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Leg 6. From Hong Kong to Auckland (VI). Annex: Cost Drivers

Good night to all of you. I hope you are doing well. After Valentine´s day, let me share with you the annex about Cost Drivers.

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If you wish to download the slides in PDF Format, click here: Eliescalante Leg 6 The Value Chain Analysis ANNEX Cost Drivers 14022018

Moreover, I would like to share an interesting video about MAPFRE and Dongfeng teams. As you may notice, these two teams were training together before the Volvo Ocean Race 2017-2018 started.  We don´t know if any of those two teams will finally win the total race, but if that happens,  we must acknowledge, they trained a lot before the race, and the skippers have learned to sail smart given their years of experience. Right now, it is still too soon to tell. At the moment of this post, Akzo Nobel and Team Brunel (the Dutch teams) are leading their way to Auckland. But in sailing,  things change from one day to the next one. And let´s see what will happen. I wish very much to explain to you how each of the teams has been training. I know all of them have been doing it for years… And they also have learned from their mistakes.

Let´s pass to our Strategy Race. I would like to use the Cost Driver “Learning” to illustrate the cost advantage in the Value Chain Cost Analysis. Why? Well because this is basically what makes the difference between one successful company and another one. Good learning is what makes the difference between one successful country and others. When people learn to do the things efficiently and excellent, success happens. And learning happens step by step.  Value happens when we learn. Learning is an accumulation of small learning improvements. It is not automatic. Chinese people understood this a long time ago. If they wanted to be a successful country, they knew they have to invest in higher-education (inside their land) and for specific and specialized areas, they had to study outside. With the best in the world.  In addition, they have invested in local universities, and many top schools have some sort of local sister university in China.  studentsstuding inchineAccording to the Wall Street Journal, each year the number of Chinese Students enrolled in the U.S. has been growing. For the year 2015/2016, approximately 330,000 Chinese students were enrolled in Universities in the United States. After reading this, please don´t ask me why China is raising their capabilities in innovation and technology so quickly. I read today at the Economist, that “In the area of e-commerce and the internet, Chinese firms are collectively 53% as big as America´s, measured by market value. China´s Unicorns, a proxy for the next generation of giants, are in total worth 69% of America´s and its level of Venture Capital Activity is 85% as big as America´s based on money spent since 2016. There is now a rich ecosystem of Venture Capital firms buttressed by Alibaba and Tencent, who seed roughly a quarter of VC deals, and by government-backed funds of funds”.  This is an example of how one nation, decided to invest in education in their people in order to do the things right, learn to invest in innovation, and create a VC (Venture Capital) industry in technology with better or equal standards than Silicon Valley, California.

Ok, this is all for today, tomorrow we will continue sailing step by step. Alejandro Guillermo Lozano Artolachipi, my best for your team too!. I am with your sailing team. Don´t forget it.

Blessings, and bonne nuit to all. Thank you.


21:36 pm – San Salvador.

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Disclaimer: All the content and presentation slides shown on this blog are prepared by me. Nevertheless, the pictures or videos shown on this blog are not mine. I do not own any of the lovely photos posted unless otherwise stated.

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