S's Profile

It seems strange to spend so much money to try and wait the government out and try and “win customers back”. How much of the decline was driven by something that was under the customers’ control vs. policies implemented by the Chinese government? I’m not sure that there was much that the customers could have done differently even if they wanted to.

I like your recommendation of entering into JVs with local partners to try and appease the government / customers. One question that I have about how these typically work in China, is regarding who has operational control? Would Lotte be able to continue managing the Chinese operations, or would they need to take a passenger seat role to a local partner?

I guess it comes down to whether you think that consulting firms will increase headcount or decrease headcount in the coming years. I can see an outcome in which these firms invest lots of time / money into developing their talent pipeline. Whether this is by reworking business schools’ curriculum, or by targeting workers in industries that are being disrupted and no longer need the same level of people. I doubt that professional services firms are immune to disintermediation / the threat of digitalization, although it is probably one of the more insulated sectors due to the level of interaction with clients and need for original thought.

What’s the real benefit to Sovcomflot of pursuing the Arctic shipping strategy? Is it that they can transport faster/cheaper, or rather does it give them access to regions that they previously didn’t have access to? If the former, I wonder how much of the benefit they’ll pass through to their customers. If they don’t pass through much of the benefits, their customers will probably be indifferent between this route and prior routes, although they may take issue with all of the environmental/regulatory risks that other people have outlined. I don’t think that Sovcomflot should pursue this strategy, without having more information on the situation, it just seems like too much headline risk potential for them and their customers.

I really like Jonathan’s point above. It seems very unlikely that either Hubble or its board can have serious influence over how the trade policy ends up, and it would be absolutely catastrophic if the company were to continue growing and then have its supply shut off. Why not just go to another region while servicing the existing US population. I’d focus my marketing dollars in a non-US region (see if St. Shine will give you an exclusive in another reasonably attractive market) for now until there’s additional clarity in order to build up a safe alternative while continuing to use the existing supplier.

I like how you discuss that Gap is “doing well” and “doing good” at the same time. We’ve had that debate (whether or not you can do both) in class multiple times this year, and you highlight some very good examples (e.g., decreasing cost of goods sold) of how Gap is doing this. I’m not really sure how to interpret the quote from Morgan Stanley. I feel like most people would claim that “good ethics” are important to them when asked, although I wonder how Gap could actually measure the impact of the changing sentiment.

Convincing customers to bundle their orders seems difficult; you discuss how customers have ridiculous expectations for speed. Given Gap’s large retail footprint, maybe there is a way to further build out their omni-channel offering? For customers that place orders online, you could offer them a discount if they came into a nearby store and picked it up. This has the dual benefit of cutting out some shipping/packaging cost (in exchange for the discount) as well as getting the customer into the physical store (with the opportunity to make more purchases while they’re there).

Brandon, thanks for the post. Agree with Steven that the price will make it prohibitively expensive for smaller-value packages, so how will customers feel about this yet-proven technology focusing on their high-value packages? Also, I wonder who assumes the liability at each point in the way for the carried parcel? I like your point around how land-based regulations should be easier to maneuver than air-based regulations. This seems to be a point of real competitive differentiation over many technologies I’ve read about in the news over the last few years.