Category: Strategy

  • Nike: Big shoes to fill

    It has been just over a year since Nike celebrated the  30th anniversary of its “Just Do It” campaign with a series of ads, featuring athletes including Colin Kaepernick, and triggered a controversy. I wrote then, about Nike’s “skin in the game” approach to brand messaging, and argued that it was perfectly placed to polarise and reap dividends in a world of attention-scarcity. But..

    Woke might make you broke!

    One year later, a (rightfully) sharp post on Pando alerted me to how the NBA got embroiled in the Hong Kong protests conversation, thanks to Daryl Morey, General Manager for the Houston Rockets tweeting his support. China vs NBA resulted. The NBA apologised. Nike pulled its Houston Rockets merchandise from five stores in Beijing and Shanghai (via). It didn’t stop there. LeBron James, refusing to be left out, waded in by stating that Morey was misinformed. Thanks to Nike’s $1 billion lifetime association with LeBron, that dragged the brand further into it. As per USA Today Nike’s business in China from June 1, 2018 to May 31, 2019 is upwards of $6 billion, and has doubled in the last 5 years, while remaining flat in the US. The stakes are high. (more…)

  • Efficiency, a zero sum game?

    In vs Amazon, I had cited Simon Andrews’ article – it might be “easy” to get about $50m, the journey to $100m and beyond gets tougher because efficiencies start maxing out. In this context, “efficiencies” relate to acquisition when building a DTC business. It led me to think of “maxing out efficiencies” in the broader context of the organisation and the business environment it operates in. (more…)

  • vs Amazon

    I had an interesting conversation with a start-up founder recently, one whose business had received multiple rounds of funding and is scaling well. Our chat soon moved into listing on Amazon/other horizontals, and I was reminded of my post from earlier this year – The Shrinking Shelf Life of Ecosystems. I had written how the advantages of dominating the triumvirate – distribution, product and brand – now have a shrinking shelf life.

    I had taken DTC brands as an example of this. But while that is relatively true and there are enough unicorns around, in absolute terms, the distribution might of Amazon and other horizontals continues to be formidable. In this insightful post – Bonsai Brands – Simon Andrews explains that while it might be “easy” to get about $50m, the journey to $100m and beyond gets tougher because efficiencies start maxing out. They could remain viable businesses at a certain scale. (more…)

  • The shrinking shelf life of ecosystems

    One of my favourite business frames in the recent past has been Jeremy Liew’s “When a consumer market is new, distribution wins. As consumers become educated, product wins. When products reach parity, brand wins.”

    Two events happened in the last fortnight that made me reflect more on this. The first was Apple’s power move on Facebook and Google. The second one was here in India – FDI regulations affecting Amazon and Flipkart. Both were shows of influence, and involved distribution.

    It made me realise that the shelf life of this entire distribution-product-brand cycle is shrinking. Disruption is happening far before organisations can take advantage of wins at a previous level. (more…)

  • Evolving against entropy

    ​In the last fortnight, I had two interactions with customer care teams. The first was Kotak, for a bank account. There were failures at multiple levels, but the biggest takeaway was how difficult it was to get through to a human. Chatbots have their uses but this was extreme! Twitter DMs weren’t a help either. The second was Amazon, and that surprisingly included being put on hold for about 15 minutes and transferred 5 times! Thankfully, the problem was resolved in 30. But given the famed Amazon customer-centricity, this was a disappointment, and I wondered if at scale, it was inevitable. 

    What causes it? The best frame I have seen is entropy. (via) Yes, that physics and thermodynamics thing – the degree of disorder/randomness in the system. Though the meaning remains the same, the application changes. In the context of a business, it is the tax applied by the system between input and output. Just imagine the effort that is required to get things done in a corporate structure as against a startup. While it is theoretically possible for a complex system to have lesser entropy than a simple system, I have not seen it in practice. I can imagine why it is so – the randomness that can be generated by different touchpoints, and their optimization for following rules as opposed to providing solutions. What happened to me with Kotak and Amazon were examples of that.   (more…)