GabyR's Profile

Nicolas,
Yes, I agree that probably the investments in intangible things must be higher overall than with the usual Walmart model since they need to develop three training programs, etc. As you mentioned, this investments are different per type of store which also allow for more differentiation.
As you mentioned, consolidating this demand is also a great advantage to lower the overall cost of products.

Sinem,
Actually the local consumers have recently developed premium stores too. The two biggest competitors of Walmart launched there versions in the last 5 years, this has made the fight for the higher income consumers more competitive.
Regarding the Local Pride program I believe that although it does decrease some of the economies of scale it has a lot of advantages that outweigh this because they can shorten the lead time and get better quality products.

I think this post is really interesting. I believe Tinder, as Facebook, generates a lot of value from its current users which are their biggest assets. I am sure no one would like to pay the subscription model if there was no potential to meet a real “match” at Tinder. This potential comes from the current 250M active users who appear to be “real human beings” based on the verification of their Facebook. As you mentioned, this verification generates trust and associates Tinder with a recognized brand name.

I believe that the most important part of the operating model you mentioned is the fact that Tinder is a customer centric company and adapts to the need of the consumer to generate value. This flexibility and focus on innovation is critical to ensure they stay relevant in the fast paced app market.

@Janiki: I also believe one advantage of having centralized production instead of regional factories comes from the number of pieces produced by SKU. Since they change their designs quite often (fast turnaround of SKUS) I imagine that it would be difficult to plan their production and account for downtime from setup time in all their plants if they were not centralized. They have probably compared the cost of more factories with the cost of sending product by plane and found the latter one to be cheaper and more convenient because it also helps in reducing the lead time as Nicolas mentioned.

I found this post really interesting. I agree with you that being vertically integrated allows Inditex to manage every step of the production process faster to reduce lead times and serve their “fast fashion” value proposition. It was impressive to see how they share information directly between the different elements of their supply chain. The fact that each store, based on the knowledge of their customer base, can directly order product to the distribution center avoiding central planning organizations can probably help them reduce the bullwhip effect.

Another interesting point I found in your post is the scarcity of inventories you mentioned. Inditex is one of the few companies I know (not luxury) that loves to have under-supply of the inventories of certain products in the store. This scarcity, coupled with the fast turnaround of SKUs in the stores makes you want to buy the product when you visit the store instead of waiting for another visit because it might not be there anymore. This in turn, allows the stores to gather data quickly regarding the adoption and success of the product to inform the production process.

Sinem, it was very interesting to learn how a big CPG company has transformed itself to become a company known for its sustainability efforts. It also really compelling how this social mission is integrated into their brands and different lines of business instead of being seen as separate initiatives from the corporate social responsibility with no relation to the business.

You mentioned the reduction of brands has helped Unilever become more efficient and led to the reduction of costs but I wonder if this initiative also helped by reducing the complexity and variability in production, distribution and planning. I assume that by consolidating their brands and products it makes it simpler for the company to plan production and distribution which can lead to better service to the customers by ensuring the inventory they need is always on the shelf.

Also, the “sustainable sourcing” sounds like a great initiative to promote sustainability in the broader ecosystem and to become agents of change. I would be interested to learn what kind of formal procedures or processes they have designed to ensure all their suppliers meet their sustainability requirements and if the global vision is preferred here to the local vision as it is in marketing.