Really enjoyed this post – I had no idea L’Oreal was innovating on so many fronts! I thought your recommendation that L’Oreal focus on data technologies through innovation and acquisitions to be particularly strong. For example, I found the “My UV patch” initiative to be fascinating as it solves a real problem, preventing skin cancer, which goes beyond the scope of beauty. As you mention in your post, L’Oreal’s challenge will likely be how to scale these initiatives “globally whilst managing pace of its technological innovation with rate of consumer adoption for the new connected beauty model.” In other words, beauty routines are so engrained in consumer psychology that I wonder whether L’Oreal will have to invest in reprogramming consumers to adopt some of these new initiatives, including UV wearables. I initially was skeptical of the extent to which the beauty industry would be able to innovate but your post convinced me that “the possibilities seem endless” and there is still room to solve real problems. And while Google glasses for a makeup class seem like a stretch, anyone who has taken a make-up class before knows how difficult it is to remember and replicate what you learn. The question for me is whether the costs/benefits of introducing Google glasses at make-up counters on a global scale make sense or whether this is more of a PR move as the company positions itself as “technologically savvy”. I am curious to see how L’Oreal balances the tradeoffs between investing in initiatives for the “public good” like solving skin-cancer vs increasing revenue streams for traditional beauty products like the Google glasses attempts.
Great post on an industry that has been extremely challenged by the rise of technology – thanks for sharing your experience. I agree with your view that “The Times needs to find a way to monetize the readers who are not paid subscribers”. Your perspective is that “quality journalism alone is not proving to produce a strong enough revenue stream.” However, I wonder the extent to which expanding their product offering may come in direct conflict with their mission “to enhance society by creating, collecting and distributing high-quality news and information”. For example, NYT Cooking recipes may require new staff to create and package these into the website/app which may divert resources away from “quality journalism”. You mention that “the customer expectation is to learn about news as soon as it happens”, but the Times is investing in initiatives like NYT Cooking which are more timeless. My guess would be that there is even more competition when it comes to recipes that are readily available online. If customers struggle to pay for news in a world of free data what makes you confident their willingness to pay will increase as they introduce timeless products beyond the news? My concern is that the Times could fall into a death spiral of adding more service, at a higher cost without this necessarily translating into brand loyalty and higher profitability.
This post was particularly relevant for me, as one of my uncles passed away without warning due to arrhythmia at a relatively young age. What was most frustrating was that there was not an immediate answer as to what he could have done differently to prevent his early death – while he was aware that he had arrhythmia his doctor had not expressed much concern and proper monitoring was lacking.
For this reason, I thought your proposition that MoMe Karida “move from the diagnosis of arrhythmias to help with their management by better forecasting arrhythmias” to be particularly strong. Reflecting on our class discussion about IBM’s Watson, it seems that machine learning has the most potential when applied to questions we currently do not have answers to. As you mention, arrhythmias vary across different patient populations and there is little consensus on how to treat these effectively: “by applying machine learning to its unique data, MoMe Kardia could help doctors better understand what may be triggering their patients’ arrhythmias and how those triggers might vary across different patient populations.”
You mention that using MoMe will result in significant cost-savings as it reduces the amount of humans scanning heart data. If I understood correctly, it would cost doctors ~$250/patient per month to use MoMe. This made me think about the Public Goods question we discussed in class and whether MoMe will eventually be seen as having a responsibility to provide cheaper services. Considering this is a life/death situation I wonder whether they will have to increase accessibility as the services would cost ~$3,000/year per patient (assuming doctors price at breakeven). Perhaps MoMe can reduce prices as they expand their consumer base in a subscription/type model focused on preventive care with reliable cash flows.
Thanks for sharing!
Thanks for writing this post – very informative on a business that seems to aim at “making a difference in the world”. You do a great job of describing both Bridge International’s strengths (cashless payments, consistent experience, teacher accountability, overall increased education etc) and weaknesses (over-standardization and lack of individualized student attention). I also liked your recommendation of leveraging existing infrastructure to “better monitor and identify potential problems” but it was not immediately clear whether this is feasible, and if so, why the company isn’t already doing this. For example, perhaps teachers are not properly trained at monitoring and identifying problems and this would require additional investments/resources.
Additionally, this post reminded me of our class discussion on IBM’s Watson machine. In particular, I wonder the extent to which Bridge’s current technology may soon become obsolete and replaced by machine learning. According to your post, the script Bridge’s tablets use is “extremely prescriptive – telling teachers exactly what to prepare, say, and do (down to pronunciation and physical gestures) – and teachers are trained not to deviate from it.” This approach seems to be in line with traditional uses of machines, which function as a result of direct human input. I wonder whether you could create a machine that learns from various algorithms to pull the most relevant teaching lessons together. For example, would it be possible to create a tablet that can determine the best direction a class should go based on past successful comments?
While we may still be far away from a self-driving teacher, is it too farfetched to imagine a world in which teaching may become more automated without increasing standardization? Considering how difficult it was for Watson to figure out black/white questions it seems that this may not be a current possibility. However, I do think that learning is at its best when there is spontaneity in classroom discussions and content is not predetermined. I wonder – could you imagine a case method being taught by a computer in the not-so-distant future? Food for thought…
This post was easy to follow and very enlightening when it comes to the process of beer production – I did not realize that “90% of water use occurs outside of brewery walls through the sourcing process”. Intuitively of course this makes when you think of the product, but the 90% figure really drove home the relevance of your post and why AB InBev should take the threat of water scarcity seriously. I would be curious to hear more about what a “high impact, high control water risk strategy” would imply. While this strategy sounds great in theory, your argument would have been more powerful if you had provided concrete actions and the the costs/benefits of adopting these. For example, does high control necessarily imply ownership of water production sources? Moreover, if you end up vertically integrating with regards to sourcing water how will you ensure against fluctuating water patterns – would you need to diversify your assets? You mention that “Globally, 1.2 billion people do not have access to clean, potable water and over 4,000 children die from water-borne diseases every day”. My concern is that this could potentially exacerbate country risk as governments prioritize access to water for their constituents over foreign corporations in extreme situations. In summary, there seems to be a large spectrum across levers like impact and control and it was not immediately clear to me what the implications of your recommendation might be.
One question that I would like to pose is to what extent luxury can be a driver of sustainability. You mention that: “This superior driving performance is accompanied by a high price tag; BMW’s electric/hybrid line i-series starts at $42,400, with its latest model i8 costing from $140,700.” It seems that not that many people may be able to afford these cars thus limiting the real impact that a company like BMW may have in helping fight climate change. Perhaps the answer to this question is that luxury sets the standard for the rest of the industry, and other car companies will be more compelled to follow in their footsteps regarding sustainability as a result. In other words, if consumers aspire to Tesla/i8 BMW models, this might fundamentally shift the emphasis other carmakers place on investing in innovation regarding sustainability. If this is the case, your recommendation to invest in perfecting their software for their own models makes sense. However, I agree with PThatai’s view that BMW could take a more proactive approach towards increasing the market share of electric vehicles more generally by focusing on initiatives that go beyond the company’s own targets. Additionally, aligning the brand’s image with eco-friendly initiatives though leadership at an industry-wide level may also be beneficial for BMW from a marketing perspective.
This was an interesting take on jeans – a very tangible and specific product that we regularly use. I definitely agree with your view that Levi Strauss deserves credit for designing a process that reduces water consumption at the manufacturing level. You also do a great job of going beyond production to describe the impact consumers have on water consumption during the product’s lifespan through regular washing. I agree with your view that promoting less washing is generally in conflict with Levi’s business goals, as less wear and tear would result in longer replacement times.
However, I would like to push back on the action-plan you have proposed as I don’t necessarily think it resolves the tension between longer replacement times and fewer consequent sales. You mention how “in order to better align incentives, perhaps Levi Strauss could spend some time exploring innovations in stain- and smell-resistant denim. Such features could both allow Levi Strauss to charge a premium for their higher quality product and put customers more at ease over skipping their weekly laundry cycle to save some water.” What is stopping Levi’s from charging a higher price for environmentally friendly goods in the first place? Recent reports suggest that consumers are willing to pay extra for a product from a company known for being environmentally friendly as opposed to other purchasing drivers.  What makes you believe that customers would pay more for “stain- and smell-resistant” denim? Additionally, this would presumably reduce washing even more, further exacerbating the tension between sustainability and sales goals.
The question that I would ask myself is whether there is a ceiling regarding potential price increases given Levi’s customer promise of providing high quality, affordable jeans. If so, what alternative solutions could you find that might decrease the misalignment in incentives you describe? Maybe Levi’s could consider selling special washing products for their jeans to provide an additional revenue stream? Other options might revolve around having incentive programs in which you can donate old jeans to be recycled in exchange for a discount on new jeans to incentivize higher turnover? I think that this is a particularly tough example because Levi’s jeans don’t tend to go out of fashion as they have a rather traditional style. Another idea might be to explore product lines that are more “fashionable” and more likely to be recycled after a few years. Here, you potentially could take market-share away from more fast-fashion companies that don’t have sustainable production if consumers really do care about purchasing from eco-friendly firms.
 Nielsen, “The Sustainability Imperative: New Insights on Consumer Expectations”, October 2015
I found your post to be a refreshing take on sustainable luxury – such an interesting read! I agree with your conclusion that while EP&Ls are a step in the right direction, they do not have an impact in and of themselves. In other words, EP&Ls inform consumers and the broader community/industry of the costs of unsustainable goods but do not necessarily provide an action plan for solving the issue at stake.
I want to push back on one claim that you made that particularly stood out: “Diversification across suppliers and materials will not be enough to protect Kering’s brands’ product lines and production processes from the effects of climate change.” This statement relies on the idea that the raw materials needed for luxury goods are fixed, leaving little room for innovation/change. Some luxury firms with high visibility such as Loro Piana have recently shifted away from traditional cashmere and are instead using Alpaca in their products, which is much more sustainable. According to the Natural Resources Defense Council, “an alpaca drinks less water than a goat and can handily grow enough wool for four or five sweaters in a year. It takes four goats the same amount of time to produce sufficient cashmere for a single sweater”. (See website link below for full article). Additionally, Alpaca is more durable than cashmere, potentially reducing overall consumption over the lifetime of a customer.
As a luxury firm, if you decide to change traditional raw materials you might have to consider investing in a new marketing plan to manage reactions. If you look at Loro Piana’s website you can see that they are investing in informing the consumer about the quality of Alpaca, perhaps as a way to mitigate against misconceptions. Another action you could take would be to vertically integrate some of the Alpaca farms into your supply chain to ensure sustainability (because Alpaca is not a national resource you may face less risk in the form of country expropriations).
Really interesting and though-provoking piece. I completely agree with your conclusion that “Walmart can have a huge impact and should therefore be held to high standards of sustainability”. On the other hand, I wanted to push back on the following view: “It is difficult to see any real benefits or opportunities for Walmart to take advantage of when it comes to the issue of sustainability.” If, as you claim, Walmart’s business is at material risk in light of climate change, are there really no opportunities for the firm to protect itself? I would think that the more material the challenges facing the company are, the more beneficial and important it is to convert these into opportunities. This made me think back to the IKEA case, where the firm ultimately had no option but to innovate and put pressure on suppliers to adopt more sustainable practices – otherwise they might run out of trees to build furniture with down the road. Maybe Walmart could train its suppliers to be more efficient, setting a higher standard which other firms might eventually replicate if significant cost-savings are achievable, helping the industry as a whole. On the supply chain side, could you envision initiatives similar to that of the US fleet that you mentioned resulted in “$1 billion in annual savings”? While this may prove expensive in the short-term it may be the only way to ensure the long-term viability of Walmart’s business. My hunch is that the answer depends on Walmart’s ability to influence supplier and consumer behavior effectively.