The chips themselves are also key to higher profits. Hybrid and electric vehicles, which contain between $1,000 to $3,500 worth of semiconductors per vehicle, are surging in popularity, compared to an average of just $330 for conventional cars. If consumers buy fewer polluting cars and the cars are a better business, that could be a win-win.
3. Food: McDonaldâs takeout to a chefâs restaurant
The way I see it, we used to live in a McDonaldâs world. Thatâs not to say McDonaldâs is going away anytime soon. The golden arches, Big Macs, and fries can still be reliably found in over 100 countries. But I see the globalized model underpinning its success as coming under pressure. McDonaldâs standard menu and operations were optimized to suit global conditions as they were. With its value chain optimized, McDonaldâs growth was fueled by a steady stream of new openings to boost market share.
But with increased global uncertainty â including recent shortages of potatoes, labor (especially with COVID-19âs omicron surge), transportation, and energy â thereâs another model to look to: the chefâs model.
At the chefâs restaurant, customer preferences are, of course, still central, as they are at McDonaldâs. But so is market availability. Which foods are in season? Whatâs plentiful and popular? In the chefâs model, the restaurantâs volume canât approach McDonaldâs. But, again, profit margins per item sold can certainly be higher. And so can the chefâs sustainability profile.
At the end of the day, with increasing protectionism (in tax policies and trade barriers), shortages prompted by war and other causes, and overall uncertainty due to climate concerns and other factors, companies are finding that âlocal for local,â regionalization, insourcing, friend-shoring or just plain simplification hold growing appeal. Many of the existing supply arrangements will take some years to unwind. As such, this is a change that is happening slowly for some, at the same time its logic has shifted relatively swiftly.