Thanks for sharing this Ferg. I could definitely relate to this post as I remember going to Blockbuster every week with my family as well. I think the Blockbuster case is the ultimate example of being too slow to adapt to changes in technology. What I remember most from their slow destruction was the fact that they had an opportunity to adjust to the changes in media consumption but were still too hesitant to abandon their traditional operating model. On the other hand, I see Netflix as the prime example of successful evolution with their decision to shift from DVD’s by mail to streaming video on-demand. I think that their initiative to develop their own content is extremely important to sustaining their competitive positioning in the marketplace, but I worry that their ultimate success may depend on their ability to continue to make hit series such as House of Cards and Orange is the New Black. Nevertheless, I will be very interested to see how their business strategy continues to adapt with changes in technology.
Thanks for sharing this Spencer. Having worked in the consumer products and retail space the past five years, I have spent a lot of time studying various e-commerce-native platforms who have migrated to adding brick-and-mortar stores or showrooms to their distribution strategy (e.g. Bonobos, Warby Parker, etc.). Therefore, I was especially not surprised to hear Amazon doing the same. Although traditional brick-and-mortar bookstores like Borders and Barnes and Noble have been devastated by the digital revolution, I believe that there will always be a place for bookstores on a smaller scale. I think it will be key for Amazon to leverage these stores to engage consumers across all of its distribution platforms.
Thanks for sharing George. This is a very interesting post. I was actually surprised to read that Fuelband had been discontinued. I remember when Nike and Apple first partnered to launch the Nike+ platform. I thought this partnership was going to be extremely successful given the growth in popularity of the iPhone at the time as well as all of the social initiatives to increase physical activity. Although I never owned a Fuelband myself, I believe that the Nike+ platform failed due to an inability to leverage network externalities. I think that the ease and access of use provided by other competitive wearables like Fitbit led to the platform’s ultimate demise despite the brand strength and functionality of the Nike / Apple combination.
Very thorough post ARS. I have spent the last five years working in the consumer products and retail industry, but I had no idea that Macys.com launched so long ago. As is the case for all brick-and-mortar retailers in my opinion, e-commerce will have to become a greater focus for the distribution strategy at Macy’s going forward to ensure its on-going success. Although I recognize the ability for improved profitability from e-commerce channels, I am concerned that their continued profitability gains will be somewhat constrained since the business is primarily selling third-party brands and not receiving the benefit of circumventing a wholesaler mark-up. Additionally, I think profit margins will be challenged as Macy’s will have to improve shipping speeds and product availability in order to compete with other online retailers such as Amazon.
Very interesting post ATN. Despite using AirBnb myself just this past week to book a house for a bachelor party, I was completely unaware of the three new initiatives that the company was launching. While I find these new initiatives to be interesting, I worry that the company is starting to move too far away from its core value proposition. It feels like these new initiatives are pushing the company towards traditional social activities that could be accessed through a local travel agency. Therefore, I struggle to see if these new products really expand AirBnb’s competitive advantage. Instead of focusing on new products, I think AirBnb should continue to improve its core product offering while improving on-going key issues such as customer discrimination.
Very interesting post MM. Although I often first think of plant-based commodities when I think about industries most impacted by climate change, I have never really thought of tomatoes as being a plant that is also severely impacted by the changes in temperature. I thought it was really fascinating to read about how Heinz has focused on engineering hybrid tomato seeds in order to address this issue. I am also really blown away by the 51% solid waste reduction at Heinz to the point that it makes me wonder how in the world they were generating that much more solid waste beforehand! As you pointed out, however, I am also really concerned with how the cost-cutting emphasis of Kraft Heinz owner 3G Capital will impact their opportunity to continue implementing new sustainability trends. Given their track record with Burger King and indirectly with A-B InBev, I really struggle to believe that they will be willing to implement additional sustainability efforts at the combined entity if it does not align with their cost-cutting strategy — regardless of its impact to the greater good of society.
Very insightful post KQ! As a daily coffee-addict and Starbucks Gold Card holder myself, I found it very interesting to hear how Starbucks is addressing the growing delta between consumption and production of coffee globally. When I think of business models most imminently impacted by climate change, coffee producers and retailers are some of the first businesses to come to mind. I think Starbucks is absolutely taking the right approach by getting ahead of the trend and buying up additional land for production. To this point, I would disagree with you that Starbucks does not have the capital or time to take advantage of these opportunities. If I was Starbucks’ CEO, this would be my top strategy as the supply of coffee is core to the long-term success of this business regardless of the upfront capital expense. With the Joh. A. Benckiser group rapidly consolidating the coffee retail market, I believe their is an impending “arms race” to control the coffee industry, which will be dictated by who has secured a viable long-term supply in the face of the changing global climate.
I am very impressed by Levi’s two-pronged approach to reducing water consumption by targeting their own practices as well as their consumers’ behavior. I feel that most companies put in a lot of effort and resources to improve the sustainability of their own business practices, but often place little emphasis on what happens once their product or service has been passed on to the next party. In general, I would not have really thought of the garment industry as being a big culprit in global water consumption (1% of overall consumption!), so I think it is powerful that Levi’s is taking a stand to lead change in this industry. That being said, I am admittedly a bit skeptical that Levi’s is truly holding up their end of the deal based on the point that they have only implemented this initiative in one of their manufacturing facilities. Similarly, part of me struggles with whether or not this is simply an initiative to cut their own production costs as opposed to truly advocating for more sustainable water consumption practices in the industry.
Very interesting post! Although almost everyone in the world is impacted by climate change in way or another, I find it fascinating to hear about how businesses who rely so heavily on natural resources for their core product offering — such as Nutella / Ferrero — are preparing (or not preparing) to address the impact on their business strategy. I found it very interesting in this case that Ferrero is being impacted by climate change on so many fronts as its supply chain sources its key ingredients from all over the globe. Due to this global impact, I think that Ferrero’s best option is to invest in supplying from a greater number of producers who are geographically diverse, regardless of the costs. Option 1 does not seem viable to me as I believe changing its product / ingredient mix poses a significant risk to its business model given the distinct taste profile that drives consumers passion for Nutella today. Likewise, I feel that option 2 sounds good on paper but does not actually solve its resource problem in the long-run. Nevertheless, it will be interesting to see how Ferrero addresses this problem going forward. Until then, pass the Nutella!