RHT's Profile

Public policies to grant access of international organizations to Nigeria could be designed in a way to align incentives for both sides – local market development and expansion for the international organization. In situations in which there are no local companies to partner with, the government can provide a reliable environment to favor long-term investments that will have cascade benefits to the country, infrastructure and other capital-intensive sectors as examples.

One example is the Power Purchase Agreements (PPAs) for renewable energies in emerging markets. In Chile, for instance, several PPAs were priced in USD (not in local currency) for 15-20 years and renewable sources have priority in supplying to the national grid. In this scenario, international entities invested in capital-intensive assets in the country with a combination of international and local workforce, providing longer term benefits including technological development and cleaner energy supply.

I do not believe that China’s retaliatory actions represent a negative trend of rising nationalism. China’s requirements for foreign firms to partner with local partners provide an interesting degree of alignment of interests / win-win situation for both international entities and the local market/population.

After a semester of class discussions, I feel it is important to surface that global (and/or US) firms, particularly retail/consumer brands, expanding to new emerging markets can have a quite colonialist effect/be based on an imperialist mindset, in which firms “create a lot of value” for themselves and less attractive (or too diluted) benefits for the local market (e.g. mostly low-skilled job positions). Speaking from an emerging markets, protectionism presents this fine balance between encouraging local companies to develop/innovate and feeding complacency. To achieve new levels of competitiveness, such markets should do a better job in trading access to its growing economy/population/market with more strategic and long-term benefits.

In this scenario, international companies would benefit from access to an attractive market while locals access new technology, develop business practices and strengthen its economy as a whole.

In terms of packaging materials, besides options already mentioned above (reusable/returnable options), Blue Apron can work on reducing quantity. Green Chef, a competitor, featured an article on Fortune on the topic (http://fortune.com/2017/04/20/green-chef-sustainable-packaging/), with reduced pounds of ice that free up more space in trucks, decreasing packaging costs and improving transportation efficiency.

Another way to reduce the impact of refrigeration along the entire chain is to have/incentivize “communal refrigerators” with controlled access / retrieval located in key spots around the city (particularly in condos and high-traffic pedestrian areas, such as metro stations). It would be like a “vending machine meal kit pickup”. Assuming Blue Apron has enough volume, those “communal refrigerators” would be part of their marketing strategy and could eliminate the need of having refrigerators running on each and every household, reducing overall energy consumption associated with wasted “refrigeration” in sub-utilized refrigerators that sit (almost) empty for the majority of its time.

Besides improvements in the existing coffee chain (from seed development, farming techniques / growers communities, to waste/inefficiencies as pointed by Chi), an option for Starbucks to be best positioned for long-term success is to invest in substitutes to coffee.

With the idea of reinventing itself and leveraging its scale and brand power, Starbucks can influence customer behavior towards new types and formats of drinks, further expanding beyond coffee. As mentioned in our Marketing case (“Starbucks: Delivering Customer Service”), Howard Schultz, Starbucks founder, managed to transform a commodity into an upscale cultural phenomenon – and such influence should be used to shape future customer behavior.

Surprisingly, Starbucks’ mission does not include the word “coffee” (Check https://www.starbucks.com/about-us/company-information/mission-statement). With a mission “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”, there is space to explore drink alternatives (least creative examples are cocoa and tea blends) and reduce stress on the coffee chain. For several substitutes the challenges in large-scale and long-term sustainability could be similar to those of the coffee chain, still, there is value in diversifying risks inherent to a single crop and expanding customer base.

There are indeed risks in diverging from the heart of the company (its values are centered around partners, coffee and customers). Although I believe that coffee will continue to be the company’s core for several years, I also envision the scenario that coffee prices will reach a level in which average customers will feel forced to look for alternatives. With a fine balance not to cannibalize its current business, Starbucks could challenge its R&D / Marketing areas to come up with a product and a story to consumers that feel as functional & heart-warming as a good cup of coffee.

I believe that Maersk is already doing investments in autonomous vessels at some level. The company looks ahead of its competitors in testing innovative technologies as mentioned in the text, and autonomous vessels offer clear opportunities for further cost savings. According to Oskar Levander, vice president for innovation at Rolls-Royce’s marine unit, greater autonomy and unmanned shipping could cut transport costs 22%. Such economies would come from a combination of lower staff costs / higher fuel efficiency, with more space available for cargo (no need to have space and equipment to support people onboard) (https://www.wsj.com/articles/ship-operators-explore-autonomous-sailing-1472635800).

Security, regulatory concerns and infrastructure required (particularly on land) are the main challenge to operating an autonomous fleet. Because shipping is a widely international operation, it may take some time for different countries to adapt its port operations to receive/load cargo in an unmanned vessel. Also, as mentioned in the text, wider IoT adoption increases risk of hackers invading the system, and a major attack could have broader consequences and massive losses than today, particularly because a hacked system may lose its ability to react independently in a more irreversible way when compared to a human crew under a piracy attack (armed robbery).

(Source for restructuring process – 3M’s Investor Relations, 2016 Investor Day – http://s2.q4cdn.com/974527301/files/doc_events/2016/Inge-G-Thulin_CEO.pdf)

Besides the aspects pointed out by EK, I am concerned with increasing governance complexity and reduced agility when integrating R&D with customers. Defining a balanced partnership format, including conditions of exit and autonomy levels, is core to the success of the plan.

3M has recently been through a restructuring process, rearranging its former “Six Sectors” to “Five Business Groups” and combining 40 businesses down to 26 to increase overall customer relevance and drive scale. The company claims that the new structure has benefits such as increased agility and accelerated priority R&D investments.

Although integrating into the R&D of customers may bring significant value in terms of securing long-term partners and reduced cost to serve with targeted innovation, such arrangement may impair 3M’s independency in terms of choosing which problems to focus on. As a company grounded in innovation, having R&D departments sharing its time with an additional layer of approval and bureaucracy is inefficient and may hamper the development of brand new technologies in general.