Thanks for the interesting post, Jon! Not only is Nest a product (i.e., remotely controlled and machine learning thermostat), but it is now becoming a platform. As Emily mentioned, Nest is becoming a hub for other products in the IoT under its “Works with Nest” initiative. Products ranging from appliances to robotic vacuums and from app-controlled garage doors to Mercedes vehicles are all capable of connecting to the Nest platform. (Reference: https://nest.com/works-with-nest/). As Nest becomes know more as a platform than simply a thermostat manufacturer, the company’s business model will surely change to reflect the new value that its creating for and capturing from customers. One salient example was Nest’s acquisition of Dropcam in 2014. Similar to the effect of the Google acquisition, the Nest / Dropcam acquisition resulted in infighting and ultimate departure of Dropcam’s CEO months after the acquisition. One consequence of this internal strife was Nest had to backtrack on products previously announced or recently launched that the Nest management chose not to support, similar to the Revolv acquisition that Emily mentioned. This case study presents a great example of how acquisitions across technology companies can not only result in fundamental changes to a company’s business model, but, arguably more important, fundamental organizational changes through the merger of two cultures which leaders dealing with the impacts of technology and digitization must also consider.
Thanks for the interesting post, Rob! Given its necessity for sustaining life, any technology that can effectively improve access to safe drinking water is worthwhile. This application is interesting because of the control that it gives to end-consumer and certainly makes sense from a value purchased vs. value consumed perspective. But is the end-consumer the right target customer? Perhaps, as Ben suggested, nonprofits interested in this area or government agencies responsible for clean water might be more appropriate. If consumers cannot afford the product, to which both Alex and Ben have alluded, their natural response will be to call for such technology at the local municipality level who has the ultimate responsibility for providing safe water. Regardless of these concerns, technologies like this will certainly continue to change the business models of companies engaged in water treatment, testing, and distribution. Given the additional transparency provided by this technology, business models may be modified in the future to better match pay with performance which may help mitigate issues like we saw in Flint.
Great post, Zach! While it was interesting to read about ESPN’s efforts to leverage technology and react to the increasing changes in fan’s consumption of sporting events. Haibo alluded to the decoupling of content and distribution, and as you’ve mentioned much of ESPN’s original content is likely to get more expensive over time. ESPN is at the crosswords of both content generation in its Sportscenter and commentary shows, but also as a distributor of sporting content for the major sports. ESPN seems to be quite vulnerable to being disintermediated by the major sports that are creating independent channels like NFL Access, the MLB Network, etc. If ESPN is circumvented by distributors of “skinny bundles” or major sports channels go directly to consumers via Apple TV apps and future streaming innovations, ESPN will only have its original commentary content to provide customers. The question at that point is whether customers will be willing to pay for that content or whether it will be offered as a value-add by the major sports via their channels.
Either way, ESPN (and by extension Disney, where ESPN is the largest contributor to profits for the company) seem very vulnerable to technology advancements and further digitization. Thanks again for a great case study and analysis!
Thanks for the post, Graham. For the reasons described in your post and subsequent comments, it is clear that EHR has many benefits. A few thoughts regarding how technology might change the business model’s of companies working on the three stages of the EHR roll-out that you’ve identified:
1) Data Capture and Sharing – Could voice recognition technology be utilized to make medical documentation more efficient, similar to Nelly’s suggestion about scribes? Additionally, Google had a health initiative a few years ago in which Google users were encouraged to put their health data into Google Health. Unfortunately, however, Google shut down the project in 2013. Ideally, as Nicole mentioned, a centralized database with all patient information could provide providers with a better view of patients and enable them to provide better care.
2) Advance Clinical Processes – With the assistance of technology and evidenced-based insights into patient care, could processes be sufficiently improved and controlled so that lower-cost workers are able to provide the needed care? Similar to the clinical processes employed by Dr. Shetty in India. If lower-cost employees are empowered by technology to provide more technical care, it could help reduce overall healthcare costs.
3) Improved outcomes – In line with your comment about IBM’s Watson, could technology and artificial learning models help elucidate conditions or patterns for which a future health challenge is imminent. In such situations, providers could potentially use these insights to intervene or encourage lifestyle changes that may save a patient’s life.
Thanks for the post!
Thanks for the interesting post, Walter. Amazon is a great case study of how technology and digitization has been harnessed to provide more value for customers and certainly cannot be covered comprehensively in 800 words. It seems as though Amazon’s own business model and organization have changed the more it has embraced technology. For example, you mention that Amazon’s original business model was to provide books/textbooks cheaper by selling directly to customers online. While that model remains core to Amazon’s operations (i.e., direct-to-consumer selling of virtually any product via Amazon.com), Amazon’s revenues and profits appear to come from other channels like the cloud, as you allude to in the post. According to the NY Times, Amazon Web Services (“AWS”) now accounts for approximately one-third of overall company revenues and over half of operating income as the most popular cloud service for start-ups and outsourced IT service for bigger companies. (Source: http://www.nytimes.com/2016/04/29/technology/amazon-q1-earnings.html?_r=0) Additionally, Fulfillment by Amazon (“FBA”) is another evolution and iteration of the company’s business model. FBA required the addition of warehouses, inventory management software, myriads new employees, acquisitions of robotic technologies, and now leases of 40 cargo planes as part of Prime Air. (Source: http://www.wsj.com/articles/amazon-reveals-prime-air-cargo-jet-1470378818).
As you mention in your article, Amazon will continue to leverage technology and reiterate its importance in the business. As they do that, the business model is likely to iterate as well as Amazon continually looks for more ways to create for and capture value from its customers.
Thanks for the post about such an important industry: water! Xylem has been a leader in water testing, monitoring, and treatment and needs to leverage its position to generate more attention for sustainable water practices. I like Xylem’s focus on strategic partnerships to combine technology and water expertise to address the long-term availability of potable water. In addition to Xylem’s purchase of Sensus, Xylem announced last week its intention to acquire Visenti, a Singapore-based water analytics company aimed at supporting water utilities and helping them to optimize their water use. Xylem’s embrace of technology sets the standard for other water testing and monitoring companies that have historically been slow to adopt technology and improve their efficacy and efficiency, companies like Hach Industries or GE Water that have been satisfied with status quo.
I also applaud the company for reaching across industries to involve other leading companies and incorporate technology to address the long-term availability of water for the United States. Earlier this year, Xylem joined with companies like Dow Chemical, Google, and others to “identify the imminent threats to U.S. water security”, calling on Congress and the White House to institute a Presidential commission to draft a water strategy for the nation and to bring overdue attention to this important topic. Hopefully Xylem can continue to play an integral role in addressing efficient and sustainable water use for years to come.
 Xylem Acquires Singapore-based Smart Water Analytics Company Visenti, http://www.waterworld.com/articles/wwi/2016/10/xylem-acquires-singapore-based-smart-water-analytics-company-visenti.html
 Technology Leaders Identify Imminent Threats to U.S. Water Security and Call for Comprehensive Strategy to Map a Secure Water Future for the Nation, http://investors.xyleminc.com/phoenix.zhtml?c=247373&p=irol-newsArticle&ID=2144405
Thanks for the article, Majken. While 70% of the planet is covered by water, only 2.5% of it is freshwater with a mere 1% being accessible. As you’ve alluded, continued climate change makes Nestle’s business vulnerable to changing water sources and availability. I found the California dilemma fascinating given the state’s aquifer is fundamentally shifting away making the state more of a desert and thereby increasing the value of the state’s vital national forest water source. Given these changing dynamics and Nestle’s dependence on water for its water products as well as its other manufacturing operations, I hope Nestle continues to be an outspoken leader in water sustainability and efficiency practices. While a 41% reduction in water use is certainly admirable, the company should continue to focus on water reduction techniques and encourage other multi-national conglomerates to follow. In addition to the Water Mandate and Water Resources Group, Nestle should champion a “Nestle” standard in water efficiency and preservation to ensure its viability and the viability of all other companies dependent on water for their operations.
Great article, Neil, and very interesting perspective on a company/industry that has an impact on the environment. As I read your post, the incentive of tax credits came to mind as well. Taking a slight variation to your suggestions, couldn’t local governments withhold a portion of the tax credit unless a production crew can certify its project had a minimal effect on the environment? Perhaps local governments could negotiate with production companies to include a line item for environmental cleanup or restoration reserves, similar to reclamation obligations for mining operations? I agree that the onus needs to be on the production companies and some compelling incentive in place to ensure that production companies leave an environment better than they found it. Certainly a tough problem to solve, but it seems most feasible to tie the incentive into the tax credits and the “draws” for a production company to a certain state.
Thanks for the interesting article and analysis, Jon. In addition to what you’ve highlighted, Coke seems vulnerable to increased shipping costs as it continues to be purchased around the globe and as its sales mix shifts to more emerging markets. As you’ve outlined, the company needs to ship to and refrigerate its product in these foreign markets which increases greenhouse gas emissions. What can the company do to counteract those emissions? Can the company change its bottling locations to reduce the greenhouse gases without increasing overall costs? Can the company partner with local bottling operations to reduce emissions? Can the company increase its minimum order quantities to reduce the number and frequency of shipments to reduce emissions? These are likely expensive proposals but worth an analysis the geographic sales mix shifts toward emerging markets.
Another potential vulnerability for Coke is the impact climate change could have on its product inputs. Given the significant amount of sugar in Coke’s products, can the company get involved with sugar beet farmers to reduce the impact of climate change on one of its primary ingredients? Can Coke encourage, support or empower farmers to implement sustainable practices or innovate new technology of processes to reduce the impact of climate change on their crops? Regarding Coke’s bottling and packaging, American’s throw away approximately 14 million tons of plastic bottles and packaging each year . Given Coke’s iconic Classic Coke bottle, what can the company do to increase the likelihood that those bottles are recycled as opposed to burned off or disposed of in landfills? Coke should consider engaging its consumers in recycling and reducing emission initiatives to slow or counter the effects of climate change on its business and the planet.
 The Link Between Plastic Use and Climate Change: Essential Answer, http://alumni.stanford.edu/get/page/magazine/article/?article_id=30602
Thanks, Daniel, for the interesting article. While I appreciate Nutella’s involvement and support for the RSPO, POIG, and other organizations focusing on the impacts of climate change, I feel that the company has an obligation to take a more proactive, hands-on approach to addressing the problem. Given the significant impact that deforestation has on greenhouse gas emissions, I would hope to see Nutella focus on identifying and working directly with sustainable mills and plantations. A collaboration with the growers to discover sustainable solutions would be more effective than simply testing their operations for compliance with sustainability standards. Some ideas include identifying new technologies that enable palm fruit cultivation without having to clear forests, or working with an innovative company like Indigo to develop more resilient or high-producing palm fruit seedlings or substitutes. In my opinion, corporate responsibility means using the resources at your disposal to make a bigger impact where possible.