Interesting post! I see this as a brilliant marketing move by Amazon. Also, by having first-mover advantage, they can acquire early adopters to build a user base to test and improve the product offering. With that being said, what can Amazon do to improve the dash button product? The first thing which comes to mind is prices. Many people, including myself, who purchase basic household goods online, do so because of the ability to shop prices to get the best value. When using the button, how do we know we are getting the absolute lowest price for the product? Second, what can Amazon do to help customers understand when the product is in-stock vs. out of stock. I can think of a scenario in which a family member orders a product (like detergent) only to find out a few days later that it hasn’t been delivered because Amazon is out of stock. Lastly, what prevents the manufacturer of the product (e.g. Tide) from making its own button? How does Amazon use digital technology in this case to prevent that from happening?
Cool article. As someone who purchases my clothes online, I understand the value proposition which Mr. Porter provides. With that being said, I was thinking about what else Mr. Porter should be doing to further improve its business model. Specifically, what other things can it do with digital technology? The e-commerce space for men is very competitive and any additional edge that digital technology can provide is important. The lowest hanging fruit which comes to mind is building a strong digital user community. I previously worked at Rent the Runway where I learned how powerful an engaged digital community can be. Ways to do this is building avenues for users to engage with one another (i.e. forums, chat features, etc.) as well as with Mr. Porter (i.e. ability to comment on products, immediate customer service through video). Building this user community by leveraging digital technology will allow Mr. Porter to strengthen the moat around their business.
Thanks for posting this, Gabby. Prior to reading this, I knew about Nest but did not know they had converted most of their business from B2C to B2B. While it appears Nest is currently focused on growing out their B2B platform, I’m curious what else they can be doing on the B2C front to grow their market share and take advantage of their first-mover advantage. One thought which comes to mind is to change their business model and give the devices away for free to consumers (or for a very minimal cost) and charge a monthly membership fee. The fee would be justified in the sense that customers would be saving more on their monthly utility bills than they would be paying for the monthly fee. I see this similar to what Apple did with the iPhone. This ensures that when Nest introduces new models in the future, users continue to use the product because all they have to do is continue paying the monthly membership free and get the device for free.
Great post, Madhur! I’m curious: what is Skootar doing to insulate itself from its likely largest competitor, Uber? In large cities like New York, Uber is the leading company in last-mile bicycle delivery. What kinds of competitive advantages can Skootar build using digital technology to help insulate itself from this competition? One idea that comes to mind is for Skootar to build electronic systems which link into their customers databases / electronic systems. This would even further streamline the process for customers as well as build additional stickiness into the relationship between Skootar and the customer.
Great post, Kamisha! I’m curious how JPMorgan Chase is leveraging digital technology to improve its product on the lending side? Today, the traditional lending process for small businesses is a lengthy and arduous one. Startups like Bond Street have streamlined the process, making the application process take only 1-2 hours and generating a lending decision within days (as opposed to many weeks). While payments and banking are a large part of JPMorgan’s business, lending is just as important. Is it developing this capability in-house? One risk of developing it in-house is that banks are notorious for being large, slow-moving bureaucracies in which change takes a long time to take effect. Given how fast the lending space is changing today, it may behoove them to acquire a player like Bond Street.
Great article, Carolyn.
“Producing 1 hamburger requires 660 gallons of water, which is enough water to shower for 2 straight months!?” I was shocked to read that statistic. Unfortunately, I expect it to only get worse. More and more people, particularly in emerging markets, are going to be able to afford hamburgers from fast-food restaurants like McDonalds over the foreseeable future (this is due to rising incomes and movement into the middle-class). Accordingly, McDonalds is going to be highly incentivized to keep its offerings the same as they are today. Assuming there is little regulatory action and/or changes in consumer awareness, the only way I see McDonalds changing its reliance on beef is higher beef prices or the introduction of high-quality, low price lab grown meet.
Interestingly, McDonald’s has a considerable R&D budget each year. Do you think they should be investing heavily in developing lab-grown meat solutions or diversifying their menu away from beef?
Great post, Alexandra! I think Chipotle is being smart by focusing on pricing contracts and and being flexible with their menu. But like you, I think that they should be doing more to ensure a more sustainable business model long-term. Some thoughts below:
First, what do you think about Chipotle owning and operating its own sustainable farms? This way they can learn and develop sustainable farming techniques for their key inputs which they can then share with their farmers. As long as their farmers have exclusive contracts to supply to only Chipotle, this would give them a significant competitive advantage.
Second, do you think Chipotle should start diversifying its menu more? Part of the appeal of Chipotle has been their limited menu which makes the ordering process easy and quick. However, that means they are highly dependent on just a few key ingredients. When they remove something from their menu (or keep it on their menu and absorb the pricing hit), they pay a substantial cost. If Chipotle were to make more offerings available on their menu, this could potentially help them deal with pricing shocks in the near and mid-term.
Lastly, I’m curious how much Chipotle is investing in developing “alternatives” to traditional proteins like chicken, beef, etc. They recently introduced their “sofritas” offering which is shredded tofu but tastes and feels like meat. Should Chipotle continue to develop these types of offerings? I imagine this would help them move away from being dependent on just the traditional ingredients most of their competitors are highly exposed to (thus creating an “edge” if prices continue to rise).
Very interesting post, Divyang. As an avid skier and tennis player myself, I was able to really relate to the effects on climate change on sports.
As a child, I would play tennis outside a few times each week. This is because like most children, I couldn’t afford to regularly play in expensive indoor courts which were air-conditioned. If temperatures continue to rise, it will be more and more difficult for children in more and more places to play outside for extended periods of time. Without children playing the sport, its hard to see the sport really growing / lasting. Therefore, I don’t know if investment in infrastructure solves the problem long-term. What are your thoughts?
Also, is it anyone’s responsibility in the industry to start educating tennis players on the effects of climate change? Creating awareness among passionate tennis players / fans would hopefully create “ambassadors” for helping combat climate change.
Great job on this post! As someone who used to ski almost every weekend from December through April (I used to live in Denver), this issue is very important to me.
First, I agree with you that ski resorts like Squaw Valley Alpine Meadows can combat the effects on climate change by developing their resorts into “four season” destinations. They have to look no further than Vail to see how effectively it can be done. A quick trip to the Summer section of their website (www.vail.com) shows how they have successfully moved into offering hiking and biking trails, gondola rides, zipline tours, and much more.
Second, do you think that Squaw Valley should be engaging in more artificial snow-making to help them deal with the lower levels of snow occurring each year? This is a technique many ski mountains are resorting to.
Third, what are you thoughts on Squaw Valley’s responsibility to help educate consumers on the effects of climate change on the mountain? While it isn’t a direct solution, I see it as an opportunity to potentially slow down the rate of climate change over time. The National Ski Areas Association estimates that almost 10 million people participate in on-slope activities every year in the US. If every ski resort started educating these consumers, there could be a widespread affect on awareness and hopefully reduction in activities which directly increase the rate of climate change.
Great post. While reading, a few additional things came to mind related to what Hershey might be able to do (see below). It would be great to hear your thoughts.
First, I am curious if Hershey is purchasing futures contracts for cocoa beans, allowing them to purchase these beans at a fixed price at a later point in time? While this doesn’t help them directly reduce climate change, it will help temporarily mitigate the problem for the next 10-20 years. This article will help explain how it works: http://www.investopedia.com/university/commodities/commodities1.asp.
Second, should Hershey start diversifying its operations into different types of confectionery so it is not so dependent on chocolate? Given the long-term trends on cocoa production described in your post, it probably makes sense for them to invest heavily in R&D now to develop new types of product offerings.
Lastly, what do you think about Hershey starting to buy and operate its own production farms? While this won’t solve the entire problem long-term, it will allow them to withstand some of the near to mid-term pricing shocks when demand in the market is considerably higher than supply.