Sander's Profile

You state falling car ownership is the biggest risk to OEMs, but I would agree with Ward’s point and say that there is a limit to how useful car-sharing services are in non-urban environments.

I would instead argue that autonomous driving is actually the bigger medium-term danger. The questions in my mind around autonomous driving are (a) who owns the vehicle and (b) is the software built on a closed or open ecosystem. On (b) I suspect the pressure will be to have an open ecosystem on which a dominant software provider will emerge (as happened with Microsoft on PCs). The alternative is for each OEM to have a closed ecosystem and its own autonomous driving software, something that may become very confusing and complex for consumers and may create barriers to communication between autonomous cars on the road. The risk for Ford of embracing an open ecosystem is that they may sacrifice part of their profitability and customer relationship to the software provider.

Fascinating post Lynn! It’s intresting to see that MyMagic started as an initiative to reduce friction and improve operations, but that its transformative impact may not be linked to cost but rather to revenue.

You suggest Disney is still trying to figure out how best to use the reams of data it is collecting. On this front Disney may be well advised to see what American Express, widely viewed as having one of the best customer engagement programmes in the world, has had to do to take advantage of big data. Amex embarked on a “big data transformation project” that was originally linked to improving risk management, but has increasingly shifted to improving marketing. Moreover, to take advantage of big data, Amex had to adapt the organisation to new ways of working, recruit employees with relevant skills, and go through iterative “test-and-learn” techniques to figure out how to use data to improve marketing and the customer experience. (1) There are some interesting parallels here to the design of innovation teams and the IBM Watson case we studied.

(1) http://www.forbes.com/sites/ciocentral/2016/04/27/inside-american-express-big-data-journey/#2544f451127f

Sharif, thanks for the great post on what MSF is doing in bringing medical care to the least developed countries in the world. I was especially struck by the reason MSF cited for rejecting vaccines offered by Pfizer.

We saw the great potential of telemedicine in the Narayana Heart Hospital case and I do believe it has the potential to democratise access to health care. It’s interesting to note that telemedicine has been available for decades and has been so slow to spread. Why do you think that is?

Telemedicine was available in Somalia back in 1992, albeit only to the US military. (1) Back then a simple Kodak camera was linked to a 9.6Kbps satellite connection. The data transmission cost alone totalled $145 per session. You identify telecommunications infrastructure as a constraint, but surely connectivity even in East Africa has come a long way since 1992.

(1) CROWTHER, MAJ JB, and LTC RON POROPATICH. “Telemedicine in the US Army: case reports from Somalia and Croatia.” Telemedicine Journal 1.1 (1995): 73-80.

Great post Katherine! It looks like the business model has evolved materially and I started asking myself whether, as a retailer, RetailMeNot (RMN) is my saviour or the bane of my existence.

It appears the business started as an aggregator of various retail promotions (online/offline) already in existence for the benefit of RMN’s visitors. As you point out, this frustrated marketing channel attribution (similar to what we saw in the marketing case on Catalina) and likely upset retailers. However instead of fighting RMN, retailers started working together with RMN to push their existing promotions and sales. Because the bulk of RMN’s revenue comes from their retail partners, who give RMN a 5% commission on sales, RMN now has little incentive to display crowd-sourced promotions from retailers who are not their partners and from whom they don’t earn a commission.

In doing so, I would argue the retailers have neutered RMN’s business model and kept offline promotions off the site. Browsing through the RMN discounts confirms my suspicions, because most of the offers take me straight to a retailer’s website as opposed to providing me a super-secret discount code. Perhaps when the next RMN shows up and starts gathering the exclusive deep discounts everyone is looking for, traffic will migrate away from RMN. Furthermore if RMN stops sending traffic to retailers, retailers will stop working with RMN and the business will be toast.

What a great subject for this challenge! I read your post with keen interest and am now curious to hear what Changi is doing behind the scenes. As we saw in the United case, airlines and airports have to deal with significant peaks and troughs in flight turnarounds. Peak volume can be 3-4x trough volume. (1) As Changi scales up to accept even more airplane traffic, are they doing more to even out the peaks or are they increasing peak capacity? Also, are there any untapped opportunities on the ground handling operations side? The majority of airport ground handling is typically outsourced (2) and in the case of Changi it appears the ground handling agents are dnata and SATS, who were recently engaged in a price war. (3) It looks like dnata is doing some interesting work on baggage management and reconciliation to reduce the incidence of errors. (4)

(1) http://centreforaviation.com/analysis/airport-ground-handling–industry-overview-2014-part-1-liberalisation-efficiency–compensation-195301
(2) http://www.prologis.aero/competences/ground-operations-and-airport-processes/
(3) http://www.todayonline.com/business/changi-airports-ground-handling-duopoly-price-war
(4) http://www.dnata.sg/technology.html

Elizabeth, an alarming article! If your core business is running a snow resort, and there is no more snow, that would represent a permanent impairment to the value of your business. I was interested to read that Vail Resorts has been diversifying its property portfolio and agreed to purchase Whistler Blackcomb. Perhaps they need to continue further down this path of asset management and explore a sale of their Vail property, preferably after a year of good snowpack.

I enjoyed your article on IAG! I wonder if your suggestion to delay phasing out older planes to retain a higher (and easier) emissions benchmark to beat is feasible. As you know, IAG operates in a highly commoditised industry where controlling costs is a key success factor. New planes have materially lower fuel consumption rates per block hour. IAG may need to harvest some of these savings between 2016 and 2020 to stay competitive. Furthermore, I wonder if increased focus on fuel efficiency and emissions is going to trigger more R&D spend by engine makers. It is conceivable that airplane engine product cycles start to compress and airlines will switch engines on their planes on a more frequent basis to ensure they keep up with the competition. This may be great news for engine makers.

Great post. Every cloud has a silver lining. I will request spiny dogfish next time I’m at my fishmonger.

Would love to see more detail on the relative contribution of climate change and unsustainable fishing practices to dwindling fish stocks. I’m concerned that changing the target of the fishing doesn’t address the sustainability of fishing practices. What if overfishing continues and also decimates stocks of spiny dogfish? Also, as some of your references suggest, rising sea temperatures are shifting northward the natural range of cod and other fish previouly present off the coast of Massachusetts. A boon for Canadian fishermen, then.

Great post! I agree that Chile is unlikely to impose a CO2 emission tax on its national mining company. Global CO2 emissions taxes will eventually be levied and should impact all copper producers in proportion to their carbon footprints. If Codelco can improve its operational efficiency to reduce its carbon emissions per tonne of copper production relative to competitors, it may actually get a competitive advantage.

However I wonder if going into the recycling business is an attractive alternative. The economics of the recycling business are materially weaker than copper mining. The profitability of a mining operation is largely linked to the mineral endowment that is being mined, and access to this mineral endowment constitutes a competitive advantage for the company operating the mine. The metals recycling business however is a different beast – the barriers to entry are only the capital required to build the recycling plant, and availability of scrap copper. As an example, the EBITDA margin of Aurubis, one of the largest copper recycling companies, is 3-4%, compared to high quality copper mines which typically have EBITDA margins in the 40-60% range. Why would the Chilean government want Codelco to go into an economically far less attractive business?

Great post! Especially enjoyed the concept of more frequent Super El Ninos increasing weather and rainfall variability. The implication is that hydroelectricity supply will become less predictable. Given that hydro is an important part of the energy mix, we will need more backup generation capacity to deal with times when hydro is not available. In TOM parlance, will we need to increase the system capacity to address variability? You suggest increasing the share of solar generation to address the problem, but solar is inherently one of the most variable energy sources. To guarantee stable baseload generation and avoid the electricity rationing you speak of, I am afraid we may need to increase capacity of traditional carbon-based power supply.