Institute for Business in the Global Context

Where the World of Business Meets the World

Month: July 2016

Unilever’s Big Strategic Bet on the Dollar Shave Club

[Unilever’s acquisition of Dollar Shave Club] is the fourth-most valuable M&A deal of a venture backed e-commerce company. And it’s a telling tale about whether the consumer products industry can get a digital business model right.

The deal is full of intriguing details. Unilever paid five times what Dollar Shave Club was expecting for revenues this year. Analysts had valued it for far less: in its most recent funding round — a $90.7 million Series D in November 2015  — Dollar Shave Club had been valued at $630 million, according to Pitchbook.  While Dollar Shave Club represents a growing share of the razorblades market, it is still tiny, it operates with low margins, is made up of an irreverent albeit engineering-savvy team – and is, as yet, unprofitable.

So why did a traditional consumer products company do a deal that feels more like it belongs in the tech sector than the consumer product industry?

Read the full piece from Dean Chakravorti in Harvard Business Review

Brexit: The return of boundaries

The Brexit vote may not be the last nail in globalisation’s coffin, but it has ensured that the pallbearers have been set on high alert. Meanwhile, across the Atlantic, a despondent America considers a vision of the country modelled on a gilt-edged and inaccessible penthouse apartment on New York’s Fifth Avenue. After all, the promise comes from the owner of such a penthouse; Donald Trump intends to impose punitive tariffs, deny entry to Muslims and others deemed undesirable, while dismantling trade deals and security alliances. What is more, his rhetoric has struck a chord in America and beyond. Nativists sentiments, growing inequalities and a sense of insecurity about the disappearing middle-class dream is a dangerous mix when there are politicians who — to use my favourite example of madly mixed metaphors — are prepared to lead their countries off the edge of a precipice with their heads in the sand.

Read the full op-ed from Dean Chakravorti in The Indian Express

Fletcher alumnus Justin Ettinger (MIB 13) joins Dean Stavridis to discuss his current role as a senior manager in corporate strategy at Under Armour, Inc., in addition to why he chose Fletcher, his capstone project for Converse and his move to the West Coast to work for Gap Inc.

India shining, but global glitter still hard to resist
by Namrata Singh

So, why still the foreign fascination [in India]? Bhaskar Chakravorti, senior associate dean, The Fletcher School, Tufts University, offers an explanation. One, there is an evident slowdown in economies across the world, including emerging markets. “Even economies such as India that are experiencing a rare burst of growth do not hold a promise that this growth is going to last and lead to exciting new jobs. The alternative is to look elsewhere beyond one’s home market with the hope that somehow the grass is going to be greener on the other side,” said Chakravorti.

Read the full piece, with quotes from Dean Chakravorti in The Times of India

Thiel Warms Up The Throng For Trump: When Silicon Valley Becomes Political

Silicon Valley, famously, is as much about that over-used notion of disruption as it is about over-stated claims to making the world a better place. Both goals have the power to stir up the millennial mind, which is good for recruiting. Both, however, also have strong political overtones: disruption pulls the rug out from under the powerful; as for making the world a better place…well, isn’t that what politicians are supposed to be doing when they aren’t politicking? No wonder, despite the commonly held belief that politics and technology are like oil and water, technology, without question, is increasingly tied to political expression. In the past, this expression used to occur in subtle ways. In the present political season, that subtlety has gone out of the window. Technology seems to have embraced politics like never before.

Read the full op-ed from Dean Chakravorti in Forbes

As the global economy slows, how can sustainable development remain a priority?

The summer is heating up with reminders that the first anniversary of the launch of the 2030 Agenda is not far – and when it comes to implementing sustainable development worldwide, time passes rather quickly. The high level political forum (HLPF) on Sustainable Development is convening in New York, the first since the adoption of the UN Sustainable Development Goals (SDGs). It comes hot on the heels of businesses being reminded by Secretary-General, Ban Ki-moon, at the UN Global Compact Leaders Summit in New York on June 22, who told those assembled that: “All businesses, everywhere, can and should play a role in improving our world.” He also added: “That starts with integrity – doing business right.”

Read the full op-ed from Dean Chakravorti in The Guardian

Fletcher Voices: On Brexit

With the United Kingdom greeting its referendum on the European Union with a resounding “Leave,” the sheer weight of the “Brexit” was felt at 10 Downing Street and on Wall Street, with shock waves quickly reverberating far beyond. From world markets to international security, geopolitics to national elections, uncertainty around the effects of the vote persist. Among many of the questions being asked there sits a single thread:

So what does this really mean?

At The Fletcher School, our faculty has grappled with its impact in a number of spheres. While the search for clarity goes on, looking at Brexit in the context of the world in which we live, and from a variety of viewpoints on campus, can hopefully shed a light on the referendum’s far-reaching implications.  Here’s what some of our faculty members – from those specializing in security studies to business innovation to international law – are saying about the current situation.

Faculty Voices

Dean James Stavridis

“The US must face the fact that the UK will likely be less of an effective and reliable partner in global affairs. The US-UK relationship is about to get somewhat less special, unfortunately.”

UK-US Special Relationship Shaky Following Brexit Vote, Financial Times

The United States and Europe will be confronted with a raft of bad news that goes along with [Brexit]: economic turmoil, a faltering British economy, a deeply weakened political entity in the European Union itself, the high chance of a Scottish departure from the UK, to name just a few of the challenges. The political and economic institutions of the West all seem worse off […].

The sole exception might be the military. Brexit, counter-intuitive as it might sound, will likely produce a stronger NATO.

Europe’s Loss Is NATO’s Gain, Foreign Policy
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Investing in The Sustainable Development Goals In A Time of Anti-Globalization And Economic Slowdown

No doubt, the global economy is going through a period of several overlapping challenges. In some parts of the world, such as sub-Saharan Africa, these may seem like the worst of times – at least in the last 17 years. However, with far-sighted leadership and some imagination, the worst of times may well turn out to be the best of times.

Read the full op-ed from Dean Chakravorti in Forbes

Brexit Could Deepen Europe’s Digital Recession

Brexit, as the British referendum to exit the EU is widely called, has caused turmoil in politics and stocks and head-shaking among the UK’s partners. All of this, of course, comes on the heels of many overlapping crises afflicting Europe.

In addition to the ones regularly in the news, I have argued earlier in HBR that there is a fundamental crisis unfolding over the longer term: the continent is suffering from a “digital recession” – a loss of momentum in their evolution toward a digital economy. Of the 50 countries we studied using a Digital Evolution Index we created, 15 European countries have been losing digital momentum since 2008 and EU countries occupy the bottom 9 spots in our ranking of digital momentum .

With the UK at 34 out of 50, it is worth asking: what is the impact of the Brexit referendum on this already dismal state of affairs?

Read the full op-ed from Dean Chakravorti in Harvard Business Review