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Very interesting and relevant post, Jon! We had an early education and day care business in our portfolio and we looked at some similar digital applications. To Javier’s point above, it seems like the trend is to move from providing regular updates to parents to offering camera surveillance. While I see many benefits to both approaches, I do think it is important to consider what are some of the considerations associated with these technology offerings.

One of my main concerns is distracting teachers and reducing the time they spent with children because of time-consuming updates to parents. While providing updates to parents can be important, ultimately what parents want to high-quality, attentive care to their children. So to avoid forcing teachers to spend a lot of time on providing these updates, a lot of daycare facilities now offer camera surveillance (if they can get a license for it), which I believe adds a lot of tension between parents and teachers. For instance, teachers constantly feel scrutinized and watched and often have to answer to numerous questions from parents who have observed them feed or handle their child a certain way, which leads to nitpicking and compromising trust between the two parties. Sometimes that can even lead to parents switching their child to a different childcare facility. Additionally, as mentioned above, there are a lot of privacy and legal concerns and it often ends up being more challenging for daycare centers with cameras to recruit teachers, because teachers don’t want to be exposed to “nitpicking”.

We ended up deciding not to implement cameras at the company we owned but it is certainly an interesting issue and it is definitely a growing trend in the industry. The question is – where is the limit and which applications add value to parents/teachers and which ones create unnecessary friction in the process?

Fascinating post, Anja! I was also not aware of this technology and similarly to the posts above I also wonder how financially feasible it is for a low-margin business to adopt this model.

I would think that large buffet style restaurant chains would have an operating model that could benefit from such a technology at a larger scale and absorb the costs. Did you by any chance come across any other use cases in the dining industry?

Additionally, I am curious whether this has been applied in any other industries where savings in inventory management costs could be quite significant. I came across an interesting article that discussed the use cases in the retail industry [1]:

– Continuous “live” store inventory reporting that enables retailers to get real-time detailed information on their stock through an on-going automatic scan system in warehouses and stores (versus doing a manual check by an employee)

– Simultaneous “one shot” scanning of goods at the cash which makes it possible to scan everything in a consumer’s grocery cart at once, while still in the cart (eliminates need to remove items for check-out)

It looks like these applications are in pilot stage yet and other uses that have been suggested include loading airport bags or identifying counterfeit drugs in the pharmaceutical industry. What do you think about these applications and did you come across any others?

[1] http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02320.html

Brandon – this is a very interesting post and a fascinating topic!

I know you are an avid gamer and I wanted to share with you an additional example of a different kind of game that I played a lot growing up that has also been disrupted by technology – LEGO.

LEGO nearly went bankrupt in 2004 and underwent a significant restructuring before it divested a couple of its unprofitable divisions and focused on converting its core LEGO constructor games in a digital format.

LEGO used its core design capabilities in physical games and used a digital platform to “hand over” the design of its games to its fans, which led to the creation of new digital games, such as LEGO Digital Designer. [1] Building off of the success of this first digital game, LEGO then expanded into movies, other video games, and LEGO Mindstorms.

It would be interesting to see whether Magic will be able to capitalize on its strengths (immersive experience, technical complexity, etc.) and be able to innovate and expand into VR and other verticals, similarly to LEGO.

[1] Bruce Weinelt et al. (2016). Digital Transformation of Industries: Digital Enterprise. World Economic Forum. http://reports.weforum.org/digital-transformation-of-industries/wp-content/blogs.dir/94/mp/files/pages/files/digital-enterprise-narrative-final-january-2016.pdf. Accessed November 2016.

Great post! Domino’s has a fascinating story and I also wrote about their transition in my post.

One suggestion that I had for them going forward that seemed to resonate with many people who commented on our posts was offering healthier options in an attempt to capture the growing millennial customer base. Traditionally, QSRs have limited their product assortment so they can minimize preparation time and shorten the delivery cycle but as you pointed out in your post, orders placed online, were on average, larger than orders received over the phone, which is driven by the convenience of digital ordering but also by the increased variety and higher quality of the product offering. So my question is – if Domino’s continues to innovate its menu and increase the assortment of healthier options to drive larger online orders, would that lead to pressure on delivery time, customer dissatisfaction and churn over time? And how can Domino’s balance changing its menu while maintaining speed of service and low labor costs?

Great post and a very interesting perspective, Elise. We looked at a lot of examples in class of companies that are changing their business models entirely to stay competitive in a digital world and many of the posts for this assignment also focus on internal business or operational initiatives but vertical integration is certainly an important strategy that many companies pursue to respond to the rapid technological changes.

The impact of digital innovation and IoT has pushed large incumbents, such as AT&T, to entirely re-think their business strategy and has led to major consolidation in the telecom space. Furthermore, the price that AT&T is paying for Time Warner is very high and begs the question – will the benefits from vertical integration justify an $86bn purchase price?

Vertical integration of distribution and content programming would enable the combined AT&T/Time Warner to have control over content rights. Presumably, AT&T would have a competitive advantage over the other telecom players if it maintains exclusive content rights to Warner Bros and HBO content. However, will the content produced by Warner Bros and HBO lose its value if it is available only to AT&T/DirecTV customers? [1] And will FCC’s network neutrality mandate make it impossible for AT&T to execute its vertical integration strategy?

[1] Jon Lafayette, “AT&T-Time Warner: Wall Street Not Buying Vertical Integration”, Broadcasting and Cable, http://www.broadcastingcable.com/news/currency/att-time-warner-wall-street-not-buying-vertical-integration/160587, accessed November 2016.

Amazing post, Fangfang! Thanks for sharing your thoughts. I agree with you that cacao supply will change as a result of climate change but I share Ryan’s sentiment and I have to disagree that Mars’ cacao supply is at serious risk. There were several suggestions that were shared by Rohit, Ryan and Saurav above and I wanted to add two additional alternatives, that could help cacao cope with climate change.

One adaptation strategy could be increasingly growing selectively bred seeds that have superior drought resistance. Another strategy involves retaining and replanting other rainforest trees in the same areas as cacoa trees so that the rainforest trees can provide cacao trees with shade. This approach could help decrease temperature and evapotranspiration and provide protection from wind and soil erosion.

There is more information on the two approaches in the article below from the National Oceanic and Atmospheric Administration: https://www.climate.gov/news-features/climate-and/climate-chocolate

Very interesting post, Rohit! I echo everyone’s comments – it is very refreshing to see an emerging market conglomerate strive to make a real difference in addressing climate change. I read an article a while ago that emerging markets are outpacing the G7 nations in tackling climate change and I was very skeptical but ITC seems to be a great example of a company that has made great strides. [1]

That being said, as Shray pointed out, frequently companies in emerging markets use environmental policies as a PR technique and I have definitely seen many companies in Bulgaria do that. So I was wondering – how does ITC measure the progress that is makes towards the various environmental initiatives you laid out in your post? Are there clear targets and metrics that the company uses to stay accountable?

[1] Pilita Clark, “Emerging economies outpace G7 on tackling climate change”, FT, September 2014, https://www.ft.com/content/9bec7772-34e6-11e4-ba5d-00144feabdc0, accessed November 2016.

Thanks for the great post! I was also interested by the impact of climate change on the insurance/reinsurance industry and I was particularly intrigued by the issue of forecasting and pricing future risk. At an operational level, insurance/reinsurance companies use historical data and risk analyses to assess, price and underwrite new insurance policies. [1] However, climate change is forcing these players to re-evaluate their approach as the increasing number of weather-related catastrophes make current weather pattern forecasts irrelevant. The company I looked at, Allianz, is purchasing global data sets and flood maps to leverage its expertise in risk modeling to create new rapid flood maps that can be deployed in real time, immediately after a disaster takes place, which helps assess the impact of a flood in a more timely manner. [2] You mentioned that Munich Re is also investing in its forecasting capabilities and had built a climate change research center and a world class NatCat Service database for its clients. Have you come across any data that quantifies how the new research / risk assessment models developed as a result of these improved databases is helping mitigate tail risk caused by more frequent instances of natural catastrophes? My hypothesis is that private sector efforts driven by the insurance/reinsurance companies may be limited and that larger scale government partnerships may be needed to ensure that companies are deploying the most scientifically accurate models to assess risk in the future.

[1] Dave Grossman, United Nations Environmental Program, “Impacts of the Changing Environment on the Corporate Sector”, 2013, http://web.unep.org/geo/sites/unep.org.geo/files/documents/geo5_for_business.pdf, accessed November 2016.

[2] Allianz Life Insurance Company, “Sustainability Strategy”, https://www.allianz.com/en/sustainability-2014/sustainability_report_2014/sustainability_strategy/climate_change_strategy.html/, accessed November 2016.

I completely agree with the point that you both are raising about the true impetus behind PepsiCo’s environmental initiatives. While the company has certainly made progress towards its “Performance with Purpose” strategy, it has also spend significant marketing dollars advertising its sustainability efforts. Additionally, when it comes to supporting actual government policies related to environmental control, PepsiCo has been silent. For example, in 2015 Pepsi took no position on the “Clean Power Plan”, which was proposed by the Obama administration, despite the fact that the company identified the Environmental Protection Agency’s Clean Power Plan as a top priority. [1] The question is: can PepsiCo continue to avoid taking a clear position and what is the cost of remaining silent?

[1] Marc Gunther, “Why Corporate America is reluctant to take a stand on climate action”, The Guardian, April 2015, https://www.theguardian.com/sustainable-business/2015/apr/02/corporate-america-climate-change-fight-epa, accessed November 2016.

Great post and very thoughtful suggestions! I completely agree with some of the posts above that Chamonix and other ski resorts need to take a holistic approach to climate change and focus on technological innovations, diversifying revenue through a four-seasons model, and reducing carbon footprint from transportation.

In addition to the suggestions above, large resorts such as Chamonix also have the opportunity to design environmental policies for their purchasing departments. [1] Vail Resorts is a good example of a resort that formalized its environmental purchasing policies for all vendor contracts, which includes purchasing green cleaning products, recycled paper and printing purchases for lift tickets, and sustainable lighting for the hotels at the resort. By formally including environmental clauses in its vendor contracts, Chamonix can not only have a lasting positive impact at the resort itself, but it will also force the vendors it works with to adopt environmentally friendly practices, which can have a positive network effect. Chamonix can also look into partnerships with retailers and other resorts in the area to establish recycling programs to take back used ski and snowboard equipment for shredding and eventual reuse of materials. Finally, established and popular resorts like Chamonix have an opportunity to take a leadership role in fighting climate change because of its visibility to millions of tourists each year. For example, the resort can create awareness of the problem and communicate solutions to the tourists that visit the resort by participating in or launching industry wide initiatives, such as the NRDC and NCAA “Keep Winter Cool” initiative in the U.S. [2]

[1] National Ski Areas Association, “Taking Sustainable Slopes to the Next Level”, http://www.nsaa.org/media/21036/SS_Next_Steps_Guide.pdf, accessed November 2016.

[2] Natural Resources Defense Counsel, “Ski Areas Team With Conservation Group to Fight Global Warming”, https://www.nrdc.org/media/2004/040219, accessed November 2016.