(#102) How to beat Amazon; on Huawei’s latest event
Lessons from Starbucks in China
Knowledge partner: ENGIE Romania
Instalarea panourilor fotovoltaice este o investiție responsabilă pe termen lung, prin reducerea emisiilor, și pe termen scurt, datorită scăderii costurilor cu energia electrică. În acest context, implementarea măsurilor de sănătate şi siguranță în muncă nu mai este un cost, ci o decizie strategică pentru viitorul companiei tale și bunăstarea angajaților.
De ce sunt măsurile de sănătate şi siguranță în muncă esențiale pentru afacerea ta?
1. Retenția personalului: Crearea unui mediu de lucru sigur creşte nivelul de încredere a angajaților, reducând fluctuația de personal.
2. Continuarea neîntreruptă a activității: Investigațiile declanșate de organele de control în urma unor incidente majore pot duce la oprirea temporară a producției sau a serviciilor.
3. Reducerea costurilor pe termen lung: Investițiile în măsuri de siguranță pot reduce semnificativ costurile cu despăgubirile acordate angajaților accidentați.
4. Protejarea imaginii și reputației: Un accident grav poate produce daune de imagine semnificative, generând o criză de imagine şi pierderea încrederii clienților.
ENGIE Romania a instalat până acum un număr de peste 115.000 de panouri fotovoltaice, cu zero accidente de muncă, fiind un partener de business responsabil, care pune în centrul tuturor proiectelor pe care le derulează preocuparea pentru securitatea și sănătatea în muncă.
Află aici mai multe detalii privind beneficiile atât pentru compania ta, cât și pentru angajați ale implementarii și respectării măsurilor de sănătate și siguranță în muncă.
Protejează-ți angajații și asigură un viitor sustenabil afacerii tale!
Lessons from Starbucks in China
I have often written about how brands deliver their products and services in China and how they are forced to adapt, especially to offer “more value for money” or give unheard discounts (e.g., BMW, Apple, etc). Here are two ideas from Starbucks in China:
1/ Starbucks' struggles in China show the critical importance of local adaptation in highly competitive and culturally distinct markets. Despite a strong presence, the company has been outperformed by domestic competitors like Luckin Coffee and Cotti, which have leveraged automation, cost-efficiency, and local consumer preferences to achieve remarkable growth. This highlights the need for global brands to align their offerings and operational strategies with the specific demands of local markets rather than relying solely on global brand recognition.
The success of Chinese coffee chains demonstrates the strategic value of innovation in operational efficiency and consumer-centric design. Starbucks can learn from these competitors by adopting advanced technologies like automation and exploring partnerships with local players to navigate market complexities. These actions are essential for multinational corporations aiming to maintain relevance and achieve sustainable growth in rapidly evolving, cost-sensitive industries. LINK
Competing with Amazon in the US: Temu
1/ The rise of "family warehouses" in the U.S., operated by Chinese immigrants, reflects a pragmatic adaptation to regulatory and logistical challenges in cross-border e-commerce. These small-scale operations, which offer flexibility and cost-efficiency, have become a crucial solution for Chinese sellers operating in the U.S. market amid crackdowns on low-value shipments. This model demonstrates how local individuals/entrepreneurs can fill gaps in the global supply chain, leveraging personal spaces to provide fulfillment services and reduce delivery times, despite their limitations in scalability.
2/ The shift from direct shipping to localized warehousing signals a broader trend in e-commerce logistics, driven by regulatory pressures and consumer demand for faster delivery. Temu usually delivers in the US in 10 to 20 days. While "family warehouses" address small sellers' immediate needs, successful businesses' growth trajectory ultimately requires transitioning to larger, professional setups. LINK
Swiggy beat Amazon to 13-Minute grocery deliveries in India
1/ Swiggy’s rapid rise in India’s competitive quick commerce market exemplifies the importance of innovation, agility, and an acute understanding of consumer behavior in high-growth economies. By leveraging hyper-localized dark stores and optimizing delivery through gig workers, Swiggy has reduced its average delivery time to 12.6 minutes (!), setting a benchmark for convenience in a price-sensitive yet time-conscious market. This strategy has enabled Swiggy to carve out a significant market share and appeal to investors, despite challenges such as operational losses, regulatory scrutiny, and labor concerns.
2/ The success of Swiggy’s expansion into quick commerce highlights the potential of rapid delivery services in emerging markets where consumer convenience is increasingly valued. However, sustaining growth will require addressing profitability, regulatory compliance, and worker welfare while staying ahead of deep-pocketed competitors like Amazon and Reliance. Swiggy’s experience shows that scaling in such markets demands not only capital but also continuous innovation in logistics and customer experience, making it a valuable case study for businesses operating in similar high-growth sectors. LINK
Nvidia earnings
1/ Nvidia's recent earnings and strategic focus illustrate the importance of managing supply constraints and leveraging market demand for innovation-driven growth. The company’s success is attributed to its leadership in AI chip development, particularly its Hopper and Blackwell architectures, which cater to the surging demand for AI workloads. Nvidia’s ability to consistently exceed revenue forecasts highlights its mastery of supply chain dynamics and its prioritization of high-value customers (3 to 5 big customers, depending on who’s counting), such as neocloud providers (CoreWeave) and hyperscalers (Microsoft, Google, etc), ensuring maximum strategic alignment and profitability.
2/ The discussion on scaling laws and the increasing demand for AI infrastructure reveals that Nvidia's growth trajectory is strongly linked to technological advancements and the evolution of AI applications. While the potential plateau in pre-training scalability poses challenges, emerging data sources like video content and innovations in inference scaling offer new opportunities. NVIDIA, Scaling Laws
There’s only one direction in Germany: going down
I have written extensively about what are Germany’s problems and what has to do. Here are two more ideas from The Economist through my filter:
1/ Germany’s long-standing export-driven economic model faces significant structural challenges and needs for a strategic pivot. High energy costs, aging infrastructure, and fierce global competition, particularly from China, have exposed the vulnerabilities of Germany’s manufacturing sector. This includes a reliance on incremental innovation and resistance to reform within its Mittelstand firms, as well as declining returns from traditional export markets. The country’s deindustrialization fears are compounded by geopolitical uncertainties such as potential US tariffs and the economic pressures of shifting supply chains, leaving Germany at a critical crossroads.
2/ To adapt to this new reality Germany must embrace structural reforms, including modernizing its fiscal policies and increasing investment in education and infrastructure. Proposals to reform the debt brake, which limits public spending, could unlock much-needed resources for innovation and long-term growth. Furthermore, Germany’s expertise in high-value green technologies presents an opportunity to redefine its industrial future. However, achieving these changes requires overcoming bureaucratic inertia and political polarization, which threaten to stall the necessary reforms. The upcoming elections will be pivotal in determining whether Germany can implement the transformative policies needed to sustain its economic resilience. LINK
On Huawei’s latest event
When it comes to Huawei there are two ideas: it’s the soul and body representation of the Chinese state and it has unlimited resources.
How many companies do you know that announces another big event after just 2.5 months? Here is what they released: cars, normal and foldable phones, watches, health tablets, home devices, and more. This was also an event where they announced their departure from Android.
More on the cars:
1/ Huawei and JAC's new automotive brand, Maextro, aims to disrupt the ultra-luxury sedan market with the launch of the Maextro S800. This model leverages Huawei's second-generation Tuling Intelligent Chassis and L3 intelligent driving architecture, reflecting a strategic move to compete with established luxury brands like Mercedes-Benz, BMW, and Audi. Positioned under Huawei's HIMA umbrella, Maextro is a testament to Huawei's ambition to integrate advanced technology into automotive design, signaling its shift from a technology provider to a direct competitor in the global luxury EV market.
2/ The S800's debut highlights the growing intersection of technology and automotive manufacturing, showcasing how collaboration between tech and traditional industries can redefine market expectations. By offering features that blend intelligence and luxury, Huawei demonstrates its capability to diversify into high-value sectors despite geopolitical and market pressures. However, the brand's ability to challenge legacy automakers will depend on its execution in scaling production, maintaining quality, and establishing a strong global distribution and service network. Bloomberg, Coverage
Thank you for being an onStrategy reader!
Interesting newsletters 💡
