I do agree with your last statement; today, sustainability has become a source of competitive advantage in the fast fashion industry and companies like Inditex are working in this topic because, not only is good for the planet, but also because it can be the key factor to win the battle against H&M. Consumers are demanding products that are consistent with their identities as human beings, creating a need that needs to be fulfilled by companies.
In this line for example, Inditex competitor, H&M has been working in these topics too and they are launching new lines of apparel 100% recycled.
One of the remaining challenges for the industry overall is how to make this initiatives profitable from a business perspective as well.
Totally agree with the remaining questions that you are presenting at the end of the essay. In that line I would add one major concern that retailers that are working in customization as Nike are facing these days; how to conserve and take the most of the brand equity built over time.
During all its history, Nike has built a brand communicating one big message to its customers: “Just do it”. Under that message we found Nike value preposition: high quality of every product plus the aspirational desire of being linked to top athletes in each discipline. Based on this framework Nike marketing rationale has been always over the particularities of each customer; it has been the strength of the brand and its message over customers individual preferences.
Nowadays, when “Getting personal” seems to be the name of the song for Nike, it is an open challenge how the company will adapt it’s message and conserve the brand equity when every customer will have the chance to design and has it’s own Nike experience.
This case is especially relevant from a strategic business perspective as we are not only talking about a company leader in the industry overall, but within the company the Sunderland plant present a major productivity and cost advantage.
I would like to dig deeper in a point that you have presented regarding the convenience or not of a local vertical integration of Nissan in the UK due the Brexit consequences for importing materials from other countries. From a pure strategic perceptive the decision of vertical integration depends of basically two elements: i) how competitive is the market upstream in the supply chain and ii) what is the relative power of Nissan over the suppliers upstream in the supply chain. The greater the competitive of the market upstream and the relative purchasing power of Nissan, indicate that more than a vertical integration, Nissan should seek to transfer it’s request and demands to the suppliers or to explore partnership alternatives, as you mentioned in your essay. Even in the case there is a lack of local suppliers in the UK, one alternative for Nissan is to start developing them based on a relevant volume that the car company can guarantee to these new suppliers.
From my perspective in these kind of tradeoffs we never have to forget what are the core competitive advantages of a company, and always looks askance when companies make jumps to business where is not clear that they have an advantage over the others players in the market
From my perspective one of the remaining challenges that arises from this topic is how to achieve an effective incentives alignment among the different stakeholders of the transportation market to make this artic route sustainable in the long term for everyone; clients, shipping companies, governments, insurance companies, ports administrators and the planet itself. It seems clear to see that if incentives are not aligned the climate change situation that we are already experimenting could get worse rapidly.
As Kristina was mentioning there are founded reasons to think that taking advantage of the Artic route can accelerate the ice melting in the region, but at the same time maintain the status quo can be even worse as less efficient ships and longer routes could have a major impact in the environment.
¿What is the proper balance of this tradeoff? Here is where the correct scheme of incentives can play a major role. One effective idea that should be studied in more detail is to create a market of Artic shipping rights , a scheme similar to what we are seeing for the CO2 emission across different industries, where those players that are more efficient and clean have an advantage over those less efficient.
Retail in general, but groceries in particular is facing major challenges in the UK due the Brexit consequences. I do agree with your arguments and the remaining challenges that Tesco needs to face in the near future, but I would like to highlight some opportunities that arises for Tesco from this protectionist policies.
It is not a secret that Tesco has been struggling in the last few years; not only it has lost market share against it’s traditional brick and mortar competitors in the UK, but also the company is having a hard time in the eCommerce landscape competing against pure online players as Ocado and Amazon.
For several reasons Tesco has been losing competitiveness in the market and Brexit can represent a breaking point to start turning over the results. It is clear from your essay that companies that wants to compete and win in the UK after Brexit are going to need to reshape their business model; from product mix in the shelves to marketing communication to consumers, everything will change and the company that can adapt to this new environment faster can be the winner in the long term. And here is where I think that Tesco could have a first mover advantage over it’s competitors.