Jen Downing's Profile
Very interesting article, Kunal! I’m left wondering why the investment in better technology hasn’t already been made. Were the railroads already at maximum capacity with existing demand, in which case there was no incentive to increase demand through better customer service? Or were they already at full utilization, in which case there were no opportunities to optimize schedules to increase rail usage and train trips? It sounds like the answer is neither.
Timing aside, your analysis suggests the benefits of technology advances for Indian Railways are vast: route optimization, increased capacity, lower inventory costs, tracking services. I think the best way to roll out the changes would be for Railways to share some of the financial benefits (increased revenue, lower unit costs) with the external stakeholders you mention. For example, if Railway benefits from all customers booking online, it could offer an incentive to do so. For individual passengers, this could be a free concession. For business freight customers, it could be a freight discount. This kind of value sharing between players of a supply chain promotes cooperation among them and makes every player better off.
To answer the questions you’ve posed: HPQ may be better equipped to overcome the decreasing demand for printing by rethinking its position in the market from a customer-centric perspective, not a supply-chain perspective. And 3D printing is not the answer.
Currently, HPQ is taking a supply-chain centric approach to its sales decline – i.e., ‘How can we use the supply chain assets we have to continue to sell stuff when customers to are switching away from our product?’ The answer: make it easier to buy ink, and sell something customers are not switching away from.
The customer-centric approach would be to ask, ‘How can we continue to meet the needs of our existing customers, even if it means changing our supply chain?’ The answer would be to consider what is replacing printing and offer that – namely, document sharing and information storage. HPQ should consider undertaking an IBM-esque transition from goods to services if they want to survive in the long term – even if that means eliminating ink and 2D printer manufacturers and replacing it with software development.
3D printing is not the substitute for document sharing and information sharing, which means HPQ’s customers are not switching away from HPQ in favor of 3D printers. HPQ is not taking full advantage of its existing customer base by moving to the 3D market – it’s going to have to win on a new consumer battle ground.
Interesting summary of the issues surrounding the supply chain of Mexican beers sold in the U.S.! This is one of two ways to reverse the imbalance between the domestic portion of sales and the domestic portion of COGS that you lay out in your first paragraph. The second, after increasing COGS in the U.S., would be to increase sales in Mexico. Constellation would have to market to Mexican consumers, develop relationships with retailers and beef up distribution networks. Growing sales in Mexico so as to reverse this imbalance completely is obviously unrealistic in the short-run, but the advantages of following that trend suggest we may be seeing shorter supply chains (in terms of number of borders crossed) and more local marketing for products whose nationality is part of their image.
To answer your question about how proactive companies should be in anticipating changing trade conditions, I think we’d agree that lower-risk and more rewarding measures should be taken soon if not already. Growing local markets is one such measure: it mitigates the risk of tariffs (assuming C.B. internalizes the cost in the short run) while expanding sales into new markets (assuming the market is sufficiently large, growing, and C.B. can win share).
Whether Nike can – or should – influence other industry players to take similar actions to reduce greenhouse gas emissions, water usage, and waste creation is an interesting question. I tend to agree with DPI that the mechanism through which Nike will influence other companies is by training/teaching its customers. In which case, the question could really be phrased as how public vs. discrete Nike should be about its sustainability efforts and how will customers receive this.
I think Nike is in unique position thanks to brand strength; for millions of customers, Nike represents superior athletic apparel technology as endorsed by the world’s best athletes. Producing its items sustainably is a way for Nike to prove (the way that only Nike could) to mass-market shoppers that you don’t have to compromise on performance and durability to make a more environmentally-friendly product. Nike was smart to pair sustainability achievements with a material innovation, FlyLeather. This has positive effects on shopper behavior beyond athletic gear – these shoppers will hold “green” products in higher esteem relative to their conventional alternatives. It starts to bridge the gap between performance-seekers and sustainability-seekers; they no longer believe there is necessarily a trade-off, and can “vote” with their dollars for brands that offer both.
As a skier, I’m at first saddened by these projections of reduced snow and shortened ski seasons. Then as a business school student, I’m curious about Vail resort’s investment strategy with respect to their expanding holdings of ski resorts. Taking a cynical perspective, I see Vail capitalizing on an opportunity to consolidate ownership of ski resorts and water resources to gain control of the market as it shrinks, thereby increasing its control of supply. I wouldn’t be surprised to see ski prices (season passes, lift tickets, ancillary goods and services) rising at an accelerating rate going forward.
As you mention, Jenny, and as Andrew references as well, there are many ways ski resorts impact the environment such as deforestation when opening new ski trails, disrupting animals with loud snow guns, trash accumulation, energy usage. Vail resorts is acknowledged for their commitment to reducing these effects. When it comes to water usage, however, they seem to be part of the problem rather than the solution. Articles I’ve read in the Denver Post and in Powder Magazine that praise Vail’s climate change reduction strategy omit the water usage issue.
Brooke mentioned she’s happy to hear that 80% of the water used in artificial snow making is returned to the environment, but I’m shocked – where does the other 20% of the water go? Does this mean there is 20% less water (per cycle) in the natural environment for natural snow formation? With the incredible volume of water used per minute, it seems like the water resources could be at risk of depletion – a problem that is not solved by emission neutrality, which Vail is working towards.
If the water usage rates of artificial snow-making are indeed a threat to the local ecosystem, Vail is exacerbating the problem of a reduction in natural snow and accelerating the decline of natural skiing. The biggest losers in this equation (besides wildlife) are the back country skiers that rely on natural snow. But Vail doesn’t care about these skiers – they don’t buy lift tickets.