Regarding the discussion that has been generated by your first question, about whether Americans would be better off with more manufacturing jobs in the US or by facing lower cost cars, I firmly believe that protectionism is not the correct approach to decide.
If we analyze this problem from a macroeconomic perspective, we would realize that the potential jobs to be created in the US markets would be non-sustainable in the long term, due to the absence of a competitive advantage relative to other countries. Sooner or later, foreign manufacturers with such competitive advantages will be able to drive costs lower and market a better product inside the US. The long-term consequences of this process will lead to either having better but more expensive (due to high tariffs) non-US cars leading the US market or closing the US car market for foreign manufacturers, leaving Americans consumers worse off. I think that eventually, same jobs will be reallocated to a different industry, where them can really add value.
Great article Caue, I think it is a very refreshing way to analyze international trade. It was really interesting to learn how technology advancements have the ability to tackle some of the protectionism regulations off.
I agree with you on the benefits of 3D printing in terms lowering the barriers for free-flowing labor and product designs. However, I firmly believe this kind of developments could have two major consequences:
i. On the one hand, this “post-modern” international trade would certainly be addressed by governments more sooner than later. I expect to see new regulations from those more protectionist administrations you mention, trying to catch up to these practices and building walls to hinder such transactions.
ii. On the other hand, these same technological improvements could become a threat for GE itself. If we consider the future massification of 3D printing, and the proliferation of experts and/or standardized models worldwide, GE could loose its competitive advantage to customers acquiring this technology.
Ceena, it is very interesting to see how Coca-Cola is trying to leverage its power and leadership position in order to involve the whole supply chain (upwards and downwards) in their sustainability efforts. In fact, I am glad to realize how a company is taking responsibility for its impact in a more holistic way, which is the same thing I recommend in my analysis about sustainability at Vina Concha y Toro. While I think Figure 1 basically summarizes the broader picture of the carbonated beverage industry –both up and downstream–, I believe this analysis is not throughfully considering Coca Cola’s own impact on climate change and sustainability, since there is no mention to water and energy consumption nor to waste management or other negative externalities. The former should be a major concern since as of 2016 1.96 liters of water were needed to manufacture 1 liter of product. (http://www.coca-colacompany.com/stories/setting-a-new-goal-for-water-efficiency).
Totally agree with your analysis Maria. In my opinion, Syngenta, as a leader in the agro-chemical business, should commit to become a global leader in sustainability, too. Considering its declared mission (“feed the world in a sustainable way”), makes me think that sustainability should be one of the core activities at Syngenta. Nevertheless, half of the The Good Growth Plan 2020 Commitments focus more on people rather than on environment care and sustainability. While I understand that labor safety and fair work conditions are critical aspects of the agricultural and chemical developing businesses, I miss more initiatives related to the climate change impact of the industry, like decreasing emissions across the supply chain, for instance.
Regarding the operational sustainability initiatives, it does not make any sense to pretend to be committed without tracking the results and measuring the impact periodically. That is a serious fault to me, because it not only takes away the program’s credibility but also encourage the whole industry to not really care about addressing the real problems on sustainability.
Daniel, I am impressed by potential implications that digitalization could have on the cruise industry, you did a really good job on assessing them on a broadly way. I totally agree on the examples you mention, such as inventory savings on F&B unit by better forecasting customers demands and DTC sales by using the owned app to bypass travel agencies. However, it is important to mention that, in the latter case, cutting the middlemen implies that RC would have to take the responsibility to fulfill some travel agent’s functions in order to satisfy its customers (i.e. the possibility to book both flights and cruises jointly).
Moreover, I think that digitalization and Big Data could help Royal Caribbean to further become a more cost efficient player by, for instance, better forecast weather patterns so that they could plan their routes in a more efficient manner. I believe such tech improvements already serve to save a lot of fuel at maritime shipping industry.
Really interesting article Cenk. This “Speedfactory” will certainly help Adidas to better serve the increasingly changing customer demands in a more quickly way, creating a differentiating competitive advantage in this age of fast fashion. On the other hand, I agree that it could build a cost advantage in terms of labor and handling lower inventories. Your concerns on the internal impact and the potential consequences at the customer level make a lot of sense, too.
Nevertheless, I wonder to know if this capital-intensive model would be profitably scalable. Considering that Adidas’ intention is to develop several Speedfactories in local markets, I am skeptical about the real savings this project could deliver to Adidas as a whole company (transportation costs and labor are typically much lower than this kind of technology).
My other concern is how Adidas will maximize the connectivity between these automated factories and the customers’ demand. While e commerce is a well developed distribution channel in the US, I am not so comfortable with this model to attend lower develop economies, such as Latin America and SE Asia, where internet and electronic payment methods have little penetration. Likewise, how Adidas will manage this issue with current distributors and retailers in a market where product trial and touch and feel is so important?