Nordstrom – I believe this channel can serve primarily as positive marketing and a strategy to keep the brand “elevated” in the eyes of consumers, but is unlikely to achieve scale and be additive to their goal of becoming more direct and efficient.