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The hare and the tortoise: The race is not to Speedy (XXIII). How time affects growth, stability and retrenchment? Part B.

… “The tortoise meanwhile kept going slowly but steadily”…

The hare and the tortoise, a fable by Aesop

The month of July has arisen, and here we are expecting God´s grace for our endeavors and dreams. When we are in the middle of the year, we seem to arrive to the peak of our plans for 2021, in which we hurry up to accomplish our goals before Christmas. We have ascended to the apex of our first year of post pandemic season.

Before starting again, I advise to everyone who is already vaccinated, to don´t stop to use your protection masks.  My conservative approach to vaccines is telling me (subjectively) that even though the cases have diminished in several developed economies, it is wise for those who have been vaccinated, to continue wearing the mask, even if we don´t like them. It is wise to wait until the pharmaceutical companies can release a cure in the format of a capsule or tablet or pill or a syrup. If this latter format will take 6 months or a year to reach consumers, then it is better to keep our bio sanitary measures in place. I also believe that people below 18 years old or who are planning to have babies should wait for the tablet/capsule arrangement. In the meantime, we all need to continue behaving as if we are not vaccinated. It is cautiously prudent, given the different variants that are popping up. Specially if you will travel through airports or moving through several transport units with no ventilation. Merck, Roche and other pharma are racing slowly to make this happen.

Let´s continue with the continuum of what we started last Tuesday. We will provide 6 examples on how time affects growth, stability and retrenchment. Next week we will cover how time affects portfolio priorities, and how time affects corporate parenting. So, let´s go for it.

EXAMPLE FIVE. Cryptos.  For growing internationally in other countries, the cryptocurrencies, including Bitcoin, have been exploring different options in relation to how to be accepted as an intangible volatile asset. When PayPal announced last year that its corporation was going to begin to accept cryptocurrencies, that was a pure corporate strategy decision making. In terms of growth, the company is looking to expand its payment options to provide access to crypto users. It is a vertical integration decision, that pretends to be more efficient in terms of transaction cost economics. In addition, it is a geographic expansion choice. We are facing basically a strategic alliance with a flair of joint venture. The announcement of PayPal was the turning point for bitcoin to go up in price in October last year. This event showed how Pay Pal supported directly the cryptocurrency market in the USA, and it has allowed to its 26 Paypal million businesses the option to buy, hold and sell with cryptocurrencies. Who has benefited from this decision? Paypal or the companies´ currencies that were chosen by Paypal as payment options: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash?. An interesting fact to share is that Paypal joined the crypto craze last year, shortly after “Square, Inc. (NYSE: SQ) announced its purchase of approximately 4,709 bitcoins”. Square has been extremely successful with Cash App application since 2018. We wonder, was Paypal move a response to a Square move? Or is it simply another speculation game that will benefit the same big wild crypto holders who are behind the payment platforms? Or is it a question of individual miners who are trying to grab some cash out of these transactions? What is going on here? Where is the notion of time in this decision making? Is this corporate strategy decision made out of love for people, for PayPal users? Watch the video from November 2020 about this situation.

EXAMPLE SIX. Wearables for payments.
Timex Group has officially launched a range of watches and watch straps that let the wearer make tokenized payments at any merchant equipped to accept Visa contactless payments. “Owners use a Timex Pay branded mobile app and a Timex Pay clip, both developed by Tappy Technologies, to add a tokenized version of an existing payment card to their new watch or strap”. Tappy Technologies and Timex group are showing us a vertical integration again. The expansion of your wearable watch into contactless payment systems. Is this corporate strategy decision making made out of love for people? Or is it simply a way in which watches can compete with Smartphones (watches have disappeared as a “must” wearable because the Smartphones substituted them during the last 12 years as a storm). Again, where is the notion of time with respect for the new generations in this decision?

EXAMPLE SEVEN.  Logistics for COVID19 Vaccines.
One thing is to manufacture the Vaccines, another one is the safe delivery step by step process to the populations. These vaccines require a cold chain of logistics steps. UNICEF has provided not just advisory but it has helped governments in developing countries in the awareness of this topic. There is not successful vaccine, without an installation of cold rooms, refrigerators and freezers in vaccine storage facilities at the central, provincial, district and local levels. At the same time, in order to provide the vaccines to the villages, it is imperative the refrigerated containers for transportation, as well as supply of cold boxes and carriers must be available to safeguard vaccines during the final leg of their journey to immunization sites. The corporate strategy decision to vaccinate can´t be separated of the cold safety transportation chain.

How can the United Nations/governments offer an opportunity for vertical forward integration with the cold-chain suppliers that help our vaccines to arrive safely to the people? The vaccines must arrive tied to the cold chain equipment and logistics supply. A strategic alliance between vaccine manufacturers and logistics cold chain suppliers is required. In the case where an appropriate cold chain logistics is not available, is preferable to go for the classic viral inactivated or attenuated type of vaccines, instead of the mRNA vaccines.  Is this decision made out of love? Of course it is.

EXAMPLE EIGHT. Non-Alcohol Beers.
At the moment, the non-alcoholic beers represent only the 1% of the U.S. beer industry. And if that is the case in the north American market, don´t expect it to be better in other countries. Nevertheless, giant companies as ABInBev have opened the eyes to the possibilities to ignite a change into the beer preferences, particularly in the youngsters, who are reluctant to drink as their parents. The non-alcoholic beer market can grow, by double digits in the very next few years, particularly to comply with recent trends of caring for your organism in terms of health and wellness. For the time being, and after the pandemic, the company ABInBev wants to grow to at least 20% of its global beer volume to be “no – or low-alcohol” by 2025. Is this a turnaround strategy (after the pandemic) the best way to go? These are good news for my ears, in order to avoid the intoxication of people from their excessive alcoholic preferences! Do you know that just in the USA (data from year 2019), daily, about 28 people die in drunk-driving crashes — that’s one person every 52 minutes?. If the beer industry decides to market the non-alcohol beers, that would be a helpful contribution for societies. “Non-alcoholic beer contains phenols which are immune-boosting chemicals originating from the plants beer is brewed with. Phenol-rich diets, Appalachian State University’s David Nieman explains “tend to lower inflammation and have a very unique molecular structure that can actually regulate the genes that control inflammation.” Is this corporate strategy decision made out of love? Of course it is A THUMBS UP strategy for the non-alcohol beer industry of the future!

Picture source:

EXAMPLE NINE. E-books vs Printed books.
According to Felix Richter from Statista, “with smartphones, tablets and e-readers reaching mass adoption over the past few years, many predicted that printed books would soon become a thing of the past”. Nevertheless and despite that the big publishing entities as McGraw Hill, Pearson, Thompson Reuters, Penguin Random House, etc. have pushed the key for the e-books, consumers are getting more conscious about the importance of keeping printed books for learning and for leisure. “And while it’s true that people use their electronic devices to read, they still rely heavily on ink and paper when it comes to reading books”. This is an example in which the mindful awareness of consumers (particularly the Generation Z) have comprehended the importance of printed books. And their preference is guiding the publishers to stop the e-books business units to grow. Eleonora Escalante Strategy foresees the e-books sub-sector to shrink, probably following a captive company strategy under the retrenchment component of corporate strategies decision making.

Customers have always the last word. Once the publishing companies stop to offer the e-book alternative as the cheapest choice, we will have a much healthy society. It is in the hands of the people to guide the publishing companies according to our well ground preferences, and don´t leave the e-book to destroy our eyes and our brains. Even in poor countries, books are simply still treasured by kids; it is worthwhile for publishers to follow a retrenchment path with e-books there, so our developing economies can continue appreciating the printed reading choices.  Is this retrenchment a decision out of love? Yes, indeed it is.

EXAMPLE TEN. Cannabis.
Personally, I believe that the Cannabis should have never been approved for recreational purposes. I am sure there is enough evidence of the cannabis properties for medical uses, but one thing is to use it for curing a disease or pain; and another one for recreation, particularly for the youngsters market.  At the moment in the USA, the situational map is as follows.

And the cannabis usage is not for medical reasons but for recreation. The reality is:

  • 12% of Americans are active marijuana users.
  • Nationwide cannabis sales increased 67% in 2020 (the pandemic raised recreational marijuana consumption, particularly in the young adults sector, those who are between 18 to 25 years old)
  • The U.S. cannabis industry is worth $61 billion.
  • The state of California is leading the consumption of cannabis, and the future of it.
  • One ounce of cannabis costs around 600 dollars.

Is it love that ignited the approval of the cannabis, or is it simply another corporate decision making that has opened profits for those who lead managing the market, and the cascade effect for all the participants who are not asking themselves if they are causing more harm when the product is for recreational purposes? What about considering a retrenchment strategy to guide the consumption only for medical reasons, but not for triggering the new recreational addicts of the next century. What do you think?

I will remain until here for today. Next week, we will continue racing. We are expecting to finish this saga by July 23rd. A new one is coming soon, and it will be about porfolio analysis theory.

Have a nice weekend.

References used today for the examples provided:

Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. Nevertheless, the majority of the pictures, images, or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.

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