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Daniel Silva
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Great article, hitting on the crux of the matter in my view: how to ensure that TfL buses are not left with the most unprofitable routes, making it even more expensive to the tax payer? Even though I am a leaning libertarian, I would support a more stringent approach in this situation; granting TfL monopoly is the only way to ensure the broader society can access affordable public transportation without requiring outrageous subsidies from the tax payers. Hence, I would advocate for TfL to purchase CityMapper services, and use machine learning to optimize its routes, providing a much better service to its customers.
While I appreciate how Chanel could expand their use of additive manufacturing (AM) to other beauty segments, I would caution that such move might not make economic sense. According to the article “The Limits of 3D Manufacturing” by Matthias Holweg published on the Harvard Business Review, “3D printing simply works best in areas where customization is key… However, we also know that 99% of all manufactured parts are standard and do not require customization. In these cases, 3D printing has to compete with scale-driven manufacturing processes and rather efficient logistics operations.” Therefore, I think Chanel should use more AM in highly customizable and expensive products, while refraining from using 3D printing for standard parts.
I find the opportunities of additive manufacturing (AM) fascinating, and am enthused by how Under Armour and Adidas are rushing to develop mass market products with AM. However, I question what is the source of value creation for those sports companies; should UA focus on identifying and endorsing promising athletes or deep-dive into how technology (e.g., AM) can deliver better products? From Nike’s case, we have seen that foresight in athlete endorsement can dramatically shape the company outlook and its competitive landscape (e.g., endorsing the Brazil team in 1994, and developing the Air Jordan).
I think that in the short and medium terms, Tesla’s Open Innovation Policy makes sense for three reasons. First, Tesla needs electric cars to become a much higher percentage of total cars sold if it is to fulfill its mission and vision; a feat it will not be able to achieve by itself in the near future. Second, there are a lot of synergies for other Tesla assets in case more electric cars are sold; e.g., by selling battery packs to other players, it can gain the necessary scale to produce Tesla cars more efficiently. Third, Tesla gained substantial good PR exposure due to its Open Innovation Policy.
Thanks for sharing, this was a very interesting read.
Regarding the changes made to the open innovation platform in the past years, the removal of the community aspect gives me pause. First, the removal reduces customers’ incentives to share ideas as there is no social validation for their suggestions. Second, Starbucks now has to incur the cost of going through tens of thousands ideas to determine which ones should be implemented; whereas before it could rely on customers to vote for free.
Also, answering your question about international markets, I do not believe franchising is the issue in adapting products for local needs/preferences. I believe that Starbucks is in fact not interested in fully adapting to local needs in order to maintain a global consistent experience in what they do best; Starbucks would not be able to compete with the best local shops in their court, e.g., Karak in Middle East, or specialty teas in China.