The expectations for operating margins for intel seem to be based on historical operating margins and the assumption that their patents are still valid and useful in the sub nanometer and AI era. Could you elaborate on the other side of this story, i.e. what happens when the dust settles and they are not able to reach those operating margins? I ask because they are unique in being an integrated manufacturer of chips.
The reason Starbucks is losing is that they lost their way. It has never sold good coffee, the value offer has always been the experience.
Experience is just not there anymore. I will observe whether Niccol can turn this around, but I will be cautious until I see signs that the experience is getting noticebly better.
There are simply too many entrenched interests in any company that has been around for a long time and faces obvious decline for management to preside over an orderly process involving acceptance of decline. With the executives earning great pay packages, the consultants ever ready with glittering turn around plans, and board members who own little stock and rely on their $250-500K/year sinecures, the agency problems in companies with diffused shareholder bases seem intractable to me. So value will continue to be destroyed in most declining businesses.
I'd agree about Walgreens. Failed to make a go of it as a PBM. Failing to create synergy as prescriber (Village MD) and script fulfiller.
Strike 3 was Bringing back liquor sales (at least in its home state) - an act of desperation (mirroring its initial growth phase during Prohibition as a dispenser of "medicinal" liquor).
I once had a Walgreen exec tell me: dealing drugs on a street corner is profitable whether the dealing is done inside or outside. At that time (2010 ish) Walgreens was operating on street corners within 5 miles of >90% of the US population.
Profitability of dealing on street corners may remain true - but dealing drugs straight to a home probably has better margin and drives even more virtual foot traffic.
The expectations for operating margins for intel seem to be based on historical operating margins and the assumption that their patents are still valid and useful in the sub nanometer and AI era. Could you elaborate on the other side of this story, i.e. what happens when the dust settles and they are not able to reach those operating margins? I ask because they are unique in being an integrated manufacturer of chips.
The reason Starbucks is losing is that they lost their way. It has never sold good coffee, the value offer has always been the experience.
Experience is just not there anymore. I will observe whether Niccol can turn this around, but I will be cautious until I see signs that the experience is getting noticebly better.
thank you!
There are simply too many entrenched interests in any company that has been around for a long time and faces obvious decline for management to preside over an orderly process involving acceptance of decline. With the executives earning great pay packages, the consultants ever ready with glittering turn around plans, and board members who own little stock and rely on their $250-500K/year sinecures, the agency problems in companies with diffused shareholder bases seem intractable to me. So value will continue to be destroyed in most declining businesses.
I'd agree about Walgreens. Failed to make a go of it as a PBM. Failing to create synergy as prescriber (Village MD) and script fulfiller.
Strike 3 was Bringing back liquor sales (at least in its home state) - an act of desperation (mirroring its initial growth phase during Prohibition as a dispenser of "medicinal" liquor).
I once had a Walgreen exec tell me: dealing drugs on a street corner is profitable whether the dealing is done inside or outside. At that time (2010 ish) Walgreens was operating on street corners within 5 miles of >90% of the US population.
Profitability of dealing on street corners may remain true - but dealing drugs straight to a home probably has better margin and drives even more virtual foot traffic.