Thank you for sharing! This topic is very relevant. I believe Nike’s initiatives to hire a lobbyist firm and to move its production facilities location make sense, however I was somewhat confused and concerned if Nike has a clear strategy for value proposition to customers or if it is just reacting to the current isolationism risks. The company talks about using trade agreements to improve its global supply chain and decrease prices, but at the same time it says that bringing the manufacturing closer to the end consumer is important to decrease time-to-market and be able to respond faster to consumer demands. I see these actions as two different value propositions: the former is more aligned with products whose demand is easier to predict (high sellers and / or standardized products) while the latter is more aligned with more fashion and customized products. Therefore, first, I believe Nike should have a clear view on what the company wants to focus on and treat each problem in a specific way. I believe Nike has enough scale and a brand strong enough to play in the two segments, however, it’s important to define which SKUs are more aligned with one strategy or the other and split the production accordingly.
Regarding the TPP specifically, I believe that leveraging consumers to put pressure on governments is a good strategy. However, Nike won’t be able to do it by itself. So, I would recommend Nike to contact other companies operating in other sectors that would benefit from the agreement and appeal to the consumer together. The lobbyist firm could actually help getting alignment among all these firms and could also advise on how to best leverage the population support.
Thank you so much for sharing, Kimia! This is certainly a relevant issue that I had never thought about before. As some of the people said above, I believe that Cirque du Soleil should certainly invest in both solutions as I see them as complementary. Cirque du Soleil brand reputation and point of differentiation come mostly from the skill of its artists. Therefore, I would be concerned on the economic sustainability of the company if it started focusing on other – usually more easily replicable – types of entertainment.
I agree with Gabrielle’s proposal of investing in supply and see it as crucial. However, I believe it is more a strategic initiative to decrease the company’s exposure to similar issues in the long-term than a way to solve the current challenges. First, it would take years to train amateurs to the skill level required by Cirque du Soleil. Second, it would only work if there were enough potential artists within the main markets, which is not necessarily true and may imply extra time to incentivize local population to consider this career. Finally, unless the company is able to increase the number of performances, this would certainly impact Cirque’s du Soleil costs due to a decrease in artists’ utilization.
Thank you for sharing! This is a very relevant and common problem for several companies. Supply chain digitalization is a great solution for Sephora and all the initiatives make sense, however, playing the “Devil’s advocate” role, I would ask if instead of simply trying to become more digitized to supply so many SKUs, Sephora should not try to rationalize its portfolio and decrease the inventory management complexity. I believe there is an optimal number of SKUs for which a company increases its sales by having a wide supply of options. However, Sephora may have reached the point in which a SKU sales is cannibalizing others’. Additionally, Sephora could consider having a smaller subset of SKUs at the stores and install in-store digital platforms so customers could buy any product and receive it at home. This would educate customers to use the e-commerce channel more often, and would decrease complexity by keeping most of the SKUs at the distribution centers.
Regarding the question, I don’t believe that this is an issue. Not all jobs would be eliminated. There would only be a shift in the kind of skills required to the employees. Additionally, although it may seem harsh and the company may face some resistance from the local government and population, ultimately this would benefit the overall society. Since this would make the company more efficient, it would imply in higher profits and / or more accessible products to the end consumer, which would probably help Sephora to grow, probably leading to the generation of more jobs.
Thank you for sharing! This topic is extremely relevant across several sectors. In order to compete in the fast fashion segment, supply chain digitalization is key. UNIQLO’s value chain can be divided in three main blocks: design, manufacturing, and distribution. I believe the company is working on relevant initiatives in the first and the third elements. However, I am interested in what are the company’s plans to improve the second stage. Based on what other companies are doing, I would expect UNIQLO to heavily invest in automation of its production facilities and reinforcing the relationship with its suppliers to decrease lead times for raw material.
Regarding the question, I believe UNIQLO can certainly compete against Zara and H&M, however, in this sector, the main competitive advantage is having the shortest time to market as possible. Shipping production from Asia to around the world has a significant impact on the “design to shelf” throughput time. Therefore, I would recommend UNIQLO to evaluate the feasibility of replicating the “Asian supply and manufacturing infrastructure1” in other countries, especially in the US.
Thank you for sharing! The topic is extremely relevant! Nestle will certainly have challenges ahead. Regarding your question, I believe it is the governments’ responsibility to charge for profit organization. Ultimately, companies should be pay a fee equivalent to the costs the government will incur to treat the same amount of water the companies are extracting. Given that, I would expect prices of water bottles to rise in the US, leading to decrease in demand. In order to revert this trend, I would recommend Nestle to invest in innovation (e.g. different flavors, “functional waters”, etc) aiming at improving the product’s value proposition.
Building on the essay, as Nestle, I wouldn’t be only worried on the water supply perspective. It’s also important to highlight that water bottles have also significant implications in the consumption of plastic and in the CO2 emitted transportation, which is mostly done by trucks. These components will also imply in increasing costs. The main solution in this case is to invest in R&D to try to decrease the amount of plastic per bottle to the extent possible or to try to develop a biodegradable substitute.
Thank you for sharing! This topic is really interesting! LATAM certainly took many initiatives to reduce CO2 emissions, however I am quite skeptical that the company would have heavily invested in it if it didn’t imply in cost reductions. It’s important to bear in mind the challenging context of the airline industry in Latin America. There is not enough demand for differentiation in value proposition among airlines, i.e. there is no clear premium vs low-cost segment. Therefore, all airlines are competing mostly in tickets prices, which has a significant impact in profit margins.
Given this context, I would recommend LATAM to keep aligning the reduction in CO2 emission with the decrease in fuel costs. One interesting initiative adopted by its main competitor in Brazil (GOL) was to align the cabin crew compensation with fuel savings (http://www.valor.com.br/empresas/3087398/gol-dara-bonus-tripulantes-que-ajudarem-economizar-combustivel). Pilots can optimize fuel consumption by controlling the aircraft’s speed and optimizing the flight routes to the extent possible. Additionally, LATAM should certainly consider using biofuels. The Brazilian government is incentivizing the production of biodiesel. Due to tax benefits, soy companies such as Bunge, Cargill and Dreyfus are investing in the market, significantly decreasing price (http://www.valor.com.br/empresas/3788396/receita-regulamenta-incentivos-fiscais-ao-setor-de-biodiesel).