This is a great write-up! I was actually shocked to read that Goodwill’s annual sales would have put it in the top 100 retailers in the United States!
Your piece does an excellent job of explaining how Goodwill is able to deliver through its focus on the triple bottom line. In one of the comments above, Elliot shares his perception of Goodwill as place with an older reputation that might not particularly resonate with millennials. My question to you is whether you think Goodwills business model will still be able to stand out as more Companies begin to advertise the focus they also have on the triple bottom line. Do you think social enterprises, and more narrowly those in the clothing segment, will begin to compete with one another in a “winner takes all” type of way? My hunch is that a lot of people want to make some effort to support social enterprises that do good, but don’t want to give all their attention or money to these types of businesses. For instance, is Goodwill competing more directly against TOMS than it is Wal-Mart? I could be totally wrong, and would love to get your thoughts.
Thanks again – great job!
Thanks for the post – I found it very interesting. Gelson’s in the Century City shopping mall was my mother’s market of choice and I think you did an excellent job of highlighting why. I know this isn’t a class about levered investing, but you mention the Company’s take-private earlier this year by TPG. I can’t help but question if all the factors you highlight for making Gelson’s the premium grocer of choice also make it an extremely risky business to lever up with debt. If we experience another financial slowdown, will Gelson’s customer base trade-down? If they do, the Company will be sitting on more expensive real-estate than its competitors (I don’t know whether the Company owns or leases its land) and also face high interest charges. A regional grocer also won’t have the purchasing power of its national competitors during a downturn to pass most of that pain on to its suppliers. Even Zac Efon might not be able to save the Company in a recession! Thanks again for the post – I think it does a great job of highlighting the key business decisions the Company has made.
Arkesh – Thanks for the post! I found it super interesting and appreciate the fact that you just expanded my options for eating healthy while on an HBS student’s budget and schedule.
I think you did a good job highlighting the critical decision the Company made to deeply penetrate selected markets as opposed to engaging in a widespread land-grab and it is easy to understand why the Company feels that this is a necessary strategy. However, it makes me question whether this may lead to unintended social consequences. The communities which, I assume, are most likely to use this service are those that are well-versed on the benefits of healthy eating habits and which are most likely to keep up to date with technology. This means the Company will most likely be solely focused on penetrating the wealthiest communities. I hope the Company doesn’t discourage its drivers from expanding into underserved and underprivileged neighborhoods; bringing affordable and healthy options to these communities could really have a social benefit! Thanks again for your post – I thought it was excellent.