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Thanks for your note!

You raise a very interesting question, as the company is just now transitioning towards adopting more decisive actions to monetize their sustainability efforts (mainly focused on selling carbon credits). This is something that was not the first objective of the company as it set out to institute the changes mentioned in the article – rather Bio-Pappel wanted to adapt to changing trends in the market that favored environmentally friendly initiatives. However, as it has been successful in this objective, it is now seeking to further capture value in the carbon credits market. Finally, in regards to government subsidies, unfortunately the Mexican government has been slow to react to the changing customer trends that I mentioned. That said, the company is an active proponent of shifting regulation to support a shift towards sustainability across all Mexican industries.

Thank you Sayiddah. As you well point out, once the company decided that its value proposition had to change, they were very decisive in implementing far-reaching changes across the organization in order to secure the alignment between its business and operating model. Given the size of the company relative to the country in which it operates, this was not an easy task. However, I think it provides us with an example of how this transition towards sustainability can reap many benefits.

On December 14, 2015, SVelasco commented on The Force is with Mickey Mouse :


Thanks for an interesting analysis of the integration of Star Wars to the world of Mickey Mouse. I, like you, am a long-time fan of Star Wars and I’m extremely excited about the Force Awakens (combined among the various types, I have probably seen the trailers close to 200 times!). However, differently from many Star Wars fans, I was never concerned about this acquisition. Disney had proven, with ample credibility, that it could acquire a well-esteemed IP of characters and stories (like Marvel) and deliver high-quality content offered across a myriad of platforms for fans to enjoy. Having watched the Force Awakens trailers, listened to the comments of Bob Iger / Kathleen Kennedy / JJ Abrams about the importance of the franchise, and observed the many different ways in which Star Wars stories will be delivered by Disney (as you well point out), leaves me at ease that the future of the saga will be in good hands.

My question to you is, what do you think has been different about Disney’s business model that has allowed it to understand exactly what customers need and when / how they want it despite not having a track record in a given area (ie Marvel, Star Wars, ESPN)? Would you agree that it seems that Disney has understood the high-demanding Star Wars fans even better than George Lucas ever did after Episode 6?

On December 14, 2015, SVelasco commented on Tesla – Winner winner chicken dinner :


Thanks for such an interesting analysis on Tesla. I am a big fan of what the company has done and the way in which Musk has aligned Tesla’s value proposition with its operating model (as you well point out).

My main area of concern is that the company might not be able to modify its complex operating system enough in order to offer the Model 3 at sustainable prices for mass consumers. I know that you mentioned that Tesla will reduce operating costs by building the new Giga-factory and presumably will be able to transfer some of the savings to its new consumers (via lower Model 3 prices). However, do you think this will suffice? What other initiatives is Tesla introducing to its manufacturing processes or raw materials in order to offer lower price points to its customers?

On December 14, 2015, SVelasco commented on Emirates Airlines: the International carrier :


Thanks for a well-developed review of Emirates’ operating and business models. Emirates has long been an interest of mine, as I am impressed by the rapid growth they achieved on a global scale based on a combination of very high quality and exceptional customer service. I am actually going to fly in Emirates for the first time in January, and I am excited to experience this airline first-hand.

What struck me the most from your article was to learn how Emirates has been able to offer their premium services at an achievable cost. Going forward, how likely is it that Emirates will be able to sustain this offer, as they continue to expand their fleet? In my view, there is some potential pressure coming from the required investments on the capacity side of its operating model (~170 new airplanes before 2020). Do they have sufficient cash resources to fund this expansion, without reducing the value proposition they currently offer to their customers?