fdelabalze

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Interesting article which begs the question: why do companies really drive environmental changes in their operations? Is it because the savings in water are meaningful to profitability? Is it because consumers care and demand such change? Is it because governments force them to? It’s not clear to me why Glenmorangie is doing it. It could be that Glenmorangie is looking for a way to hedge against the increases in water prices that could impact profitability in the future. In that case, their decision not to share best practices with their competitors make sense: why try something new (which could fail) if your competitors can try it and give you the lessons?

This is a real long-term concern for Facebook not just in Russia but in other countries around the world. I wonder to what extent (and for how long) these decisions will remain in Facebook’s court: many of these questions have clear geopolitical implications and governments are bound to step in. There’s scope, for example, for the creation of an international framework on what is acceptable data protectionism and what is not, possibly through the WTO. Unfortunately, this may take some time… so Facebook should work to lobby to make it a reality as soon as possible.

Given current rules (or lack thereof) on data protectionism, I would still advice Facebook, as you say, to move to Russia. Such a move, fits with Facebook’s mission of connecting the world (to the best of its ability) and it secures Facebook’s competitive position as the social network of choice. Leaving Russia would give space to other players to gain critical mass that will be very hard to displace in the future. After all, a social network is technically quite easy to replicate, the network is not.

On December 1, 2017, fdelabalze commented on A Whole New World: The Digital Evolution of Disney :

“Giving up is for rookies”
– Philoctetes, Hercules (Disney movie)

I really enjoyed this piece. I think that from a strategic POV Disney should obviously aim to own the distribution of its content for three reasons:
1 – The value of data aggregation and analytics will only improve with time and whoever owns customer data will be able to make better content in the future. Leaving that data in the hands of others (e.g., Netflix) will only lead to
2 – Importance of owning relationship with new generation of consumers. What makes Disney such a powerful brand for our generation is that we grew up on those shows/movies. The Lion King, Hercules, and so on were part of the childhoods of hundred of millions around the world. Having your own platform will allow you to better direct and create that relationship with consumers.
3 – Disney’s IP is so strong that it can probably pull it off. I see the argument for a lot of studios not to get their own platform because their content is not wide or deep enough. Disney could create a streaming service targeted at kids and has more than enough amazing content to make it work.

On November 30, 2017, fdelabalze commented on American Eagle Outfitters flying high on digitization :

I really enjoyed reading this. It shows very clearly how an old-school retail brand is making big moves to combine the brick & mortar and online presences to stay relevant. You asked whether AEO could surge ahead based on its supply chain tech, and essentially use that as a source of competitive advantage. I think it definitely can better serve its customers through its supply chain , and should work to achieve that. My concern here is that what is leading edge today may be ‘old-school’ tomorrow and I’m worried about AEO’s capacity for continuous innovation. That will determine whether AEO’s supply chain becomes a lasting advantage. How is AEO attracting and empowering the talent needed to drive innovation moving forward? How effectively are new ideas being tested? AEO may need to channel its inner Amazon and invest in long-term capabilities.

Another sidenote on talent: I wonder how the increase in automation actually leads to increases in demand for skilled (and highly scarce) technical specialist to fix/maintain the hardware. It seems to me that retaining and attracting skilled technical talent could be a major issue in the future as competitors catch up and automate their supply chains.

On November 30, 2017, fdelabalze commented on How climate change could make your favorite beer less refreshing :

The water shortage is probably one of the most scary environmental trends we face, and one I feel doesn’t get as much attention.

The one thing that’s not clear to me is if the price of water is such a large component of the price of beer (e.g., what percentage of cogs is water related costs?). If it’s small, even if water costs double, the end impact on price may be small. Assuming it’s a large effect, I think you rightly point out that the BA is in a great position to spread best practices. Do you think, however, they’re going to be able to execute that? Seems like a lot of work to provide those advisory services and there may be volume advantages that are unavailable to small players even with best practices. It therefore seems that the lack of water (and proper, effective water management) may become a powerful moat for big players (e.g., Anheuser) to undercut smaller competitors. It seems quite possible that we may see a long term decline in # of small brewers. If this happens, the consequences for the beer market are sobering…

On November 30, 2017, fdelabalze commented on Lotte at the Whim and Mercy of Chinese Nationalism :

V. interesting article. In my view, Lotte’s long-term position likely requires that it mends its relationship with the Chinese consumer and enters that market. However, that doesn’t mean it needs to achieve that today and it probably makes most sense for Lotte to continue to grow through other markets and bid its time for a new entry into Chinese market (e.g., future acquisition).

One way to look at my strategy is by taking a line from the famous Chinese strategist, Sun Tzu in ‘The art of war’,: “If your enemy is secure at all points, be prepared for him. If he is in superior strength, evade him. […] Pretend to be weak, that he may grow arrogant. […] Attack him where he is unprepared, appear where you are not expected.”