This article describes the challenges that the wine industry faces very well. What I found most interesting in this article is that E&J Gallo is addressing the problem of climate change by strategically locating its vineyards in locations where the climate is more favorable and diversifying its vineyard locations at the same time.
Moving grow locations is something I would have thought to be very challenging in the wine industry, since much of the value of wines is derived from the location where they are grown. In other words, appellation in wines can make a substantial difference in the price a winemaker can charge. This may be due to the quality of wines that E&J Gallo primarily produces, but I would suspect that this solution may not be an option for many other winemakers, which is why I think it’s more important for companies like E&J Gallo to invest in R&D to find other solutions to fight climate change (like some of the climate-controlled environments or grape-type solutions you mention). Although, for E&J Gallo, having the ability to grow their wines in various locations does yield additional flexibility in its bottling and distribution supply chain, which may be more beneficial to its business model than the R&D benefits discussed above.
Justin, great article and a topic that needs to be on everyone’s radar. Water is a resource that I think many (people and companies alike) take for granted and that companies need to use efficiently, as it’s a raw material that affects every single human being. It is great to see companies like Coca Cola being “stewards” of resources like water and striving to not have a negative impact on its availability.
As you mention, it is critical for companies to invest in research in order to make their use of water more efficient and, to the question you pose of how efficient water utilization will be considered against profitability, I think more companies will increasingly become willing to give up profit as water scarcity becomes more apparent to the general public. At Coke specifically, the company should continue to invest in research that can reduce the amount of water used in their product formulations and production processes, as that has both the potential to reduce production costs (as water resources become more expensive) and decrease its water footprint. Additionally, from a marketing perspective, Coke can create a lot of value with consumers by leading the effort to being a more “water-use friendly” company.
This is a very relevant article today and as LP mentions, this is an issue we will see much more of in the future. I agree with Eddie above, I do not think that Toyota should make any major manufacturing moves just yet.
As typically occurs in politics, what is said and what actually transpires are often two very different things. Since Toyota is such a big international corporation, I think it has a lot of bargaining power with the United States based on both its operations and sales in the country. As you mention, lobbying in Washington to achieve the most favorable trade terms is always necessary, but Toyota threatening to move operations away from the United States (a move that goes against some of President Trump’s strongest initiatives) alone would cause a major reaction and have devastating implications for the Midwestern communities where most of Toyota’s manufacturing operations are located and which strongly support President Trump (https://www.toyota.com/usa/operations/map.html#!/Operations-By-State). While some of President Trump’s trade ideas would certainly impact Toyota, it is still to be seen whether his ideas can actually come to fruition, so major changes by Toyota would be unnecessary at this point.
But while Toyota does have this large bargaining power, in an international community that is becoming more isolationist in general, it would still be beneficial for Toyota to continue to look for ways to make production more efficient and improve its technology in order to hedge against unforeseen costs resulting from restrictive trade measures such as those President Trump is proposing.
As EN mentions above, Brexit creates an unprecedented situation and it will be interesting to see how companies like Diageo will react (nice article!). I think Diageo needs to be proactive on this front and ensure that it negotiates favorable trade agreements so that it can cross borders as quickly and easily as possible.
As others mention above, moving operations to accommodate trade barriers would be extremely costly for Diageo and doing so would also disrupt their supply chain in other parts of the world. Similarly, as with other spirits (bourbon, tequila) and wines (Bordeaux, Napa Valley) that can only be produced in certain parts of the world, companies like Diageo will be forced to work in certain locations if they want to distribute those products, so working with the local governments and regulatory bodies is a must. A possible solution that Diageo should consider beyond working with local governments is to structure their supply chain in a way that increases the size of shipments and thus decreases the quantity of border crossings. This of course also implies more efficient operations that yield higher production so larger shipments can be achieved, as well as a shipping network that can accommodate these larger shipments.
Interesting article! While I think Nordstrom is smart to look for ways to get their products to the consumer quicker, I would be hesitant to quickly embrace platforms like Uber, as they create various risks for the Nordstrom supply chain.
One of the biggest concerns I would have using Uber is the amount of control over the customer experience I give up. Being a high-end retailer that prides itself on great customer service, Nordstrom would have to rely on drivers who they have not trained and vetted and who will likely be interacting directly with their consumers (essentially becoming representatives of the brand). Similarly, as some of the other comments have alluded to, Nordstrom will have to work with Uber to create an incentive structure for the drivers that ensures Nordstrom will always have a supply of drivers that can be used for same day deliveries. Lastly, while the ride-sharing industry continues to face its various challenges as it continues to grow (especially legal/regulatory related), Nordstrom could find themselves in a situation where they can no longer rely on Uber to deliver their products, causing Nordstrom to have to switch to a high-cost alternative to continue the same-day delivery service (as we learned in our marketing class, it can be very challenging taking something away from a consumer that they have come to expect).
Overall, quicker delivery alternatives for Nordstrom are a great way for it to continue to enhance its customer promise and ride-sharing platforms may be a vehicle to do that, but I think there is still a lot of uncertainty on how services like Uber can be translated to commercial uses.
Interesting article Anusha! I think this is a very interesting problem for UPS as it puts its physical network and logistical power to the test against the advanced technology that firms like Amazon and Uber can leverage in delivering products to consumers.
When it comes to autonomous trucks, I think it will be very challenging for UPS to utilize this technology as it will require heavy investment into this new technology as well as into its existing facilities (to accommodate an entirely new kind of vehicle). Furthermore, as SRS513 mentions above, I think there will only be select parts of the supply chain where UPS could incorporate this technology, so it would be interesting if UPS could incorporate autonomous trucks into just the long-haul portions of the supply chain and keep their current trucks as the actual delivery vehicles. Also, I wonder how necessary it is for UPS to compete with Amazon/Uber on this front versus focusing on its more direct competitors. While Amazon is currently a huge UPS customer and I think UPS should stay ahead of the technological curve, I worry that focusing too much on autonomous technology might distract UPS from its core competencies and direct competitors. I guess time will tell!