Lynn thanks for such a fantastic read! I had no idea these bands even existed and it seems like Disney has done a fantastic job of leveraging tech to improve operations, smoothen demand, gather data and build customer loyalty. I would however like to learn a little more about the economics of this band. I think I get why Disney opted for the band versus just a cellphone app. It ensures that each customer is one separate unit and can be tracked and catered to in that manner. But this definitely comes with its own costs right? From what I understand each band has to be mailed to the customers a few weeks before they arrive and then using the band the park tries to customize their experiences as much as possible. I know that it’s probably too soon to tell but how do you think about the unit economics of one band as well as the overall ROI of designing and rolling out this strategy?
Thank you for the interesting post! One interesting way in which some brick-and-mortar retailers are approaching competition with the large e-commerce giants is through tie-ups. For example, UK retailer Argos has a “click-and-collect” tie up with ebay where customers can pick up their ebay purchases from the closest Argos store for a shorter delivery time. This not only helps Argos leverage its existing store network to get a piece of the ecommerce pie but also provides opportunities for cross-selling and increased traffic. Maybe this is an option that Target could explore? However, as HBS2018 above mentioned – Ultimately Target will just have to focus on providing a superior in-store experience to the customer and it looks like they are on the right track!
Thanks for the interesting article Vicente! On your “winner-take-all”” point I actually feel like brick-and-mortar banks expanding into mobile banking have a higher chance of success given that they are better capitalized with existing profitable business and will probably find it easier to weather the competitive battle between fin tech companies till a winner is declared. From a customer standpoint I would actually prefer to have one common app where I can access both my current banking activities as well as new value-add services such as Paypal, Venmo, etc. High regulatory barriers to entry for banking make a fin-tech approach for traditional, “brick-and-mortar” banks even more valuable.
Loved the article Yujie! It was extremely interesting to learn about OneDrive and its business model. One question I have is regarding ebook pricing for libraries. It seems that they are priced at a considerable markup to hardcovers. However if a consumer were to purchase an ebook it would actually come at a significant discount to the hardcover version of a book. This fundamentally changes the economics of the trade-off between buying and borrowing and I wonder if this pricing policy for e-books (for libraries) is sustainable in the long term?
Thanks for this interesting post David! M-pesa has been instrumental in increasing financial inclusion in a number of developing nations. One additional benefit that M-pesa provides is an efficient and safe means of distribution for government assistance schemes and employment plans. This has been a big part of their value proposition in India. Traditionally, there have been significant leakages in the distribution of government welfare schemes either due to the “commissions” charged by middle-men or delays arising out of red-tapism. M-pesa attempts to solve a lot of these issues. Despite this, M-pesa has not seen as much success in India as expected. A large part of this is due to lack of awareness and an unwillingness to transact online. One of the key reasons M-pesa was successful in Kenya was that because of the high crime-rate people felt safer transacting online than they did carrying around cash. In India however cash is still a preferred means of payment and people seem to distrust online banking. Vodafone is focused on awareness-building programs, particularly in rural India to help drive adoption.
Rohit – Thanks for the interesting read! While, I was aware of the size and scale of the conglomerate, understanding the linkages between ITC’s various units has been fascinating. I echo Saurav’s opinion that as rainfall gets more erratic and soil quality continues to deteriorate, ITC will need to get more directly involved with the farmers, not only as a social responsibility but in order to protect their own supply chain. From what I understand, tobacco is ITC’s largest and most profitable business by far and I would love to know more about how climate change has impacted their raw material sourcing. An interesting mutually beneficial solution for ITC and the tobacco growers could be drawing on Hershey’s example of not only providing farmers with the education to improve productivity and withstand climatic variations but also promising to buy their produce at a premium. It will be very interesting to watch how ITC leverages global learnings to help combat the climate change threat from both a business and social standpoint.
Jenna – thanks for sparking off this interesting debate on the feasibility of sustainable initiatives in the fast fashion industry. I agree with both Jessie and Nancy that there is a fundamental friction between sustainability and the very value proposition of fast fashion. The ideal solution in the long term would be a switch in consumer preferences towards longer-lasting, higher frequency-of-use apparel, which would address this issue at its root.
Having said that, I still believe that there is a lot that fast-fashion retailers can do to make their value chain more aligned with long-term environmental sustainability. When we talk about reducing production or eliminating waste at the beginning of the production cycle it is not only limited to reducing the number and frequency of SKUs produced (which is integral to the customer value proposition). H&M’s use of organic cotton is an example of improving sustainability at the earlier stages off the supply chain. Inditex (Zara) also recently launched a campaign called “Join Life” which includes products exclusively manufactured from organic cotton, recycled wool and Tencel (a wood cellulose sourced from certified socially and environmentally responsible forests). An interesting point in the above post is that 90% of H&M’s climate change impact is attributable to its partners. Inditex, in order to ensure greater control over its production eco-system, only sources those products for its “Join Life” campaign which have been manufactured using Inditex’s “Green to Wear” technologies (Eg: Water recycling) and in factories with a Grade A or B in environmental sustainability. Moreover, they have doubled down on creating “eco-efficient” stores which focus on reducing electricity consumption and reusing packaging supplies. While I agree that there is a need for the fast-fashion model to evolve to match sustainability targets, there is still plenty that players can do within the constraints of the current business model.
Amrita – Thanks so much for this fascinating post! Its so heartening to see that Disney is leveraging its brand equity to disseminate this powerful message. Using its various platforms to educate the new generation about climate change and its impact is one of the most valuable contributions that Disney can make.
Its also interesting to see the unusual places where sustainability measures can be undertaken and see a huge impact. Six Flags implemented a similar go-green strategy across its theme park locations. Initiatives included replacing all its plastic trash bags with biodegradable ones and using exclusively LED lighting to conserve energy. Washuzen Highland Park in Japan went a step further and actually built a foot-pedal powered roller coaster. Creative solutions like these just show how despite changing times the magic can be still be kept alive!
Ali – This post really brings out one of the key issues that emerging markets and the companies involved with them are facing. One of the primary causes of water shortage in emerging markets is the rapidly depleting water table and the high dependence of the economy on ground water. In India for example, 60% of irrigated agriculture ad 85% of drinking water is dependent on groundwater. One approach to water conservation that Air Products & Chemicals could potentially adopt is partnering with or funding local communities to aid in their conservation efforts. In the state of Andhra Pradesh in India, for example, a community-based farm-pond, water- harvesting model has proved immensely successfully where at the cost of ~$ 2,200 per village per year farmers have succeeded in doubling their incomes and restoring groundwater to sustainable levels. As natural resource scarcity becomes more acute, it calls for more creative partnerships between local communities and large industrial players to alleviate the shortage.
Jessie – thanks a lot for your interesting post! Funnily enough, my sister turned vegetarian for exactly the same reason and I think the discussion on vegetarianism as a key to slowing down climate change is an extremely pertinent one to have.
A recent report by the World Resources Institute suggests that the average American could cut their food’s environmental footprint in half just by reducing their consumption of meat and dairy. Which is why, while JBS’ efforts to make its traditional supply chain more environmentally sustainable are admirable, I have to echo Eric’s opinion above that they need to have a more pivotal shift in their strategy towards meat alternatives.
The crux of the problem lies in world population growth and growing incomes in emerging markets like India and China (where beef consumption is currently low). World population is expected to hit ~10 bn by 2050 of which a third will join the middle class, which tends to consume more calories as income increases. The problems posed by beef are further compounded by how inefficiently it caters to consumption. Studies indicate that only 1% of cattle feed is converted to calories that human consume (v/s ~11% conversion for poultry). I think it is imperative for consumers to start evaluating the ramifications of their consumption patterns and for companies like JBS to be prepared for this shift in consumer consciousness.