Thank you, TOMsupplychain! This is very interesting. Regarding the reduction of shipping costs related to 3D printing, it is unclear whether the overall cost of 3D printing including shipping costs for raw materials, such as “3D printer ink,” is lower than the total cost of utilizing traditional manufacturing. The more manufacturing locations are scattered, the higher the total shipping costs could be as there is less scale merit in shipping of raw materials. Similarly, utility costs for production could also increase as each manufacturing location cannot utilize as large-scale merit as does a large centralized production facility. On the other hand, I do not think 3D printing would increase the risk related to cybersecurity for Adidas marginally because the manufacturing system would be more scattered and more independent of each other. If one of the printing facilities goes down, Adidas might be able to use other production facilities to cover up production. Even if the 3D printing production uses a centralized system to manage multiple printing facilities, it is difficult to assume the risk increases because the current centralized manufacturing system should have been exposed to the same cybersecurity risk.
Thank you, Yin! Very interesting article. I believe that the key to introducing EVs for everyone at scale is to reduce the unit cost per vehicle and make EVs affordable. To reduce the unit cost per vehicle, it is essential to manufacture a large quantity of EVs to achieve the economies of scale. And in generating a large demand, it is critical to craft people’s perception that EV is a cool item to own and that it is not impossible to own, although it’s somewhat more expensive than a regular gasoline vehicle. For this purpose, I believe EVs need the value proposition in that EV does not only save fuel costs in the long run but also enhances the owners’ brand equity or societal status among their communities.
To gain people’s mindshare, it does make sense for EV manufacturers to market luxury EVs first as Tesla did. I think at this point, Chinese market is at an early stage and Nio is still developing the brand awareness to attract people’s attention. I believe it takes time, but EV will never be an affordable vehicle for everyone unless it captures a large consumer attention and turns the attention to real demand.
Thank you, Danny! This is very interesting. I agree with your expectation that in the medium run, Foxconn pursues cost-effective operations through automation in the US. From the Foxconn perspective, pursuing automation in the US with the government’s funds completely makes sense because the US gives Foxconn the access to world-class engineers but with high costs. I believe Foxconn is seeking to build automated production facilities with the government’s funds to overcome the high labor cost in the US, reduce logistics costs by crafting production sites closer to US clients, and roll out the automated production facilities in other states to increase production capacities in the long run. As it is likely that local, low-skilled labors lose jobs due to automation, public officials should require Foxconn to train their US employees and develop their capabilities in the medium term. I also think the state government should also assess the magnitude of the influx of top-class talents that Foxconn can bring in as these talents would yield positive spillovers to local low-skilled labors.
Thank you for sharing your thoughts – this is very interesting! I believe WB should have a vested interest in sustaining the movie theater-going experience because WB’s access to an existing theater channel differentiates itself from the other digital platform providers. First, the theater channel contributes to WB not only by making box office revenues from WB’s films but also by promoting its films for WB’s other channels, such as DVDs and digital channels. As the other digital platform providers do not have the theater channel, WB’s marketing capability should be much stronger than that of the other digital platform providers. I also believe that consumers can hold only a few OTTs as their marginal utilities from an OTT would decline assuming each OTT applies a subscription model charging a similar price. To watch additional collection, a consumer would not spend as much money for the second OTT as the one would spend for the first OTT. Thus, I believe the OTTs market is close to a winner-take-all market so that WB should accelerate its acquisition of other OTTs, first in a specific subcategory, and then in the overall content, to establish the overall dominant position. From this perspective, I believe WB’s investment in Hulu is a good strategy, and RB should gain the control of Hulu and merge it with other OTTs that RB owns.
I believe it is justifiable for ski resorts to combat short-term unpredictability of climate change by water- and energy- intensive operations as long as the operation proves that it would not damage the surrounding environment permanently. I believe it is totally unfair that ski resorts and skiers have to pay additional costs for operation to cope with climate change, the results of unregulated energy-intensive industrial opeations. Thus, if I were a ski resort operator, I would first work with the government to craft and implement environment standards for artificial snowmaking operation in ski resorts. Second, I work with the government to implement a carbon tax and distribute its tax revenues to industries which suffer from climate change including ski resorts. It is reasonable for ski resort operators to receive subsidies to purchase or develop energy- and water-efficient equipment if the government secures tax revenues from the payers who cause climate change. Unless these initiatives are not implemented, unfortunately it is likely that skiers have to pay more costs and less people would enjoy skiing in the future, as skiing becomes scarce, luxury goods under climate change.
Thank you for sharing your thoughts! Regarding Brexit, I agree that McLaren needs to take action in delivering its products overseas as its export tariff goes up. However, I believe that reducing its shipping cost is not the only option for McLaren to cope with Brexit. As customers of McLaren are unlikely to be as price sensitive as those of the other auto manufacturers serving for middle-income households, such as Toyota Motors, McLaren should utilize Brexit to rebrand its products as a more high-end luxury item affiliated to the UK to pass on the cost to end users. Otherwise, McLaren needs to build production facilities outside the UK and establish a new supply chain based on the new location. However, building a new supply chain is difficult and takes time, McLaren should at least seek ways to enhance its product value, differentiating itself with its product identity. This might work well for foreign customers as they recognize that the products come not from local countries but from the U.K.