Interesting article, Bruna! It’s thought-provoking to think about whether traditional grocery stores are threatened by e-grocery shopping or not.
It’s advantageous that HEB partnered with Instacart and Shipt, because it creates another distribution channel and perhaps attracts new customers (like HBS students). However, there are also some questions about the profitability and sustainability of delivery models like Instacart: http://fortune.com/2016/03/24/instacart-profits/
HEB (and other traditional grocery stores) could think about ways to collect better point of sale data, through mobile for example, and think about whether they can make grocery shopping more convenient, such as in-store pickup, where customers don’t have to spend the time shopping but can still ensure the quality of their produce. Like you say, I think that HEB can still create a good customer experience with a reason for people to shop at their stores.
Good read, Craig! I also wrote on the real estate industry (Zillow) and was impressed by Redfin’s model. I think that real estate such an interesting space, since it’s one of the last traditional industries that hasn’t been dis-intermediated.
From my research, I understood Redfin to be one of the only companies that tried to disrupt the stubborn real estate industry, but that it has reverted back to the traditional model in some ways. Redfin has re-structured bonuses such that 75% is based on home price and 25% on customer satisfaction. Otherwise, the company was losing top-performing employees who weren’t compensated high enough for selling the multi million-dollar homes. Since this structure increased overall compensation, Redfin also had to decrease the average rebate to buyers from 2/3 to 1/3, thought it gave bigger discounts to sellers. To me, this shows how engrained the model is due to customer preferences of wanting an intermediary in this transaction, as well as the legal and financial complexity of the purchase/sale.
I agree with your suggestions and recommended that Zillow do the same – it would be very valuable if back-end functions like digital contracts and automated auctions were added to make home buying easier.
Well-written, Rob! It’s sad to see print newspapers declining to probably extinction, and like you mention it’s a vicious cycle with dependent stakeholders—advertisers and subscribers—that’s making the industry shrink even faster. At the same time, what an interesting startup idea. It’s basically a complete unbundling of newspapers. You point out the advantage for customers, who only pay for what they want to read, but it’s also advantageous for advertisers, who can more directly target customers.
However, I have a few comments/concerns about the model. First, customers seem more reluctant to pay per use; even if it’s a small amount, they will think twice before clicking on the article and not want to incur a charge (even if it’s irrational). A better business model might be bundling packages of articles (i.e. 5, 10, or 20 articles per month). Second, the total revenues will likely be lower than in the subscription model, and I’m concerned about the quality of the content (if writers aren’t paid enough to write). This incentive structure might also change the topics people write about or how they present opinions, focused more on getting buzz than on quality journalism. I don’t have a solution for the second problem, but it’s something to think about.
I’m hoping that there’s a way to monetize the industry, such that quality content exists and consumers are willing to pay for it.
Interesting piece, Will! I also have a Fitbit, which I got from work, but used because of competition with co-workers like you had with your sister.
I had not previously thought of Fitbit as being that innovative from a technological standpoint, but as successfully commercializing existing technology. Of course, pedometers tracked steps before Fitbit, and I believe there was technology to track heart rates and sleep patterns, but Fitbit incorporated it into an easy-to-wear wristband that became trendy and social!
I agree with your opinion that Fitbit will not be competitive with the Apple Watch in many ways, but I think that Fitbit can continue to win price. I also think that while Apple can keep adding more features, only certain users value these features; others (late adopters, more casual walkers and runners) like the basic Fitbit to track their fitness levels. However, Fitbit needs to make sure that its devices stay relevant, a harder thing to do for a trendier product. Like you mention early on, perhaps Fitbit can leverage the fitness data from its customers (without violating their privacy) to pivot.
Such an enjoyable read, Emily! The title and puns are wonderful:) I find it remarkable that a farm-based equipment manager has adapted so quickly to the digital trends. Especially after reading Indigo, I understand how much information about weather / soil quality can help farmers, and you introduce the additional benefit of IoT connectivity between machines as well as remote management.
One thing I would like to know is how much up-front investment these services will require, and whether farms will be willing to and able to pay for said technology. You mention adoption rate, with the concern about marketing reach and technology training/support, but I wonder what the economics with look like in terms of additional cost v. benefit, and how affordable this technology will be.
Nice piece, Margaret! Now I’ll be more appreciative when I get to ski on real snow. One thing that stands out is how ski resorts are harmed by climate, but not necessarily responsible for climate change, further highlighting one of the biggest incentive issues for the topic in general.
I like how your next steps focus on both how Vail can become sustainable, by focusing on energy efficiency and renewable energy, but also keep the business in mind, by suggesting that they use their assets (land, lodging, dining) to re-brand and focus on year-round activities. I’m impressed that they have started making decisions, such as acquiring Whistler-Blackcomb in Canada, that take into climate change. Perhaps even without climate change, this would have been a wise investment, but I think that more companies should be thinking ahead in this way.
Very engaging piece, Craig! It’s incredible that Marriott’s sustainability ranking is such a highly visible metric for the company and investors. One thing that is so striking about the hotel industry is how small the steps can be to create such as huge environmental impact. Unlike some of these other companies that need to significantly invest in their supply chain or re-engineer materials for their products, Marriott can simply offer incentives for guests to re-use their towels, install light-sensors, and retrofit new shower heads.
Given the relative ease of implementing sustainability measures, I think that it’s critical that the hotel industry do even more. First, I hope that Marriott serves as an example for other hotel chains to adopt similar (or better!) practices. Second, I think that Marriott can implement more simple measures, which employees can contribute. One idea is for the hotel to provide guests with coffee mugs to be reused, rather than the disposable paper cups. Third, in addition to LEED certification, Marriott should incorporate sustainable construction practices when doing restoration or building new properties.
Well done, Cristina! The electric motorcycle is a really cool concept, and it makes me wonder how big the potential market is. It’s interesting that Harley-Davidson and BMW have already released electric motorcycles, but haven’t had much success. I wonder how Yamaha will differentiate its product from the others. Based on the penetration of motorcycles/scooters, it seems logical to launch in Southeast Asia; I wonder where Harley and BMW launched and where Yamaha plans to launch.
While you bring up an interesting point, about Yamaha competing with itself for traditional and electric motorcycles, I don’t see this being an issue. If you think about Toyota, its Prius has had good success but its traditional cars continued to sell, perhaps to a different customer. I think that if there is interest for the electric motorcycle, then the two products can both exist. Since motorcycles are less-polluting than cars, are they still forced to pay congestion charges in cities that have them? If not, it might be difficult to change customer behavior for motorcycles, although it is a logical next step after electric cars.
Very interesting, David! One question that I have is whether the company is internalizing the costs or passing them onto customers.
You mention that Nestle has invested $0.5B to improve sustainability, by directly sourcing from farmers and investing in disease-resistant plans. Would these measures increase the price of chocolate for the customers? And if so, how will customers react? I can imagine both coffee and chocolate to be very competitive industries, since they’re made directly from commodities, but perhaps there is less competition for more luxury products where customers are brand loyal.
It’s clear that there are large regions, such as Brazil and the Ivory Coast that have predominantly produced cocoa beans. You suggest that Nestle focus on some other smaller regions that may emerge as better regions as climate change occurs – Have these regions been identified, or has Nestle done any research to identify these regions? It does seem like a potential opportunity if such regions can be identified.
Nicely written and researched, Alicia! I also wrote on Nike and its sustainability efforts. You propose some very insightful solutions, from (1.) working with farmers to manage resources while harvesting raw materials to (2.) changing the washing requirements for consumers.
Nike was incentivized to work with a Taiwanese facility to come up with the ColorDry technology, since the water savings by this supplier’s process were incorporated into Nike’s sustainability index. With respect to the first point, there must be both an incentive for Nike to change its farmers’ habits, and the farmer must be equipped and compensated for doing so.
With respect to the second point, there must be a coordinated effort for the washing requirements to have an impact; most people in Western countries do loads of laundry and since most of their clothes will require washing, they will still do the same number of loads and use the same amount of water. This raises a bigger question — What will incentivize the apparel industry to come together to reduce the need for water in laundering?
Lastly, I think that MPDHBS2018 raises an interesting question about whether Nike shares its ColorDry technique with its competitors. While I’m not sure if it does or not, Nike does share materials sustainability information through the MAKING app, which allows anyone to see the environmental impact of materials that are widely used in its products. Nike has to strike the right balance between staying ahead of its competitors and sharing sustainability best practices.