McDonald’s has made a lot of changes over the course of the last couple years. Investors were skeptical at first, but the company’s CEO seems to have one its shareholders over. Now McDonald’s has a new plan to reverse its sliding grip on US fast food sales: take over the “dead zone”, or the period between lunch and dinner which are a doldrums for fast food chains. Between roughly 2 and 5 pm, fast food outlets do very little business. McDonald’s thinks there is an opportunity there, and counter to its recent focus on healthy food, it is rolling out the sweets and pastries to try to lure customers in during those hours. It will offer some new indulgent treats with aggressive pricing. It also says there is an opportunity to expand its coffee business.
FINSUM: We think this is a sharp idea. People seem to get an energy low in the middle of the afternoon, so peddling fresh coffee and sweets then seems like a solid strategy.
The market has had a lot of anticipation about the release and production schedule of Tesla’s new model 3. Many are worried that Elon Musk’s company will not be able to meet its production quotas, leaving the company unable to meet the huge volume of pre-orders it received for the new model. The company has just months remaining to deliver around half a billion Dollars worth of refundable orders. It plans to double its production rate within six months, and then quintuple it by the end of next year. The rollout will be slower than previously as the company wants to avoid the debacle it faced with the release of faulty Model X’s when they debuted.
FINSUM: This is a make or break challenge for the company and they have a poor track record of keeping to production schedules.
Nike has done a lot right as a company. Despite this, the Oregon-based sportswear maker has been maligned recently by the press and investors because it has seen weakening wholesale orders and has let its competition make headway. However, it now has a chance to reverse one of its big missteps of the last few years. One of the areas where Nike has been deficient is in latching on to the Millennial audience, and specifically the explosion of the “athleisure” trend that has gripped fashion the last couple of years. The new chance to rectify lays in the fact that Nike has just reversed course and decided to sell through both Amazon and Instagram, both channels popular with Millennials, according to Raymond James analyst Cedric Lecasble.
FINSUM: Nike can probably grab market share pretty quickly if its sets its mind to the space and utilizes both of these new distribution channels.
The demise of the internal combustion engine has been very slow. Though it has rapidly sped up lately alongside the likes of Tesla, its multi-century grip on the auto industry remains very strong. That said, Volvo made a groundbreaking announcement recently—that it would do away with making cars solely featuring gasoline engines. All Volvo cars from 2019 will feature an electric motor as the primary form of energy. The company will feature three types of cars: ‘pure-electric, plug-in hybrids, and so-called “mild” hybrids combining a small petrol engine with a large battery’.
FINSUM: Volvo is a major manufacturer so this is an industry-shifting announcement that no one else has been brave enough to make. The investor race to separate the electric car winners and losers is in full swing.
E*Trade is a veritable legend in the retail financial space. The country has been symbolic of retail stock trading since its emergence on the scene in the 1990s. It is famous for big retail marketing pushes, including well-loved TV advertising campaigns. However, its is currently struggling with its own identity, with the board giving the CEO an ultimatum: figure out the identity of the business or lose your job. The company has seen its revenue dwarfed by the likes of Charles Schwab and Ameritrade, leaving it a distant third. As a response, the company is pushing into its old ground, launching a huge TV campaign and trying to tap into customers’ aspirational goals, trying to create a link between stock investing through E-Trade and growing personal fortunes.
FINSUM: It seems like online brokerage overall may struggle with the growth of robo advisers and the overall industry move towards more fee-based and less transactional business. Then again, it could benefit because of a jump in revenue from those that still want to have commission-based trading.
One thing is obvious, one not at all. The obvious part is that Amazon CEO Jeff Bezos has a masterplan for his grocery store efforts. The less obvious part is what that plan is, which makes sense given the very competitive grocery landscape. Barron’s has published an article seeking to explain the acquisition of Whole Foods based on its own apparently extensive research. The result of the work—buying Whole Foods gives Amazon a physical location within one hour’s drive of over 70% of the US population. With its existing prowess in delivery and its growing efforts in on-demand instant delivery, the Whole Foods acquisition gives Amazon a network of fulfilment centers that can service the majority of the US population.
FINSUM: The acquisition is starting to make a lot of sense now, as it simultaneously allows Amazon an entrance into the grocery business, but also gives them fulfilment centers for their core retail business.