Wow, very cool! Talk about an industry in need of a technological update! One of the takeaways that these posts have highlighted is the need to focus on industries that have been operating in the status quo for a long time. It is easy at business school to focus on “sexy” or “techy” industries, but there has not been enough attention paid to industries such as this one. One problem that TOM217 brings up is that these industries often have entrenched incumbents or stakeholders that may be especially resistant to change. On the one hand, this makes disrupting these industries more challanging. However, the ability to think creatively about overlooked industries will give entrepreneurs a leg up on competition.
Very interesting post. I would love to hear what you think about recent forays into education technology by higher education, like Harvard. As Pooch mentioned, edtech companies can offer substantial cost savings to schools. Edtech also has the potential to offer significant cost savings to students, however that is not always the case. Many RCs took Harvard’s HBx CORE before starting business school instead of the traditional bootcamp that HBS usually offers. For many this was an easier way to take classes, for many it was not as effective. Do you think that higher education has a responsibility to experiment with edtech advancements or, conversely, do they have an obligation to continue to offer students traditional education approaches?
To follow – the danger to a company like Zillow is that as the real estate agent function decreases, they will have access to less and less data. Unless they partner with some of the companies that are using these new models, their value proposition will decrease because of the requisite decrease in the quality and amount of their data.
John and Alpha, I see both your points. For the most part I agree and think that is why the real estate industry has been slow to change. Buying a home is a complicated process and people have been somewhat unwilling to make such a big decision without professional guidance. However, the rise of these real estate tech companies do challenge Zillow. In the U.S., we pay 6% commissions on purchases and with such a big ticket price, that is significant. In other countries, people pay around 1%. The entire process of buying a home is much more complicated than it needs to be. Companies are finding ways to take some of the things that real estate agents used to do and automate them,. For example, companies like Dotloop (recently acquired by Zillow) manage the home buying process online, providing online document review and signing. Other companies have attacked the problem by focusing on the real estate search function. Still others have focused on the process of showing a home and are using technology (in some cases VR) to make it easier to see homes. The real estate agent function is being attacked from many different angles. As users expect more and more from their home buying experience, I think there will be a definite shift towards, at least, tech-enabled brokerages. While it may be awhile before the real estate agent role is completely eliminated, it will be systematically reduced.
Great post. What I find most interesting about this post is how controversial this topic is in Venice. While it seems obvious after reading this post that cruise ships are threatening the city and should be prevented from entering the beautiful canals, the topic is hotly debated in Venice and bans on ships have been proposed and overturned in recent years. While the cruise ships may cause flooding of the city and damage to historic landmarks, the tourism industry economically sustains the city. Using money generated by the tourism industry, the city is able to maintain buildings and invest in infrastructure. While it could be argued that the cruise ships are causing the very damage that must be remedied, Scott brings up the interesting point that Venice is facing issues of rising sea levels that will persist whether the cruise ships enter the canals or not. How will Venice deal with these issues if they are starved of cruise-related income?
The Venitian mayor himself opposes the ban on cruise ships, stating that such a ban would threaten thousands of local jobs. See generally, “Giant cruise ships ‘crushing the life’ out of Venice,” The Telegraph. The post raises an important question of how companies, and cities alike, need to strike a balance between economic and environmental sustainability. How should Venice position itself to survive in the short-term? In the long-term? How can companies, like cruise liners, enter into dialogue with partners, like Venice, to balance these competing interests?
Fascinating article. Like a few others have mentioned, there is an inherent tension in the solutions you brought up. The issue of more games during the day has been treated by others who highlighted the potential impact on viewership and vulnerability to rising temperatures. I find your observation on the role of travel really interesting. Reducing the number of games played during the season would seriously impact revenues from ticket sales and advertising. I wonder if there is a way to address this issue through increased coordination in the MLB. I could imagine a situation where the Red Sox travel to the West Coast, and in that visit, play all the local teams. Increased coordination might reduce the need for repeated cross-country travel, in a way that has a more limited effect on revenue. Changing the scheduled to optimize for for reduced air travel may not be visible to the consumer. In a more drastic approach, one could imagine a situation where league play is redesigned so that teams only play within their region during the regular season. This option would drastically reduce the need for travel, but would probably not be received well by fans who eagerly wait for storied match-ups with rivals.
Great article! Like Miltok I agree that cruises seem to be an unsustainable way to travel, particularly when compared to the impact of airplane travel. However, it may be notable that cruise travel accounts not only for a passenger’s transportation from one location to another, but also their lodging. A stay at a hotel would increase that traveler’s carbon footprint as hotels utilize large amounts of energy and water. It may be difficult to compare the two – especially in terms of impact on any given local environment.
Carnival’s perspective on climate change is very interesting. From a brand equity point of view, Carnival seems to be aware that it must make an effort to be environmentally friendly. It is hard to believe that their motivation is skewed by the fact that climate change may open up new ports. It may be the case that Carnival is trying to see (or communicate to investors) the opportunity in what is otherwise negative news for their company. While they may benefit from more accessible and desirable ports, they surely are hurt by the fact that rising temperatures are accompanied by increased incidence and severity of storms. Additionally, there is a significant risk that climate change will result in increased damage to coastal land due to rising sea levels and storm surges. See “Risky Business: The Economic Risks of Climate Change in the U.S.” Cruise companies like Carnival rely on healthy and vibrant coastal destinations to attract customers and drive revenues. Overall, it would be short-sighted for Carnival to not wholeheartedly pursue solutions to climate change threats.
Thank you for your post. Grupo Posadas seems to be tackling the issue of climate change by introducing internal controls that limit their company’s impact on the surrounding environment. The initiative you described considers energy, gas, water, waste and chemical contamination. As one company, Grupo Posadas can only hope to be a small part of the change that is necessary to stem the effects of climate change. Acting as responsible stewards of their environment is a necessary part of a long-term strategy, but what is their short-term strategy? Their efforts will do little to change the tide of climate change and will certainly not do so in time to prevent future harm to the company’s properties. Grupo Posadas must invest in infrastructure that can withstand storms. It must also consider if there are any ways to fortify its shorelines to prevent future harm. In the medium term, Grupo Posadas should consider investing in non-coastal properties that are better insulated from the storms.
Caroline, thank you for your post. Wb2016 raises an interesting point about how different players in the ski industry have responded to climate change. Vail has responded by diversifying geographically, into Canada and Australia, as well as seasonally, by investing in summer offerings. Vail has also invested in industry-leading environmental stewardship programs. However, Vail has been less present in policy discussions and deployed less capital in direct advocacy efforts. As a publicly-traded company, Vail must ultimately base its decisions on whether or not they create value for the shareholders. Therefore, Vail must critically assess how it deploys its capital. Using company resources to invest heavily in advocacy efforts creates minimal return for Vail’s shareholders. Policy is influenced by many actors in the political arena and Vail’s potential impact is limited. However, the company can evaluate what it is doing internally to address the issue of climate change. Caroline’s article details many internal programs Vail has instituted to combat the ill-effects of climate change. Vail’s EpicPromise initiative promotes energy reduction, recycling and water use reduction and supports many environmental charities. These initiatives can actually move the needle in a cost-conscious manner that shareholders can support.