M. O'hara

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On December 1, 2017, M. O'hara commented on Contents May Be Hot: Can Starbucks Navigate A Changing Climate? :

And fundamentally, can a company like Starbucks truly reconcile its corporate mission to increase sales with its social mission to promote environmental sustainability?

I addressed this topic on another comment / company and was pretty pessimistic about that company’s ability to promote sustainability and increase sales/remain profitable. But Starbucks is one company I am not worried about on this front because they sell a premium product. I think Starbucks has some room to experiment with their cost structure as they try to find new farms and production methods. While a segment of their customers are price sensitive, other segments aren’t. Starbucks also has experience with lowering prices of some drinks to offset increases in others [1], a complicated pricing strategy. This experience coupled with the makeup of their customer base sets them up well to make progress on both the business and societal responsibility fronts.

[1] http://www.nytimes.com/2009/08/21/business/21sbux.html

On December 1, 2017, M. O'hara commented on Can a digital life translate to digitizing Life (Insurance)? :

Great piece. Your note on the focus on wellness is important. I’ve read about the advent of these programs for life insurance companies, and it always comes back to this piece of wondering if tracking steps and sleep is really allowing life insurance companies to reward behaviors that, in turn, lower their payouts.

However, I don’t think the biggest worry are the people with chronic conditions you mention. I think the primary area of focus should be in between — people who have bad health behaviors that are harder to track via a device. There is a growing body of evidence that discusses the link between chronic stress and leading causes of death [1]. However “stress” is hard to track on a wearables device. How can insurance companies nudge wearables companies to develop the technology to track the byproduct of stress in the body more closely? I think that is an important question. Investment or acquisition in the health tracking space both seem like options to explore, which you discuss.

[1] http://www.miamiherald.com/living/article1961770.html

The opening anecdote of this essay (about L.L.Bean selling out of boots) raises an important point as it relates to the evolution of their supply chain: channel management. This was touched on briefly in the essay, but warrants further discussion.

Forecasting demand is a difficult task, and required a mastery of how the different channels you sell through perform. Without that, even the most advances supply chain cannot save you. L.L.Bean needs to build a strong feedback loop between trends in their customer’s shopping habits and how they vary by channel, what they know about seasonality from past data and what that means for what they need their supply chain to do when.

Also on this note, given that L.L.Bean is a heritage brand that is growing quickly, they may be at a point when even they are surprised by how shopping behavior by channel. They are increasingly offering their boots in a growing number of retailers, and they may not know how shoppers across each differ. To contend with this, they should consider industry benchmarking.

Should this program be widely available for all patients, or those that have exceptional difficulties reaching the hospital?

My initial thought after reading this question that you posed was about pricing. Are telemedicine providers pricing these telemedicine visits at a rate that reflects that while they can get the job done in certain instances, they are not the same as an in-person visit? Your essay mentions a lot about costs that would be saved within the healthcare system when implementing this more widely, but the price is a critical component in my eyes. Are the early adopters of telemedicine pricing these visits at a rate that is truly reflective of the scaled down resources they need to conduct a telemedicine appointment? I am not insinuating price gouging, but there are probably many ways to arrive at the appropriate way to price a virtual doctor’s visit. What are health insurance companies willing to cover for a virtual doctor’s office visit? If the quality really is high, as is suggested by the data in this article, there should not be a difference. But perception is reality, and I imagine the perception of a virtual doctor’s office visit will mean that insurers will need to see a lot more data before there is a widespread determination about how similar prices for this offering should be to “normal” visits. Given this, I think keeping this limited to people in rural areas is best, so that they quality argument for this can be built up before it is rolled out across all consumers.

On December 1, 2017, M. O'hara commented on Ohio’s Big Bet on the Future of Transportation :

The regulatory implications of autonomous vehicles are massive because they are tied to the insurance implications, which is something not mentioned in this essay but which warrants some thought.

Currently, in most states, there is a mandated level of insurance coverage. Having worked in the insurance field, I know that the regulatory impact of autonomous vehicles is top of mind. One reason for this is because, currently, decisions about driving safety and insurance requirements are left up to the state, and for good reason. Driving conditions, behaviors and norms all vary from state to state, so it makes sense to regulate at the state level. Insurance companies, in turn, organize around supporting these legal requirements. Should autonomous cars become more widespread, however, this may lead to a standardization of how roads need to be designed to accommodate these cars. And driving quality itself will obviously become more standardized. Does this mean regulation and insurance of drivers will no longer be in a state’s hands, and will become a Department of Transportation concern solely? What does this mean for insurance companies, how they service customers and the value they provide? This would have been a good topic to explore.

On December 1, 2017, M. O'hara commented on L’Oreal’s Quest to Beautify Their Carbon Footprint :


Very interesting essay but I am not convinced that sustainability is a realistic goal for L’Oreal. My primary concern is with this statement: “In the long-term, the success of sustainable products depends on consumer demand as much as product innovation. It is L’Oreal’s responsibility to create that demand through consumer education. To achieve their vision, they need to bring along the consumer.”

I don’t believe that the focus here should lie on getting consumers to demand eco-friendly products. The larger and more important challenge to L’Oreal being able to do this is operationalizing it at their scale. L’Oreal is a mass-market cosmetics company. To the point above, it is typically difficult to source more environmentally friendly raw materials and maintain your price advantage. To expand on this point, I’ll compare L’Oreal to Tarte, an eco-friendly cosmetics company. Tarte started as an eco-friendly company, and thus, were able to operationalize their eco-friendly sourcing at a much smaller scale. Tarte’s 2013 revenues were $68 million [1]. That is a fraction of L’Oreal’s $20 billion + in revenue + [2], not to mention the multiple brands and SKUs L’Oreal has to manage. Even just starting with a making a few L’Oreal products more eco-friendly will be difficult, given the volume they are moving.

Additionally, despite the hype, there is not a lot of evidence that cosmetics consumers make decisions based primarily on the eco-friendliness of products. When I try to find information about this shift online, it seems like people say they care more, but still make decisions based on price (the data is all over the place, though, and it seems like more rigorous studies need to be published). It’s unclear if enough people would pay more for eco-friendly products. My hypothesis is that if L’Oreal wants to do this, they are going to have to make the economics work on the cost side and introduce it as an added benefit to a core product that is still affordable.

[1] http://www.brandgm.com/wp-content/uploads/sites/4/2015/02/MA-2014.pdf
[2] http://www.loreal-finance.com/eng/annual-report