Great article, and one that is very near and dear to my Chipotle-loving heart! As several people have pointed out above, it is tough to balance sustainability with diversification. I think in the food industry especially, sustainability takes a back seat to health and safety. The reputational damage that Chipotle suffered after the outbreak of E. Coli was massive and their primary goal is to prevent another incident like that from happening, regardless of if they compromise on their sustainability promises. I think the company will have to invest significantly in their supply chain if they wish to achieve both goals simultaneously and, as Nico pointed out above, a 1% increase in costs may not just cut it.
Excellent article Kamau, and very well written! I really like your recommendation around investing in manufacturing technology to lower Target’s overall cost of production. I think this is the only real solution in the long run and one that Amazon has demonstrated really works. For example, Amazon significantly expanded its army of robots in 2016 and now has 45,000 robots across 20 fulfillment centers (http://www.businessinsider.com/amazons-robot-army-has-grown-by-50-2017-1). While initiatives like these are usually capex intensive upfront, they give significant competitive advantage to companies like Amazon by reducing large operating costs such as labor. Target similarly needs to start investing in the future now to ensure that it remains competitive.
A very interesting piece! I largely agree with the sentiments of the other commenters that, while its not in Samsung’s financial interests to open up a factory in the Unites States, it is something they must do to gain favorability with the US government and put pressure on local US players such as Whirlpool. I wonder, however, if instead of opening a plant in South Carolina, Samsung could have opened one in Mexico instead (similar to what competitors such as Whirlpool have done). Labor costs are significantly lower South of the border and trade agreements are still favorable (at least until NAFTA is negotiated), resulting in much more favorable financial prospects for Samsung.
Very interesting article Mark, especially in light of the Beer Game exercise we did a few weeks ago. It seems that Nintendo is suffering from both the issues that we encountered in that game – lack of POS visibility and large lead times. I agree with you that predictive analytics will be able to solve many of the problems it is facing. Machine learning is already being used by companies to help forecast demand (https://blog.toolsgroup.com/en/five-ways-machine-learning-can-improve-demand-forecasting) and Nintendo will certainly benefit from adopting it into its own forecasting techniques.
Thanks for a very interesting article Michelle! It was especially enlightening to learn that Mars is actually facing threats of decreased labor supply given that the unemployment rate in many Sub-Saharan countries, including Ghana and Cote d’Ivoire, is so high. I applaud the companies efforts to expand the workforce by empowering more women. It seems that opportunity cost is a big reason as to why laborers have tended to move out of rural areas and into the cities (which on average pay higher and provide a better quality of life), so do you think that Mars can capture and retain even more of the workforce if they just increase their wages?
Great article Shosha! It is fascinating to learn about the disruptions in the financial services space since so many are reliant upon this industry. I do question, however, Pepper’s ability to attract customers who may be wary about the security, trust, and customer service aspects of a completely online bank. Call me old-fashioned, but I for one would be hesitant in trusting a bank that I can’t visit (whenever I have any issues in my account I just walk to my nearest branch), especially one that doesn’t even have a banking license! I guess that Bank Leumi’s backing certainly helps, but I envision a large marketing campaign would be required to achieve the sort of customer usage that would make Pepper a profitable investment for the bank.