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On November 19, 2016, elizmblake commented on Ralph Lauren Corporation– digitization in the luxury retail business :

Rohit – I really enjoyed your post on the digitization of the retail experience. I am curious about the applications of this technology outside the luxury, or even the apparel, market—i.e., can this technology be used at other retailers, which drive sales through high volumes of low-price items? For example, my younger sister worked at our local Stop&Shop (grocery) chain when we were in high school. She told me the store had accepted product losses (i.e., theft) as a cost of doing business, because there was no real way for the store to prevent it in a cost-effective way (i.e., the store isn’t going to sue someone for stealing a carton of blueberries, and its return policies implicitly allow people to steal expensive items such as baby formula and “return” them for cash).

I wonder if stronger inventory management within these retailers, perhaps facilitated by the use of tracking technology within the store, would help prevent this type of theft, thereby providing another lever that the chains can use to increase margins. In that way, the tracking technology wouldn’t just enhance customization and increase sales, but also reduce the operating costs of each store and allow stores to reinvest in new endeavors.

On November 19, 2016, elizmblake commented on BMW – Drive now, analyze later? :

Josefin – Thank you for such an interesting post! I had no idea that BMW had entered the car-sharing business. As a millennial and recovering New Yorker who has never owned a car, I strongly believe that car-sharing (and the “sharing economy” more broadly) will be increasingly important over the coming decades. I think that offerings like this one are a great way for BMW to hedge against that industry shift and the potential reduction in demand for personal vehicles as millennials get older.

I’m reminded of the dynamic pricing case we had in Marketing on Thursday. One of the examples we discussed in class was car insurers’ use of tracking technology to evaluate customers’ driving abilities—and charge them accordingly. I wonder if there is an opportunity to apply that sort of technology in a car-sharing context: would BMW and American companies like Zipcar be able to identify good and bad drivers and allocate those customers a discount (or surcharge)? What would the customer and competitive response be to such an initiative?

Jon – Thank you for this fascinating post! I think this is a great example of “doing well by doing good;” i.e., building a business model that’s aligned with more a more efficient allocation of educational resources and ultimately, better outcomes for children.

I covered a software company at work which (while mostly health care related) had a large and growing higher educational arm. The business sold software tools to colleges and universities that track academic and behavioral factors (mostly related to grades and advisor visits, but potentially could also track things like library and gym visits) and use predictive analytics to identify “high risk” students (i.e., those in danger of failing or dropping out). The school can then intervene to help the student succeed—for example, with more high-touch advising or a course-of-study change—by allocating resources to that high-risk student that it can’t afford to give everyone. I always thought it was a really interesting model and a great thing for society—we forget this at Harvard, but across the country, only about 55% of college freshmen end up graduating within five years.

Roberto – I really enjoyed your post, and I think it was an interesting follow-up to the Barilla case we discussed in class. I’m curious about the competitive implications of tracking from a raw materials perspective – if consumers can track their food products from seed to plate, then presumably they will be more discerning customers and demand higher quality raw materials. It’s unlikely that Barilla’s smaller competitors all have exacting standards when sourcing their raw food inputs. I wonder if technology like this would give larger, better-capitalized players (like Barilla) a stronger competitive advantage, as customers shift away from smaller companies that either cannot or will not provide this level of disclosure.

Jessie – Thank you for this interesting post! As someone who attended a fairly traditional church growing up, I had no idea that religious organizations were embracing digital technology in the ways that you described.

I think this is a wonderful idea to employ technology to encourage donations, and for the church to track donations on a week-to-week basis. I wonder if there is a greater analytical opportunity here—do certain priests/pastors tend to generate stronger revenues? Is the 7:00 service more generous than the 9:00? I’d be curious to see what kind of behavioral changes would occur (from church leaders and congregants) when the leadership has stronger visibility into these data.

On November 4, 2016, elizmblake commented on Life Healthcare: Managing the cause and effect of climate change :

I am very interested in this discussion about not just the way health care impacts the environment, but on how the environment impacts health. Previously, my exposure to “the health effects of climate change” were primarily related to obvious issues like pollution, but I hadn’t thought about the dangers of heat exhaustion, infectious disease, and increased risk-taking behaviors, and the implication of these factors on the health of a population.

Ultimately, negative health outcomes carry a significant financial risk to health care payors, whether those payors are government-backed or commercial insurers. I will be curious to see whether greater disease surveillance and data capturing around the health implications of climate change will spur greater urgency from health care payors. Presumably, if the link is significant, insurance companies would see a greater urgency to promote sustainable practices as a means to reduce a long-term business risk (that is, reimbursing costly procedures for a sicker patient population).

I would hope that data sharing around this topic is a realistic goal in the future, because health care is an industry that touches most consumers, employers, and governments, and information linking climate change to health outcomes could be an important tool in engaging more individuals and organizations around sustainable practices. So, I’d like to pose a question to the class: what stands in the way of sharing this data between organizations and industries? And how can the health care industry help address those challenges?

As a fellow chocolate appreciator, I was fascinated by Kamoy’s post about the climactic threats to the chocolate industry. I am impressed with Mars’ efforts to increase farmer productivity by helping small-scale West African farmers improve farming practices and yield.

However, I’d like to pose a question to the class. Animal health (i.e., livestock production) is another category where small-scale producers are implementing new productivity measures to increase yields (particularly in emerging markets, where most livestock production still occurs on a relatively small scale). While these efforts are admirable from a food supply standpoint, they also involve certain health risks. In the case of livestock, the introduction of more “efficient” production practices involve keeping animals in closer quarters, increasing the risk of disease that will be later introduced into the food supply. Do you think that more “efficient” farming practices, when introduced to the food supply, come with eventual health risks? If so, how can industry work to mitigate those risks?

Finally, I am also curious about Mars’ diversification efforts. Clearly, the company is preparing for future natural resource constraints. However, has the overall business made an effort to reduce its exposure to cocoa altogether? Is it looking into sourcing substitute ingredients, or shifting its focus to alternative products altogether?

Sharif, thank you for your fascinating and thorough post on the divestment decisions faced by university endowments. I agree with your points that prominent universities such as Harvard enjoy a high degree of visibility, which implies an obligation to prioritize ethical decisions and set moral standards for managers of smaller portfolios. I acknowledge that there is a degree of hypocrisy involved when research institutions like Harvard, which are tasked with making a positive difference in the world, are financing operations that have negative long-term environmental implications.

However, I ultimately disagree with your conclusion that Harvard must divest, in keeping with its morals and reputation. Harvard University does not have an official mission statement, but the mission of Harvard College is “to educate the citizens and citizen-leaders for our society.” I believe that the success—and consequently the brand—of Harvard should depend on how well it achieves this educational goal.

You acknowledged in your write-up that Harvard Management Corporation faces a trade-off between optimal investment returns and the sustainability of its investments. That is, if Harvard divests its “unsustainable” assets, it will be implicitly accepting lower returns for the university’s endowment, ultimately impairing its ability to execute its mission “to educate citizens… for our society.” To use an extreme example, what if HMC’s decision to divest fossil fuels took scholarships away from underpriviledged high school students? Are you willing to deprive those students of an Ivy League education?

As an outside observer, I would be vastly more appalled if Harvard became a bastion for wealthy undergraduates, dropping support for less financially secure applicants, all in the name of a “negligible financial impact on the [unsustainable] companies.”

Finally, I think you may be underestimating the human resources required to completely eliminate unsustainable investments from HMC’s portfolio. I have a close friend who has worked in university endowments for many years, and he has been tasked with compiling a list of the universities’ “unsustainable” or “sensitive” investments across the entire portfolios. This work is very difficult! It comprises collecting data on several sub-portfolios held by hedge funds, mutual funds, private equity portfolios, etc., many of which may be unwilling or unable to share a high level of granularity. Adding a labor-intensive task to the investment process may further strain HMC’s investment team, exacerbating the potential for sub-optimal returns that limit the University’s ability to further its educational mission.

On November 4, 2016, elizmblake commented on Is Tyson Forcing Itself Into Sustainability? :

Eric, I really enjoyed your post on the environmental impact of meat consumption. From a personal standpoint, I believe that the amount of meat consumed (at least in the US) presents true “low-hanging fruit” from an environmental and health standpoint: transitioning more individuals toward a plant-based diet can present a “win-win” that both improves health outcomes, helps address climate change risk, and increases food access to underserved populations (by lowering resource consumption in the production of that food). For those interested in this topic, I would highly recommend the documentary, “Forks over Knives,” which explores the potential benefits of plant-based diets (and I believe it is on Netflix!).

However, I’d like to push back on your claim that consumers only care about “taste, price, and convenience.” There is a huge market for nutritious foods and health products, as indicated by the success of companies such as Equinox, Nike, Juice Press, Whole Foods, etc. I would argue that consumers do value health and nutrition—however, there is considerable confusion in the marketplace about which food products are the “healthiest.”

To this point, I think that one area of skepticism amongst health-conscious consumers does center on meat and animal-based products. Consumers, and more recently, regulatory agencies such as the FDA and the USDA, have expressed concern around animal health pharmaceuticals, antibiotics, and medicinal food additives that are potentially entering the food supply. In my view, one additional way that Tyson can mitigate its climate change exposure is by differentiating its meat products as “healthy and natural,” i.e., free of many of the pharmaceutical products that consumers fear have infiltrated the supply chain. Obviously, implementing such production processes for livestock animals would be very expensive—there is even a question on the MA ballot concerning this very issue next week!—but there may be positive trade-offs in the form of attracting more health-conscious consumers as sustainability issues come to the forefront long-term.

On November 4, 2016, elizmblake commented on Nike: A Poster Child for Climate Change? :

While discussing the Nike Football case in Marketing and later, while reading Lynn’s post, I have been impressed with Nike’s willingness to deemphasize a near-term competitive edge and financial gain in favor of long-term sustainability goals. Market share leaders—in any industry—are better-positioned to respond to environmental changes, as they tend to be more advanced technologically, better capitalized, and more diversified, reducing the risk associated with new sustainability projects.

As such, I believe leaders also have an obligation to prioritize sustainability and raise the bar for their competitors. Clearly, this is a philosophy with which Nike management agrees, and I respect their effort to expend time, financial, and human resources to explore sustainability options on behalf of the industry.

Lynn discussed at length Nike’s efforts to engage the consumer in a dialogue about sustainability—which, presumably, would implicitly or explicitly communicate to consumers that Nike products are becoming more “sustainable.” This is an important conversation, but I think an equally important one addresses the potential negative perceptions associated with sustainable products. If a consumer knows that a Nike product is sustainable, will s/he worry that it is lower quality? Overpriced? As consumers, I think that we tend to assume socially responsible products incur some cost to the company that is passed along to the end customer. I would be curious to explore how Nike thinks about that messaging trade-off when marketing these sustainable clothes.